Is Wal-Mart Really Turning Green?

I have watched the plentiful news coverage about Wal-Mart’s green turn and read many opinions both skeptical and convinced. Until now I have withheld judgment.

Talk, after all, (mine included) is cheap.

But it seems increasingly clear that Wal-Mart is not…as the doubters say… just ‘greenwashing’.

How did I come to this conclusion?

Well I read a number of feature stories in the American business press, for one. And one of the common threads is that Wal-Mart has discovered that by trimming packaging, excising unnecessary waste, and maximizing energy costs they are saving tens of millions every year.

Wal-Mart’s unique business proposition is that they are the low price leader and their margins are razor-thin. “A penny saved is a penny earned,” the saying goes. And that’s truer for Wal-Mart than, say, Rolls Royce.

To its bones, Wal-Mart is a cost-cutter.

But I also keep coming across marketing efforts... ironically enough... that evidence Wal-Mart is serious in its greening.

Above is a page from a flyer from the June-July 2007 Sam’s Club Source, their magazine for members. Sam's Club is a member's only warehouse club owned by Wal-Mart. All told 40 pages of editorial and ads… including the cover… had some sort of green or organic or social responsibility messaging.

Notice first of all the three column piece at the top of the page about Sam’s Club gift cards. The plastic cards, we learn, are made from corn sugars and thereby decompose (‘renew’ the copy says), in days rather than millions of years as with an oil-based plastic.

Two years ago the main consideration from Sam’s Club when it comes to sourcing stored-value cards would have been price alone.

Below that is an ad for coffee from Sam’s Club in-house premium brand Member’s Mark. The coffee is triple certified by the Rain Forest Alliance, USDA Organic and Fair Trade.

Two years ago, the coffee buyers at Sam’s Club wouldn’t have even deigned to open a phonebook to find the numbers for the USDA Organic certification authority, much less Fair Trade and the Rain Forest Alliance.

Likewise Sam’s Club and Wal-Mart have traditionally rejected standard-issue cause-related marketing campaigns because they undercut the company’s value proposition, which was encapsulated by their long-time tagline “always the lowest price.” [Wal-Mart’s tagline has since changed to: “Save money. Live Better.”]

After all, how could they be offering the lowest price if some charity got a nickel or two?

What does this mean?

Two things:

1. Wal-Mart is the world’s first or second largest company by sales depending on the year. In no small measure their size has painted them with an equally gigantic target. And competitors, governments, and social activists the world over take aim every day. With their green initiatives, they’re not going to please their fiercest critics. But if they can find money savings and sales advantages in turning green, your company can too.
2. For cause marketers it means that you may have an opening… most likely with Sam’s Club… that didn’t exist before. But the cause has to be just the right shade of green and the campaign better be very well thought out. Because every day a plane-load of people with new ideas arrives in Bentonville, Arkansas and most go home disappointed.

Mele Kalikimaka

Every Christmas for at least the last 10 years Late Night with David Letterman has featured the incomparable Darlene Love singing the rockingness Christmas Song ever, 'Christmas, Baby Please Come Home.'

That is until this year when the writer's strike has grounded new shows.

So here from the YouTube vault is Ms. Love's year 2000 performance with the Singing Sergeants of the United States Air Force.

The video quality is poor and the music and video are out of synch. But Darlene Love never disappoints.

Enjoy!

And Merry Christmas.

Word of Mouth Marketing Part II

As far as the marketing mainstream is concerned, the price for launching a new consumer brand in the United States starts around $100 million.

Speaking only for myself, that's a little out-of-reach.

But in his book Word of Mouth Marketing Andy Sernovitz says there's ways to build a respected brand for less.

In this post I discuss his five Ts of word of mouth marketing and the challenge of The Chocolate Problem.

Lastly, my apologies to Sernovitz and to you, because I misspelled his name in my initial posting. Rest assured that I have fired the idiot who made the mistake.

