How sparkleponies might just save the world
One of the most dangerous things about a consumer-focused material goods economy, from an environmental perspective, is that in order for you to have a sustainable business, you have to consume resources. Not only do you have to consume resources, you have to consume a lot of them. That’s at odds with the long-term environmental goals we need to reach in order to keep things habitable for us on this little blue marble called Earth. There are other worlds out there that might sustain us, but moving the human race 600 light years to Kepler 22b isn’t really an option at this point.
So how do you keep a consumer economy running while mitigating its impact on the ecology? Here’s one answer that came up last night in World of Warcraft: sparkleponies. Its proper name is the Celestial Steed, which you can buy for your in-game character for $25. (on sale now apparently for $10). Here’s another variant, called Tyrael’s Charger.
Yes, it’s a shiny pony with angel wings that your character rides around.
What does this have to do with anything? In this case, it’s getting consumers to buy a virtual good, a consumer item that has no manufacturing cost of real world resources except electricity and the server farm that World of Warcraft runs on. What’s more, once the infrastructure is in place, there’s almost no actual cost to make one more sparklepony or one million more of these. They’re just rows in a database.
They’re rows in a database, however, that people will pay money for. Things like convenience and status in a virtual world are just as important as in the real world, and as we integrate technology into our lives more and more, these virtual goods become just as valuable as the physical goods we’re used to buying.
This trend can only accelerate. The faster we deplete natural resources, the more expensive it will be to manufacture physical world commodities. Thus, if you want to be ahead of the curve and taking advantage of consumer willingness to purchase virtual goods, figure out some way to add digital products or services to your current offerings. You’ll save the environment and make money at the same time.
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
Social Media Job Search Webinar 10/26 8 PM ET
Please join me Wednesday, October 26, at 8 PM Eastern Time, for a 45 minute webinar on social media job search. This is a webinar based on my past experience as a hiring manager, technical recruiter, and in my marketing and sales work today. It’s an expanded version of some of the course material I teach for the University of San Francisco and is one of the most popular sessions I’ve ever created, and for good reason in this economy.
Caveat: this is not a session on how to find a social media job, but how to use social media to find a job.
In the session, I’ll be showing you:
- how to set up some of the necessary groundwork in your social media profiles
- how to package up your expertise
- how to prospect effectively using social media
- even a couple of interviewing tips
The webinar is free of financial cost to attend, but I will ask for your personal information and subscribe you to my newsletter.
To register, simply complete this form:
Leading economic indicators
Predicting the future is no easy task, especially in uncertain economic times. One of the ways economists, market watchers, and armchair pundits try to ascertain what’s happening and going to happen is by focusing on economic indicators. Economic indicators are metrics that are derived from a variety of data sources such as manufacturing firms, census statistics, government agencies, and more. There are tons of economic indicators out there – virtually anything that can be measured is being measured.
Broadly, there are three categories of economic indicators: leading, or indicators that might foretell what will happen, coincident, or what’s happening now, and lagging, or what happened. Most folks with a vested interest in finance, marketing, business development, or the economy focus on leading indicators.
Here are a few of my favorite leading indicators and what they mean. Feel free to add your own in the comments.
ISM PMI/NMI report: Of companies making stuff, how many have new orders? The ISM numbers are really important because they tell you about what’s happening to companies that make stuff. Physical production of goods isn’t something you can game too far in advance (no one rationally builds up a 3 year inventory these days for most industries), so ISM numbers can tell you what will be hitting shelves and marketplaces in the next 6 months. Click here for an example of the most recent ISM report.
Weekly Jobless Claims: how many new people filed for unemployment insurance each week? While this number doesn’t reflect the broader picture of underemployment or discouraged workers, it’s a good number for indicating churn of jobs and how fast the economy is creating or losing jobs. Bloomberg puts together a nice chart here.
Google Trend Searches: Google Trends shows you what people are searching for. Here are a couple of useful searches that tell you how many people are searching for job-related terms such as laid off or get a job.
Baltic Dry Index: One of my perennial favorites, the BDI shows you what it costs to ship something on a cargo ship. Generally speaking, you don’t invest in cargo space unless you have something to ship, so BDI is a reasonably good gauge of shipping demand. Bloomberg again comes out with a great chart. Flip it to 5 year view to see before and after recession.
