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Archive for January, 2007

Mistakes. They’re the Only Thing that You Can Truly Call Your Own.

Monday, January 8th, 2007

Please raise your hand if you send out proposals to clients. Please put your hand down if you have ever made a mistake with pricing on a proposal. For the record my hand was up and now it’s down.

Unfortunately, I believe everyone who sends out proposals has probably made a number of pricing mistakes over the years. The question for me has always been:

  • How do you handle it?
  • What do you say to your client or prospect?
  • What do you say to your boss?

I have always said there is a tremendous amount you can learn from a mistake. Clearly how you handle that will determine how your clients view you in the future.

Last year, US Airways accidentally sold flights for the low, low, low price of $1.86. Guess what? They honored the mistake and their customers and the business community really appreciated that and clearly respected them as a result.

Back in September during a four day period, Holland America accidentally sold cabins on ten sailings aboard the Noordam from January to April for well below cost. Cabins that normally cost $1,399 a person showed up for $849.

You are probably asking yourself, so what? They would do the right thing! They would do the same thing that US Airways did!

This is the part that is unbelievable!

The cruise company has notified passengers they will be required to pay the difference in the fare. Some customers were notified a month before their cruise that they owed $1,100. The only choice they were given was pay or not to go. The cruise line did give customers a $100 shipboard credit for their mistake.

I was shocked! In fact, I am still shocked. Weren’t we all brought up the same way—that your word is everything? Stand behind what you say! Stand behind what you do!

When someone at M/A/R/C misses the boat (no pun intended) on a proposal we discuss how/why it happened and what we learned from the situation. We never have discussed charging the client more!

I haven’t heard if Holland America has changed their minds and honored their commitment, but my hope is they did.

Has this happened to you?

How did the company handle it?

I look forward to your thoughts and comments.

How Would You Like to Get Paid $6,650.00 an Hour?

Friday, January 5th, 2007

As you know, I usually think about different blog topics while I’m working out on the treadmill. Well this one is no different. I was reading the business section of the Dallas Morning News and just read the story about J.C. Penney Co.

Let me state that I have never worked for the company, don’t know anyone who works there and don’t own any shares of stock.

Let me fill you in with the details.

J.C. Penney Co. announced they terminated the contract of Catherine West, the Chief Operating Officer. News like that happens all the time, but the real story to me is she was paid a $10,000,000 severance package. Yes that is ten million dollars! Yes the number 10 followed by 6 zeros! By the way, did I mention Catherine was only on the job for…six months?

Based on a 60 hour work week she was paid $6,650.00 per hour.

Here is what I don’t understand:

  • How much strategy could they develop in six months?
  • How much strategy could be implemented?
  • How much could one person in a publicly held company accomplish in six months?

Don’t most executives join a company, scope out the lay of the land and then make decisions? Doesn’t that take a little time? Reminder: this isn’t a severance package for someone who was a long standing employee. She didn’t work there for 25 years, not even ten or six years – it was only six months.

  • How do you think James Cash Penney would feel if he knew that someone was at the company he founded for six months and for whatever reason didn’t work out and was paid $10,000,000 to leave!
  • How do shareholders feel?

This story isn’t that different than many others and this posting isn’t directed at Catherine West and J.C. Penney. This happens all the time and I can only think of two reasons why it happens and will continue to happen:

  1. People take care of their own – Corporate boards take care of each other and if it happens to them they want the same in return.
  2. If they don’t pay large severance packages, executive search firms might not be able to recruit executives to the company because it could tarnish the image of the company

How do you feel?

Take the $250.00 Challenge (Closed to new entries)

Tuesday, January 2nd, 2007

Periodically I will review my 401k accounts. When I checked online this morning I noticed that my Harris Interactive account was up 16.5% year to date and my Omnicom 401K account was up 16.6% year to date.

It got me to pause and think about a challenge, a little contest for the blog. So here goes.

What I would like to propose is for readers of the blog to pick one stock that they believe will go up dramatically in 2007.

Here is what you need to do:

  • Respond to the blog with your stock name and if possible symbol
  • State the reason why you picked the stock you did

It’s as simple as that.

We will do the rest.

A few things to remember:

  • You need to respond by January 15, 2007
  • You can only have one entry
  • Only one person can have a stock, so the person who responds first gets the pick and we will notify anyone who has a duplicate stock.
  • If a stock splits, we will make the necessary calculation and adjustment
  • We will use the stock prices as they were at the time the market closed on 12/29/06.

We will frequently post a leader board.

There will be at least two prizes.

The 1st prize will be $250.00 for the person whose stock goes up the highest percentage in 2007.

The 2nd prize will be $100.00 for the lucky loser whose stock goes down the highest percentage in 2007.

I will get the ball rolling with my choice. An easy one. Coca-Cola Bottling Co. Symbol COKE. They will follow up a successful 2006 with an even better year.

Take the stock challenge of 2007!

Get your entries in today!