Sernovitz cites five Ts in word of mouth marketing:

1. Find people who will talk. Bear in mind that talkers may not be customers and that if you try and buy their participation, you’ll almost certainly undermine their credibility as talkers.
2. Give them a topic. And don’t make it in the marketing-speak of features and benefits. Nobody recites a brochure list of features and benefits when they pass on word of mouth.
3. Give them tools to help the message spread. Blogs, email, coupons, the ‘tell a friend’ option are all key tools.
4. Join the conversation… take part. If your company has stumbled, apologize. Repeat as necessary. Invite people back. Leave thoughtful notes on message boards and blogs. Etc.
5. The last T is track. As Sernovitz archly said, word of mouth is at least as trackable as all other kinds of marketing, which sometimes means not very trackable at all. But you can certainly use BlogPulse, Google, Technorati, Feedster and the like to get a read on your word of mouth marketing efforts.
   

Finally, word of mouth marketing faces what Sernovitz calls “The Chocolate Problem.” By which he means, no one ever called a friend and said, “Have you tried this thing called chocolate? It’s amazing!”

That secret’s pretty well out.

Likewise, no one emails a friend about getting a great room and attentive service at a Ritz Carleton Hotel. People expect that. It’s baked in.

How do you combat The Chocolate Problem? Well, you keep coming up with new things that people find remarkable. Google search was once remarkable, but no longer. Now, it’s a useful commodity. But Google Earth is still pretty remarkable. My father-in-law, well into his seventies, is entranced by it. Now there’s Google Traffic. And whatever else Google has in beta.

Now is Google Earth really useful? Let's be honest, it's more gee whiz cool than truly beneficial. But it certainly is remarkable in Sernovitz's formulation. To fight The Chocolate Problem, you must keep coming up with new remarkable things.

Word of Mouth Marketing Part I

re·mark·a·ble
adj
1. worthy of notice: worth noticing or commenting on
2. unusual: unusual or exceptional, and attracting attention because of this

The success of your next cause-related marketing campaign (and perhaps all your marketing efforts) may hang on this single adjective. That’s the word from Andy Sernovitz, author of the book Word of Mouth Marketing and founder of the Word of Mouth Marketing Association.

I caught Andy’s remarks at a speech he gave last night. What follows is the first part of my precis of his presentation. Part II follows on Thursday's post.

Word of mouth has been around forever and everyone knows how powerful it can be, for good and ill. But without an assist from the tenets of marketing, word of mouth by itself is like pasta without the sauce. That is, incomplete.

Propelling good word of mouth, Sernovitz says, has never been easier. Email and the social media amount to word of mouth particle accelerators, getting more from word of mouth than it could under its own power.

For instance, Sernovitz says, Gap sends out an occasional email to their staff that is passed off as a super-secret friends-only discount. The email says that the discount is only to be shared with one friend or family member. But Gap has something like 100,000 teenage employees, and their definition of sharing with one friend is different than mine. The result is that the discount code ends up on MySpace pages and in blogs and the like.

What are some other word of mouth campaigns that demonstrate the use of the remarkable?

• The stunning wrapping paper that online retailer Red Envelope wraps gifts in.


• The annual Thanksgiving release of gross-out flavors from Jones Soda, like turkey and gravy. You buy a case as a novelty, pass around small sips to your Thanksgiving guests, whereupon everyone turns up their nose. And next week, when you’re in the store, you buy one of Jones’s more appetizing flavors, like strawberry lime.


• Drury lnn, an otherwise indistinguishable $79 a night motel offers its guests one hour of free long distance for each night’s stay. You start calling people and in the conversation you tell them you’re calling because you got free long distance at the Drury Inn. Never mind that you’ve got free nights and weekends on your cell phone. In effect, Sernovitz says, you’re doing outbound telemarketing for Drury from your room!


• Sun Microsystems’ Project Blackbox, wherein Sun’s servers come in a jet black self-contained cargo container.


• Heinz’s Top This TV Challenge, which offers a $57,000 (get it?) first prize to people who make the best commercial for Heinz and post it on YouTube, launched with no more promotional support than on-package labeling and a single press release.