For marketers, these sorts of numbers are somewhat useful because they give you an idea of how the economy will strain or boost your prospects’ willingness to buy. If you want to get really innovative, look for economic indicators that are specific to your vertical or niche. For example, let’s say you wanted to create a social media economic indicator of some sort. You’d want to blend in PCE, a basket of company stocks specific to the space (LinkedIn, Renren, Google, etc.), and perhaps even something like the average cost of broadband from the OECD.
Once you have your own set of economic indicators that are reliable, you’ll know what is going to affect your business, your clients, and your revenues in the days and weeks to come, hopefully before any of your competitors. You’ll be more agile because you’ll know what is coming and how to adapt more quickly.
What would you use to predict the fortunes of your vertical’s business cycle? What are your personal leading economic indicators?
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
Dark economic times ahead?
Are you good at putting together the pieces? There’s a lot going on in the world, and individual pieces may not seem like much, but put together they can create an attention-getting picture. Here are a few pieces you need to put together right now.
1. Europe’s financial system is crumbling. Specifically, the European Union’s interstate monetary system is on the verge of a meltdown the likes of which we have never seen before. Tune into any financial news network for the latest. I prefer Bloomberg, personally.
2. The United States economic recovery is slowing down because the Federal Reserve has stopped pumping trillions of dollars into the economy for free. (incidentally, this is a great article that explains what the banks did with the money)
3. Our biggest export markets include China and Europe. China has already put the brakes on its economy to stem inflation. That’s one of the many reasons why the “recovery” hasn’t really felt like one, and why so many of your friends and colleagues are still looking for work – without a healthy increase in exports, US companies aren’t selling as much, which means we aren’t making as much, which means we aren’t hiring as much.
4. The fractional reserve rate requirements in the US are about 1%; in Europe, about 2%.
The bad news is this: because the world’s economies are so interlinked, because our financial systems are so interdependent on each other, the house of economic cards is extremely vulnerable. Not only that, but between banks leveraging themselves out the wazoo and consumers not experiencing any meaningful wage growth (which means no increased consumer spending), all it takes for a massive financial crisis (bigger than 2008) is one solid system shock.
How solid a shock are we in for? We’ve never seen an entire continent unified under one monetary system like the EU, which means we’ve never seen a system failure of that magnitude in modern times. That appears to be in the cards in the next year or so, unless the EU volunteers to break itself apart, which seems fairly unlikely. How big does the shock need to be? Just enough to overwhelm the fractional reserve requirements.
What should you be doing personally? Whether you’re a citizen of the US, the Americas, the Eurozone, or anywhere else, realize that we are all (for good or ill) in this together, and when things go south with the European financial crisis, the shockwaves will be felt everywhere in the industrialized world.
- Cash is your friend for operational expenses like daily life.
- Reduce the amount of debt you carry if you’re financially able to do so.
- Things like gold for long term capital preservation aren’t bad if you have the ability to buy some.
I’d stay away from investments at this point for a variety of reasons, not the least of which is that high frequency trading makes the market exceptionally vulnerable to system shocks. Consult a financial planner who has their fingers on the pulse of the world economy to get an idea of how you should diversify.
Are you running a business? Get ready for a slowdown. Beef up your database, beef up your lead generation, go full tilt on customer retention and be as flexible as you can with payments because your customers will be suffering as well. Treating them as well as you can (while not endangering your own finances) during rough times will earn loyalty that’s unshakeable.
If you’re thinking of making a career change, don’t you dare leap before you have something lined up. A miserable job that pays the rent is preferable to no job at all, and with the world economy on the edge, a system shock will make everyone go into turtle mode; hiring for anything except essentials is likely to dry up.
Always, always, always be building up your network. Grow it as strong as you can, because it’s the only thing that will save you if things go really badly. Jeff Pulver is fond of saying that we live or die on our databases, and that may literally be true in a very bad case scenario. You owe it to yourself and anyone you have responsibility for to be building like crazy right now.
I’ll take this moment to practice what I preach. Get connected:
What if things don’t go as badly as the predictions seem? What if things turn around? All this preparatory work will leave you with…
- a solid network you can rely on
- diversified financial investments
- employment
- cash to operate with
So even if these dire predictions are 100% wrong, you’ll still benefit from most of them. The only place you might lose out on is opportunity cost for not investing in the stock market.
