In major marketing campaigns – in business or politics – there’s nothing more frustrating than losing. But a lack of funds or a small war chest is not the salient reason for defeat. It isn’t necessarily how much you spend.

There are many reasons for marketing failure of a campaign.

Here are 14 of the more important reasons:

1. Inadequate analysis of strengths, weaknesses, opportunities and threats
2. Drawing incorrect conclusions from the analysis (leading to ineffective overall strategic planning)
3. Unrealistic budgeting
4. Ineffective testing of ideas and messaging
5. Arrogance – over confidence
6. Poor coordination with centers of influence
7. Not developing effective teamwork and communication among stakeholders
8. Targeting the wrong market
9. Lack of job descriptions – who will do what and when?
10. Wrong people in many key positions
11. Poor positioning in attributes and benefit statements
12. Ineffective allocation of promotinal funds – wrong mediums preventing top-of-mind awareness in customers, or voters
13. Unproductive evaluation of the campaign and return on investment
14. Unsuccessful responses to negative surprises and failure to capitalize on opportunities

Two basic rules include: “Know thyself” and “Know thy audience.”

Not to over-simplify, in essence, the key is to properly plan but only after you perform an analysis. Identify your centers of influence and strategic partners, quantify your goals, make a budget, identify your target audience, test your messaging, implement your plan, create a positive image, create a call for action, continually evaluate your progress, and respond to challenges and create opportunities.

No detail is too small: In collateral, from colors to font choices, or in developing centers of influence for the multiplier effect. But don’t get paralysis from analysis.

Plan your campaign to reach each person in your target audience with a positive message for a minimum of five times. That’s the magic number for optimal results. And be consistent to develop trust.

Remember the difference between marketing and advertising.  Broadcast advertising is all about frequency, reach and cost per thousand. Internet advertising is concerned about cpm, pay-per-click, pay-per-lead, and cost-per-action. But marketing is not simply creating a radio, TV or Internet advertisement or harnessing social networking tools. Advertising is merely one component of marketing.

Marketing pertains to the big picture. Marketing is the understanding of your target audience for the cost-effective process of selling the right product or service at the right time and at the right price. It’s a systematic development, coordination and implementation of a myriad of initiatives – proactive events – not just a bunch of advertisements.

Social media

Make certain to orchestrate and synergize your advertising with public relations, videos, word-of-mouth and social media. Thanks to the new Digital Age, consumers are in charge. Set up a dialogue, not a monologue.

For example, if you’re targeting young adults or teenagers, it’s sad to say, but they are getting their “news” from their social media.

Your communication plan should contain timelines. Press kits are helpful, but in this green age, they are not necessary. Regarding relationships with journalists, here’s a hint: Reporters like to deal with experts. So portray yourself as one.

Choose wisely. Insert and distribute effective videos and provide the right motives for people to share. The right content has to be presented in right place.

Follow the trends to see how to get the most attention. For example, Digg.com can be helpful but remember it’s mostly a young audience – big on tech and off-the-wall stories.

Just like reporters, every generation likes experts and stories. Storytelling holds great power for you. So tell a good story, write a good headline, deliver on your promises, and cite outside participants for proof in your claims.

Value perceptions

In marketing, whether its products or political candidates, people base their buying-decisions on emotion.

To keep things simple, the following explanations refer to business but are applicable or transferrable to politics.

About 18 percent of people – blue-collar and professionals, alike – will only buy your products and services at the cheapest cost in the marketplace.

The most-valued prospects are the people who are affected by their five value perceptions – motivating them to positively respond to your call-for-action.

The five perceptions and their percentage of importance in decision-making:

Employees, Spokespersons – 52 percent. The key characteristics are integrity, judgment, friendliness and knowledge.

Remember, about 70 percent of your customers will buy elsewhere because they feel they’re being taken for granted. And customers normally will not tell you why they switched to your competitor.

Image of the organization – 15 percent. They are concerned about the image of your company in the community. Cause-related marketing is a big plus in forging a positive image. So is cleanliness and good organization.

Quality of Product or Service Utility – 13 percent. The customer is asking the question – “What will this do for me?”