• The first computers from Apple after Steve Jobs had returned to lead the company… are you ready?... had color. Which is little different than subtly changing the hue of the color burst on the box of Tide detergent. And yet Apple began its resurgence with just that one
  seemingly insignificant action.

The genius of word of mouth marketing is that it’s relatively inexpensive. And if you can’t figure out something remarkable over a long weekend you’re either a dolt or you’re over-thinking it.

On Thursday: the five Ts of word of mouth marketing and The Chocolate Problem.

Charity Caveat Emptor

On Friday, a Federal judge in Minnesota sentenced Cameron Lewis, age 36, and his father Tyron Lewis, both of Monticello, Utah, to 17 and five years respectively for defrauding hundreds of school districts of nearly $40 million using a now-defunct charity called the National School Fitness Foundation (NSFF).

The fraud amounted to money laundering; a Ponzi scheme.

I know Cameron. Met him the first time over lunch at a Chinese restaurant along with several of his board members. I met with him subsequently several times. He has a certain charisma.

I mention this because a charity I once worked for came within a hair’s breadth of partnering with the NSFF.

That charity wasn’t defrauded by Lewis. But we did actually partner with Aaron Tonken, the Hollywood event planner and now convicted felon, who went to prison in 2003 for defrauding charities (as I recall) of $1.9 million. The charity I worked for lost $100,000 due to Tonken’s machinations, but later recovered the money in full.

I also met once with Tonken, who unlike Lewis had no discernable charisma and a very distinctive speech impediment.

What both men share in common is that they are accomplished fabulists. When Cameron explained how the NSFF was paying for the fitness equipment, it seemed plausible.

When Tonken told you that he could get Cher, or the Backstreet Boys, or Diana Ross to your event, you believed him, in no small measure because there was that tape of the Clinton’s toasting him at a star-studded 2000 Hollywood fundraiser, which Tonken produced.

The fact that Tonken told you what celebrities he could deliver for your charity event while George Hamilton sat next to him nodding agreeably only helped. Likewise, the Lewises hired competent and honorable people, who themselves had no part in the fraud, but who talked persuasively about the NSFF’s mission.

There are people out there who by dint of personality or sociopathic immorality are capable of defrauding well-meaning and otherwise prudent charities.

So how do you keep your charity’s nose clean?

• The test of time. Like all Ponzi schemes, the earliest participants do just fine. The NSFF was able to make equipment payments for the initial school districts with the earnest money paid by the ensuing school districts. But the whole NSFF enterprise rose and collapsed within the space of five years. If as a school district you said no to the NSFF the first time around, by the second time they came around it was all over but the shouting.
• Don’t be seduced by celebrity flash. Two of Tonken’s more common techniques for securing celebrity support was the use of expensive gifts (watches, jewelry and the like), and by making large pledges or actual donations to the celebrity’s own charity. Both were paid for with someone else’s money. For his part Lewis successfully wooed a number of prominent politicians, who publicly hailed the work of the Foundation. If you looked no deeper than the celebrity involvement or implied political endorsement, you were likely sunk.
• Don’t dismiss niggling doubts out of hand. The fitness equipment cost for each school in Cameron Lewis’s scheme was something like $50,000, which the NSFF pledged to repay in full. But there was no legitimate revenue stream to cover that expense. My mind reeled when Cameron first laid out those numbers. There’s about 90,000 public schools in the United States and 90,000 multiplied by $50,000 is $4.5 billion! There’s not too many $4.5 billion charities in the United States. But I said to myself, “they seem like capable people. Surely they’ve figured out something that isn’t apparent to me.”
• Curb your desperation. The schools got sucked in because of the epidemic of obesity in American children these days. The school districts desperately needed something that worked, and the NSFF had compelling evidence that their program was effective. Likewise, the charity I worked for desperately needed a splashy event that announced its arrival. What better way to do that than with a bunch of A-list celebrities in attendance?