I am not optimistic at all right now about the second half of 2011 and first half of 2012. There are far too many indicators that suggest rough seas ahead. Batten down the hatches.
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
The incredible danger of third-party payee systems
USA Today and Get Rich Slowly both featured an absolutely amazing statistic recently that blew me away:
The amount of student loan debt outstanding in the US now exceeds the amount of credit card debt outstanding.
Rattle that around in your brain. The legions of people buying crap they don’t need with money they don’t have are now second to kids accruing massive amounts of debt for an education of questionable value. College tuition has gone up to astonishing highs, in which students are graduating with a bachelor’s degree at price tags of a quarter million dollars.
How did this happen? Why did this happen? The answer lies in third-party payee systems. Here’s what that means. You generally don’t pay cash for college. You take out loans, you get scholarships, etc. Uncle Sam pitches in with loans, too. What happens then is that the price becomes decoupled from the people who pay it. Colleges effectively are getting their money from banks, not consumers, and banks in turn get their money from consumers. The problem with decoupling cost from buyers is that it changes how market forces work.
In a normal market, prices change demand. If you raise your price to be too high, people will stop buying your stuff. They’ll find cheaper alternatives or simply do without. As a result, you have a soft cap on how high your prices can rise before your business becomes unprofitable and you have to bring prices down, or competitors step in to take profits at slightly lower margins, forcing you to reduce prices.
In a third party market, if someone is paying the bills and passing the costs on, neither party has an incentive to control prices. Neither party benefits from regular market forces – in fact, quite the opposite. Both parties acting on behalf of the consumer have strong incentives to make things as expensive as possible as quickly as possible. A good example is real estate – if you had to pay cash for a house instead of borrowing, there’s a good chance that:
- many people wouldn’t own homes
- those who owned homes would have bought them for materials cost plus labor
Once you introduce a third party into the system that pays on behalf of the customer, prices and reality begin to dine at separate tables. It takes much, much longer for a price increase to change the consumer’s behavior when a third party is paying on behalf of the consumer, and as a result, prices rise at amazing rates.
The only way to get prices back down to earth on any third party system – healthcare, college, housing, etc. – is to remove the intermediate party and recouple prices back to the consumer. The consequences of doing so are drastic, possibly economy-breaking. Colleges would lose 80% of their students overnight until they adjusted pricing. Houses would sit empty for years, or possibly never be bought at all. Healthcare would be denied to everyone but the wealthiest at first. It’s this nuclear scenario that prevents us from making substantive changes that in the long term would benefit us, but in the short term would be incredibly painful.
There is one other option, one which holds more promise, and that’s revolution. Online marketing has made life very hard for direct mail marketers and other channels. Online forums have been the death knell for newspaper classifieds. Once the way of doing business is shattered by a completely new model, the old model becomes affordable as the market leaves for greener pastures or is rendered irrelevant. Education is headed this way rapidly: why pay $250,000 for information and skill you can acquire with Google, iTunes, and online learning? Eventually, colleges and education groups may realize their role isn’t the dispensing of knowledge, but the certification that you have it and can wield it. Certification comes at a much lower price tag than today’s current model.
What do you think? Is college worth it? What about home ownership or other third-party payee systems?
If you enjoyed this, please click here and share it with your network!
Want to read more like this from Christopher Penn? If so, please subscribe right now!
Click here to read my blog on Google Currents on your mobile!
Marketing White Belt |
Watch me speak:
Attend virtually! |
I recommend: for Twitter audience building. |
Financial aid swansong: Massachusetts College Goal Sunday
Financial aid swansong: Mass. College Goal Sunday
It’s fitting that my last work in the world of financial aid was to volunteer at Massachusetts College Goal Sunday. This year’s CGS was significantly different for me personally than in years past for several reasons.
First, this is the first year I’ve presented at College Goal Sunday.
Second, this is the last time I’ll be working in the financial aid industry after my departure at Edvisors.
Third, the differences in the FAFSA and FAFSA on the Web worksheets this made for a more complex, more challenging College Goal Sunday than ever before.