Convenience –12 percent. Customers like easy accessibility to do business with you. That includes your Web site, telephoning you, and the convenience of patronizing your business. 

Price – 8 percent. Price is important, but it’s the least concern among the five value-motivating perceptions.

Seven marketing elements

Once you understand what motivates the customer to buy, there are seven steps you must take for creating a happy buying environment. Fear is a great motivator. But Americans are tired of negativity. Yes, the marketing process goes a lot easier if you can make buying fun.

For marketing in a downturn or not, every PR or advertising message should – as much as possible –contain these seven elements:

1. FEE. This is an acronym for establishing a common ground for a foundation using the principles of event and empathy. Every purchase is an event in the life of a customer – no matter how big or small.  It also helps to show concern about the welfare of the customer.
2. Research/focus groups on attitudes. Use tools to get the prospect to open up.
3. Agreement on Need. Get the prospects to agree on their need to buy a product or service.
4. Generic Value Proposition or Benefit Statement. Here’s where you explain your value proposition. Remember the difference between features vs. benefits to answer the basic marketing questions, such as the acronym, WIIFM , “What’s in it for me?” or “So What?”)
5. Fill Prospect’s Need. Depending on your audience, use more specific benefit statements.
6. Commitment – Ask for the order using a non-threatening, closed-ended question.
7. Seal the Deal. This final step has three components –

• Use the magic words:  “Thank you.”
• Prevent buyer’s remorse – remind the customer of benefits they’re receiving
• Look for an opportunity to provide the person with unexpected, perceived added value without hurting your bottom line.

How to overcome objections: If you’re at a meeting and encounter an objection, don’t blow it off.

In order to overcome an objection, it’s important to use empathy.

Here are the three steps to overcoming objections:

1. Get the prospect to restate his/her concern. Then repeat the person’s words:  “If I understand you correctly, you feel…?”
2. Empathize:  “I can see how you feel that way”…or “You know, someone said the same thing last week.”
3. Overcome the objection with facts.  (Then recap the seven steps.)

After you’ve won, best-practices also call for follow-up and laying a foundation for an infrastructure that promotes long-term success.

From the Coach’s Corner, do you want a fun look back at the top 100 advertising campaigns of all time?

Here are the top 100 campaigns: http://adage.com/century/campaigns.html

March 9, 2010 

Call it brazen. Call it economic development. Whatever your preference, Idaho Governor C.L. “Butch” Otter is an opportunist.

In the wake of out-of-control policies and behavior by public officials in Washington and Oregon, he’s issued a press release to recruit companies to his business friendly Idaho.

That’s right, dated Monday, March 8, 2010, the headline reads:

“LOVE LETTER TO OUR NEIGHBORS: IDAHO IS OPEN FOR YOUR BUSINESS.”

No joke. In capital letters complete with the word “YOUR” in italics, I’ve cut and pasted the headline verbatim.

Here’s an excerpt from his combination “love letter” and news release:

“We now are reaching out to hundreds of Oregon businesses, and will do the same with those in Washington if the legislature there follows Oregon’s lead. We aren’t offering many bells and whistles, but what we can offer is a business-friendly State government, a highly qualified and motivated work force, and communities where people understand that while government cannot be the solution to their problems it can and must be a champion for their own solutions.”

Here’s his salient comment about the Washington State Legislature:

“Legislators in the state of Washington are talking about even bigger tax increases to tackle a budget deficit that figures to be as big as Idaho’s entire State budget. Businesses in both states are like those in Idaho; they are facing the most challenging times in decades, and even incremental cost increases can mean the difference between surviving and closing up.”

About Oregon, he writes: 

“The problem in Oregon is that folks were convinced that state government was what needed to be shored up rather than the jobs- and revenue-producing private sector for which state government is supposed to work. As a result, they’re chasing some of their cash cows to the border. And I welcome those businesses with open arms.”

People have stopped asking me why I write about public policy so much or why I’ve created an Op-Ed category on this Web site. They know significant action is needed for a strong economic climate and the creation of jobs. 

The record is clear. At all levels, government is hindering economic growth and job creation with unproductive policies and behavior.