This is hardly an exhaustive list. And I’ve left out obvious things like having a competent accountant or lawyer look over agreements or books. That’s probably prudent, but one of Lewis’s own financial people, a very sophisticated and principled CPA, didn’t smell a rat until he’d been there nearly a year; but when he smelled the stench of fraud, he immediately resigned. And in the case of Aaron Tonken, he wouldn’t have shown you his books if you’d have asked and didn’t have to because he was organized as a for-profit.

It probably wouldn’t have been that helpful to check references either. The first schools in the NSFF program were delighted. Until Tonken's tell-all book came out, so was every celebrity he dealt with.

If a charity you’ve worked with/for has been defrauded, or had a close call, feel free to share your experience.

Cause-Related Marketing Potpourri

My email box has been filling up with releases from PR types about various campaigns. A handful are even about cause-related marketing!

Here then is a grab bag of worthy social marketing campaigns that don’t warrant their own posts, but are nonetheless worth mentioning.

Nov 19 was Luzianne Coffee’s “Non-Bitter Monday.” The event included trash pickups in five cities in Louisiana, and a $50,000 donation to be split among six charities: Make-A-Wish, Toys for Tots, Teach for America, Gulf Restoration Network, Habitat for Humanity, and America’s Wetland. The exact split is to be determined by votes collected at endbitterness.com. Voting ends March 31, 2008.

Reprise Media, a search engine marketing and optimization outfit out of New York City, and a division of Interpublic, has launched a pro bono initiative for nonprofits. Their first client is the Center for Global Development, a nonprofit think tank. Other nonprofits are invited to apply for Reprise’s SEM, SMM and SEO services at their website.

Microplace.com, a wholly-owned subsidiary of eBay launched in late October, offers people a way to loan money to the working poor in the developing world using the proven principles of microfinance, while receiving a return on their investment. Investments as small as $100 are accepted.

Origins Organics, which sells a line of organically-sourced skin care, hair care and bed and bath products in stores, is offering a branded reusable canvas bag. Quoting from the release: “100% of the profits from the purchase of this bag will be donated to OFRF (Organic Farming Research Foundation).”

Greatnonprofits.org follows the lead of Epinions, Zagats and Amazon and allows users to review their experiences with nonprofits. As of today featured nonprofits are overwhelmingly in Pittsburgh, Pa.

Some random thoughts:

• Greatnotprofits.org may scare the hell out of a lot of nonprofits, hospitals for instance. I don’t know if greatnonprofits.org will be the final expression of user-generated content when it comes to nonprofits. But I do know that more than ever charities need to do a better job of managing all their stakeholder ‘touchpoints.’
• The 100 percent of profits language in the Origins Organics offer is weak. And it’s hard to believe that the Organic Farming Research Foundation holds much built-in affinity for consumers.
• It will be interesting to track how Microplace does. There are plenty of places to make donations in support of microfinance in the developing world. Will the addition of the profit motive expand the base of participants or contract it?
• As for Luzianne, I dislike these mechanisms whereby there’s competition between charities. I don’t think it reflects well on Reily Foods, Luzianne’s owner, and I doubt it moves product as well as a more straightforward cause-related marketing campaign.

A Duck-Billed Platypus

The other day I got an email commenting on my nostalgic post last June about the old Children’s Miracle Network (CMN) Telethon.

I spent seven years at CMN, five of the them writing the Telethon. In those days it was 21 hours of live TV that aired on more than 225 TV stations in the U.S. and Canada.

In effect, the person said, “alright smart guy, what would you do to return the CMN Telethon (now called Celebration) to its glory days?”

Let me be clear. The email didn’t come from anyone at Children's Miracle Network. And I'm not privy to what the management at CMN and the show’s producers have in mind for Celebration in the near or distant future.