Let’s start with the first – relatively late in the process of creating this event, I was asked to present for the Framingham/Metrowest site. I spent some time reviewing and editing the presentation beforehand, working with the national College Goal Sunday committee to make it a little more streamlined…
… but the projector at our site didn’t work, so I ended up winging it instead. The truest test of a presenter is when everything goes wrong and that lovely slide deck you made just flat out doesn’t work. How well do you know your stuff? I’m proud to say that having none of my slides didn’t compromise the presentation at all – and in fact might have helped because the audience then HAD to listen to me and couldn’t mix up their verbal brains trying to read slides and listen to me talk at the same time.
On the second point, I can say pretty much whatever I want now that I no longer work in the industry. This is rather liberating.
Here’s the biggest challenge that we had at this year’s College Goal Sunday. The form given to students and families, the FAFSA on the Web Worksheet, is basically not worth the paper it’s printed on. It’s supposed to make the FAFSA process easier and more friendly, but instead makes it deeply confusing and frustrating for many students.
If you look at the slide deck for presenters, there are half a dozen slides which are all labeled, “Important question not on the worksheet”. That the College Goal Sunday committee had to go to these lengths is a sad commentary on how poorly the government’s forms were created with regard to the online application. Things that are omitted? Well, for starters, questions like assets (cash on hand, in savings and checking – vital financial aid information) don’t appear anywhere on the worksheets but are in the online application. Someone just using the worksheets would be rather startled to be asked for a bunch of information that isn’t in their preparatory worksheets.
Other questions that are deeply flawed? One of the biggest showstoppers – and one that caused more than one FAFSA application to completely fail – is the question about income tax paid in 2009. Again, this doesn’t appear anywhere on the worksheets. However, the wording in the online application is incredibly vague:
“Enter the amount of your income tax for 2009″.
This single question caused more errors and blowups in the application than any other, of the families I worked with. What should the question actually say?
“How much did you pay to Uncle Sam in taxes (NOT withholding, not your annual income, not anything other than what’s on line 55 of your IRS 1040) last year?”
Very few of the families who completed the FAFSA got this question down in the first attempt. Many got to the end of the application and were confronted with an error correction screen saying that the numbers in their application didn’t add up.
Another doozy, one that can affect your financial aid significantly in some cases? There’s a question about your adjusted gross income in 2009. In the online application, there’s a “helpful calculator” which supposedly can help families estimate how much their AGI is. As far as I can tell, this calculator doesn’t do anything useful, which is a shame since there are several adjustments that CAN change your adjusted gross income, which in turn can change your financial aid eligibility, such as the tuition and fees adjustment or the student loan interest adjustment. None of these are accounted for in the online application.
There are also some interesting interface issues with the online version of the FAFSA, one of which is a dealbreaker of sorts for people looking for help. Along the righthand side of the application, there are floating help boxes that change contextually based on what question you’re on. Lots of students and families today said they couldn’t find the help system at all…
… because they thought those boxes were ads. They’re strategically located in almost the exact same spot as you’d run a skyscraper banner ad, and if you look at studies of how our brains interact with web pages, we nearly automatically ignore advertisements like banner ads.
I’ve nothing but positive remarks for the staff and volunteers for this year’s College Goal Sunday. As usual, everyone who volunteered did so out of the goodness of their hearts, giving up a Sunday afternoon to help students and families figure out the world of financial aid and get them started on that path. I commend the folks at MASFAA and its partners for continuing to make this important day happen every year. I just wish Uncle Sam made it easier for those families to get through the paperwork to accomplish their educational goals.
Finally, College Goal Sunday was a great note to end my career in financial aid on. Nothing’s better than helping other people, and that’s a great way to go out.
Stay tuned tomorrow at noon eastern time for where I’m going next…
Did you enjoy this blog post? If so, please subscribe right now!
Enjoyed it? Please share it!
Get this and other great articles from the source at www.ChristopherSPenn.com
Book Me to Speak
Got an event coming up? Learn why you should book me to speak!
• Download my 2012 speaking kit
•Book me to speak now!
Get Marketing White Belt
Grab my new book, Marketing White Belt: Basics for the Digital Marketer, and get better at marketing right now!
Blog Delivery
Things I recommend:
I recommend:
for Wordpress themes like this one.
I recommend:
for Twitter audience building.