My hope for Washington state is that voters wake up and smell the coffee for a revolution in this November’s elections and successfully demand government reform – reminiscent of 1994 after the Washington State Legislature imposed huge tax increases on business in 1993. You might recall countless politicians were swept out of office.

Even the Washington State Association of County Assessors took note of the voters’ angst. In Nov. 1994, the association invited me to advise them on media strategies to lower property taxes. Only then-interim King County Assessor Scott Noble opposed me.  As a result in the ensuing legislative session, lawmakers lowered property taxes by 4.7 percent. (Mr. Noble later became the permanent assessor but was driven from office in 2009 after his drunk-driving accident injured two female motorists.)

The 2010 legislative session has grossly increased taxes and destroyed standards of government transparency instead of implementing efficiencies. As a management consultant who performed services at two state agencies, I’ve witnessed the state of Washington is sorely lacking in best-practices management and performance. And as I’ve often warned, this is resulting in more theft of our economic and political freedoms.

From the Coach’s Corner, see for yourself. Here’s the link to Gov. Otter’s invitation.

My thanks and appreciation go to Jason Mercier of the Washington Policy Center for distributing it.

Franchising is big business. A published report indicates one in 12 businesses is a franchise. In the aggregate, franchises provide jobs for 14 million Americans. It’s an accepted business model for people who want to be in business, but who need business-model support.

To be successful for either side – the company or franchisee – it takes commitment and discipline.

Companies have to be diligent about selling to the right franchisee – someone who has the character and tenacity to successfully follow a game plan and be committed to community involvement. That’s one reason for MacDonald’s success. It’s been estimated MacDonalds only selects 1 percent of the people who apply for a franchise.

On the other hand, prospective franchisees have to pick the company with a strong game plan.

Quiznos appears to have picked the right person in Seattle’s Pioneer Square, located near Safeco Field where the Seattle Mariners play. He’s 30-something Victor Twu, who’s also a jazz musician and big-time Mariners’ fan. He owns a second location on Westlake Avenue in South Lake Union.

Note: His customer service and attention to detail caught my eye. My other half and I have been lunchtime customers for more than a year off and on. Sometimes, months would go by before we returned to his establishment. But he always remembered us and our favorite menu items.

He didn’t pressure us to try other menu items, which most restaurateurs try to do. They think it insures long-term customer loyalty if customers sample all the menu options. That’s true in some cases, but some customers have specific reasons for patronizing a restaurant at lunchtime, and don’t want to be bothered. In my case, it’s the location, tasty sandwich, quick service and being remembered as a customer.

So it’s helpful if restaurateurs know when and whether to lobby customers. And the savvy Mr. Twu seems understands human nature. What makes him tick?

Here’s an edited interview:

Q: What’s your background?

A: My educational background is a degree in music from the University of Washington. That said, as a musician, I gained many years of experience in the hospitality and restaurant business. But prior to my current business, I’ve had no management or business experience.

Q: Why did you go into business?

A: I decided to go into business when I was at a crossroads. I knew I didn’t want to make a career out of teaching music and taking whatever gigs I could – I wanted to play and write music because I enjoyed it. So I did consider going deeper into my education for music hoping to attend a good school in New York (the “Mecca” of jazz). Then I remembered how much I hated school, probably ever since third grade. So what about my own record label? The riskiest most unprofitable industry to get into? No. I figure I was ready to get to work. I knew I was willing to work hard and if I am going to do so, I might as well do it for myself with these goals in mind: Comfortable living, growth in knowledge and skills, and eventually gain the time and space I need so I can concentrate on music and also do a little traveling.

Q: What’s your feeling about Quiznos’ value-pricing strategy?

A: Quizno’s new everyday lower price strategy is a smart idea based on other lower price models. Market research has shown that most people believe Quiznos has superior food compared to similar brands but are not as likely to visit more often because they think it’s too expensive. The idea is to drive more volume with frequent visits and to gain new customers as well.

Q: What are your challenges?