Here’s how I responded:

• CMN needs to decide who the audience is for the Telethon (or who they want it to be). The whole time I wrote the telethon I never got a straight answer to that question. When I left, the Telethon was loaded up with male professional athletes. They were great for the sponsors. But were athletes more likely to get the phones ringing? I doubted it then and now. I guarantee that a satisfactory answer to the question of who the show’s audience is helps answer every other question, too. For instance, suppose CMN decides that the audience is Gen Y. Then the show needs a Facebook account. It must be interactive and have loads of other new media elements. Maybe they ask people to submit their own elements for the Telethon or enable a blog campaign. If they decide it’s women 35-54, then the show must continually emphasize trust in the hospitals and the use of funds. Etc.


• Decide what the goals for the Telethon are. Is it to build top-of-mind awareness for CMN or the hospitals? Develop donors for the future? Raise money that weekend? Cement the relationship with the stations? Stroke the sponsors? Reward their employees? Chances are it’s all those things and more. So the question becomes, what’s the prioritized order?


• Reconsider every host based on who the audience is.


• The awards show format mixed with telethon elements is a platypus; neither beast nor foul. CMN needs to choose one or the other and quit trying to split the difference. And they should think very hard before choosing the awards show format. There’s no audience for award shows like Celebration as it’s currently constituted except a narrowly-defined internal audience. The only awards shows that work are the music shows; the various country music awards, MTV’s show, etc. ESPN’s Sportsman/Women of the year is a notable exception and one that CMN probably can’t duplicate because they don’t have the built-in audience that ESPN does.


• Interject some light back into the Telethon. Literally. The location in the Orlando hotel room is bloodless. And dark. Part of the wonder of the CMN Telethon back in the day was its location out-of-doors at Disneyland’s Videopolis. Under the warm California sun the Telethon looked brighter, more hopeful and different than any competitor.


• Position the CMN Telethon against the MDA Telethon by making it squeaky clean. The Jerry Lewis Telethon is slightly edgy; Jerry just can’t stop himself. Don’t try and follow his lead. Note I didn’t say bland. The CMN Telethon can still be fun, exciting, and cool, without being milquetoast.


• Own up to being a telethon. I said it in my original blog post and it’s true, there’s 500 channels and programming of every kind. But not one thing on the air like the old CMN Telethon.


• Test everything. Celebration is entirely pre-produced and packaged. And so it’s possible to think of it as a type of “direct response television.” The direct response TV folks (think late-night informercials, or long-form charity appeals) test everything: show approaches, hosts, celebrities, entertainment, scripts, shooting and editing techniques, and various emotional appeals (CMN calls ‘em ‘Miracle Stories’). CMN could/should take a page from direct response TV.

Do those eight things (and do them well) and the Children’s Miracle Network Telethon would return to its glory days.

Cause-Related Marketing for the Beautiful People

H.L. Mencken, the legendary cynic, wrote, “nobody ever went broke underestimating the intelligence of the American public.” Recently James Surowiecki, in his book “The Wisdom of Crowds” says that’s probably false of Americans (or any group in the aggregate).

However, notwithstanding that, I do believe there’s a corollary that holds up very well: “you’ll make a mint catering to people who feel like outsiders.” Witness the success of the Harry Potter books and movies, for instance.

And so it’s with mixed feelings that I review this campaign from the website Net-A-Porter.com. Net-A-Porter.com, part fashion magazine and part catalog, supports Fashion Targets Breast Cancer (FTBC), a fundraising campaign of the Council of Fashion Designers of America Foundation.

There are also FTBC organizations in the UK, Ireland, Australia, Greece, Japan, Canada, and Portugal orgainized under different auspices. Since 1994, FTBC has raised more than $40 for breast cancer charities in 13 countries, the ad informs us.

The FTBC fundraising approach is that they invite a prominent designer to design some kind of clothing using the FTBC logo and then sell it at tony prices. The polo shirts at left are designed by Ralph Lauren and retail at the Net-A-Porter.com website for $75.

Now, I have nothing against willowy supermodels in bikinis and skin-tight shirts. I like Ralph Lauren. As a cause marketer I admire the price FTBC is asking for the shirts.

But something about this ad and this cause marketing approach makes me feel like an outsider, like an awkward high school boy who can’t get even a nod from the pretty prom queen.

So I ask, where’s the chic products for us fashion outsiders?