A: Consumers are very low in confidence and this has an effect on selling sandwiches as well. People are spending less per transaction in my restaurant or visiting rarely. Not to mention, there are fewer customers due to layoffs or offices closing or lower occupancy in buildings or whatever. It doesn’t matter; the fundamental ways to operate are still the same. Each guest must get friendly prompt service and enjoy a satisfying lunch day in and day out and now I’m giving everyone a good deal as well! I’m also trying to grow my business through catering and delivery – this is a critical component to grow my business.

Q: What advice would you like to offer?

A: If you are considering being your own boss at one point you should 100 percent decide either yay or nay. Be prepared for long hours and hard work. I believe being a good example and very team-oriented is a good way to go. Nobody wants to work for a lazy dictator. If you are indifferent to your employees, they will be indifferent to your customers. Also be prepared to be number one, be the best at your craft and exude this confidence. Be prepared to enjoy mental and emotional growth and hopefully financial freedom!

Postscript: He’s apparently achieving his goals. I stopped by recently and inquired about Victor and an employee said he wasn’t at the store – he was traveling.

Go Victor and go Mariners!

From the Coach’s Corner, one cool way to make money and to feel good about your business is cause-related marketing.

For more information, see this column: “Cause-Related Marketing Can Increase Sales by Double Digits.”

Data loss and Internet-security threats are obvious problems that kill profits. So it doesn’t pay to ignore your company’s technology needs even in this economic climate.

How can you be frugal on technology and progressive-minded at the same time? Syndicated Technology is a small IT company with solutions. Established in 2008, in Tacoma, WA and branding itself, “Bringing IT together to work for you,” the company specializes in finding pricey alternatives.

It was formed by four friends – Clark Snyder, Ryan Shook, Peter Rycroft and Jerry Torrey. They have more than 60 years of aggregate experience. Mr. Snyder is the president.

Their solutions are for Washington small businesses, but their advice will give you insights if you live in other regions of the nation.

Here’s an excerpt of an interview:

Q: What security measures should a small to medium size company heed?

A: Good virus protection and a good software firewall are only two key components of an overall security scheme.

One thing that a lot of companies overlook is the need for a backup system that protects vital information assets not only from information thieves, but also from the catastrophic events such as a facility fire or the ravages of time in the form of hardware failure. A good practice is to have current backups spread across at least three levels of redundancy with one level of redundancy off-site.

It is important to educate your employees on various techniques that are used to infiltrate business and personal systems. The most successful virus that is currently ravaging computers across the world right now uses social engineering techniques to get users to voluntarily download the virus to their systems.

It presents users with a pop-up that says that the computer is infected with viruses and instructs the user to download the removal tool. This removal tool is actually a trojan-downloader that downloads other mal-ware onto the system it infects. It goes by many names, most commonly antivirus2008 or antivirus2009, and has been changing rapidly.

If you see anything telling you that you have viruses and you don’t recognize the message as being from your antivirus software, close it out by clicking on the red ‘x’ button in the upper left hand corner of the window.

Q: What security measures do you recommend?

A: Common sense and education are two of the most important tools in security and protecting valuable company and client assets. I also recommend a good anti-malware package, and good software firewall.

Q: What seem to be the biggest technology concerns for small businesses?

A: As the information technology industry changes and computers become less expensive, it makes less sense to fix a hardware problem with a system. I think we have about five years before computer systems for the consumer become so inexpensive that they will truly become throw-away appliances. What this means for businesses of any scale is cost of replacing equipment is going to become more of a smaller regular cost rather than a larger periodic cost.

Q: What do businesses seem to wrong most often?

A: Many companies allow unrestricted access to the internet from company computer systems. This opens the door for abuse of the company network and increases the likelihood of the system becoming infected with mal-ware. The websites that employees are allowed to visit can by managed by using either a router with parental controls of by using Windows Vista’s built in parental controls on smaller networks. For larger networks, it may be necessary to obtain a separate net filter box or run filtering software on the company’s server.

Another common error is to allow unlimited use of company e-mail. Implementing an attachment size cap of five MB can curb this problem and keep the email server’s storage space available for business use.

Q: What recycling recommendations do you have?

A: Recycle responsibly and often. Electronic waste has a way of taking up storage closets that could be used to store other more important things like coffee, paper towels, or tax records. Washington has instituted a law effective January 1, 2009. Manufacturers of CEPs (Covered Electronic Products) must pay for the costs involved in recycling their products. More information on electronics recycling can be found here: http://www.ecy.wa.gov/programs/swfa/eproductrecycle/index.html

Q: What other recommendations do you have?

A: One recommendation that I have is to plan on upgrading systems running Microsoft Windows XP and Microsoft Windows Server 2003 by 2014. The reason for this is that Microsoft plans on discontinuing support for XP and Server 2003 around 2014 due to the products scheduled end of life. When planning for any transition it is important to consider compatibility of the applications that are run on current systems with the new operating system software.

You can visit his firm’s Web site: www.thesyndicatetech.com.

From the Coach’s Corner, here are three low-cost measures for your computer system:

• Maximize your memory.
• Have your computers undergo a system optimization process.
• Microsoft Security Essentials is a free software that performs brilliantly.

Whether you are an established company or a startup, what you probably need most in this economic climate is a positive revenue stream. It’s possible with a higher-performing sales staff.

So you might wish to consider the latest strategies of a globally known sales trainer, Roy Chitwood, who is based in Seattle.

He says salespeople often commit seven crucial errors. Mr. Chitwood, of Max Sacks International, has the credentials to address the topic – more 250,000 salespeople at 3,000 companies in 18 countries have used his sales counsel.

He’s released a white paper, “The Seven Deadly Sins of Selling.”

Here’s an excerpt:

Sin No 1: Talking too much, listening too little. The typical salesperson walks into an office, gives the official two minute warm-up – asking about the fish on the wall or the family photo on the desk – then, like a high diver, leaps into a hot presentation about this feature and that feature, the options available, the price and the savings. There is no close. Most interviews are terminated by the prospect so they can get on with their life. Knowing what questions to ask and how to ask them is the only way to find out if you’re making a presentation to the person with the real need, the authority and the money.

Sin No 2: Selling the product, not the benefits. When someone buys a drill bit, it’s not the drill bit the customer wants, it’s the hole. People buy to fill a need or solve a problem. No one is willing to pay for a product or service they don’t need or does not perform. Yet salespeople sell as if they will. Presentations continually focus on the width, height, weight, power, speed, buttons, bulbs or whatever of the product/service. Whether they’re individuals or committees, people buy benefits, not features. Prospects have hidden buying motives. There are reasons why they select one brand over another, why one product/service seems to fill the need better.

Sin No 3: Never asking for the order. As a prominent study proved, more often than not, customers don’t have to worry about a pressured close, because in 62 percent of the cases, the salesperson never asks for a sale. For most salespeople, selling is an uncomfortable experience because they don’t know where to go in their presentations.

When prospects say “I would like to think it over,” “Your price is too high,” “I want to shop around,” what they’re really saying is, “You haven’t convinced me to buy.”

Sin No 4: Pushing for the close too often, the salesperson tries to “sell” rather than help the customer “buy.” When the salesperson is ready the trick closes begin. These old closes and gimmicks are outdated and backfire more often than they work. The prospect has fears, uncertainties and doubts about the decision to spend money, and when closed too soon, reacts negatively to being forced to makea decision. Pushing too hard means the salesperson is forcing the prospect to build a defensive wall that won’t come down easily. Following the sequence of a well- given presentation means asking for the order will be at the right time.

Sin No 5: Wasting selling time. Selling is a problem for most salespeople because they don’t know how to spend their time profitably. Selling is prospecting, cold calling and obtaining leads. It is traveling to meet strange people, having to send emails and proposals, make phone calls and hand out brochures. It is doing the paperwork and servicing the client. There is only one way to insure you get to the close, and that’s by having a logical sales procedure. This is why the salesperson should learn the buyer’s decision-making process.

Sin No. 6: Not identifying prospects from suspects. There are many people who will listen to a sales presentation. It may make them feel important or help them fill their time. Whatever the reason, it doesn’t help the salesperson get any nearer to the sale. In fact, it takes the salesperson further away from the sale because time has been wasted and the point-of-entry into a company has been mismanaged.

Presenting to people who are not qualified is just that – presenting. It is not selling. And a company or a salesperson can’t make a profit by just presenting. Probably the greatest misuse of a salesperson’s time is presenting to someone who doesn’t have the need, the authority or the money.

Sin No. 7: Making a sale, not a customer. A professional salesperson is someone who helps a prospect satisfy a need. And most importantly, your company can count on the loyalty of a new client – one that will return with repeat and increasing orders. For many salespeople, just getting the sale is the only objective. To accomplish this end, they use whatever means are available – assumptive closes, high pressure tactics, promises of extra incentives, threats of price increases or whatever other tricks are in the bag. Salespeople like this sometimes walk out with a sale, but they don’t sign on customers. In fact, the customers may be so resentful of the pressure and tricks, they may rethink their commitments.

Mr. Chitwood’s Web site: www.maxsacks.com.

From the Coach’s Corner, a study confirms the importance of maintaining your Web site for higher holiday sales. A research firm, Nielsen Online, identified the top five reasons why customers visit a retailer’s Web site before visiting its store.

The reasons include:

• Wanted to compare prices between different retailers whose stores I might shop – 33 percent
• Wanted to see if the product I was looking for was in stock – 28 percent
• Wanted to find sales in the store – 26 percent
• Wanted to come up with holiday gift ideas before I went shopping – 22 percent
• I ordered online for in-store pickup – 12 percent

Updated March 7, 2010

Watch out. A desperate situation is at hand. The 19th century phrase, “Kay Bar the Door,” is applicable to the 2010 Washington legislative session. The Legislature is creating tax bills and is spending at a dizzying pace.

You mean it isn’t helping to create a strong, state economy and environment for job-creation while facing a $2.8 billion shortfall? No efficiencies anywhere? What about the reports of mismanagement, poor results revealed in performance audits, and hundreds of thousands of dollars in state-employee bonuses?

Well, let’s consider:

• At least one formal hearing has been scheduled sans a 24-hour notice.
• Sen. Rosa Franklin, D-Tacoma, introduced an income tax bill, SB 6250.
• A ghost tax bill was introduced (that’s right, no text – it was blank).
• The Senate wants to raise $918 million with a sales tax increase of three-tenths of a cent to 6.8 percent.
• Senate Majority Leader Lisa Brown’s income-tax proposal on the fall ballot and would reduce the proposed new sales tax by one cent. It would put an income tax of 4.5 percent on many job-creators – individuals earning $200,000; heads of households making $300,000; married couples would face a new tax if they earn $400,000.
• Imposing a sales tax on out-of-state businesses and consumers who buy Washington products.
• Imposing a surcharge on auto insurance.
• Hitting out-of-state financial institutions with a business and occupation (B&O) tax.

But that’s not all – not by a long shot.

Of course, you know Gov. Gregoire signed into law the bill that “temporarily” repealed The Taxpayer Protection Act, Initiative 960. That’s a clear rejection of voters’ wishes. Three times voters have formally stated their wish for tax protections. But again, the Legislature does not have to pass tax bills by a two-thirds margin. It also removes transparency for voters about taxes they’re forced to pay.

Personally, I don’t mind taxing out-of-state credit card companies with a history predatory interest rates and fees for bogus reasons. They’re domiciled in states permitting predatory behavior that was not retroactively rectified in a credit-card protection bill passed by Congress. The predatory practices are a major reason small businesses have poor credit.

However, it appears an income tax that only hits the wealthy is unconstitutional. It would require approval by voters and a two-thirds majority in the House and Senate. But a Seattle Times report indicates Senate Democratic leaders are hoping to bypass the required two-thirds vote in the Legislature because they know they can’t overcome the Republican opposition. If they’re successful in another end-run around legal checks-and-balances, of course, lawyers will get involved.

The Democrats’ idea is patterned after a 2010 voter-approved measure in Oregon, which hiked income taxes on individuals earning $125,000, households making $250,000, and on businesses.

However, unlike Washington, Oregon does not have a sales tax.

Lawmakers lax on major revenue source

Considering Washington relies heavily on sales taxes from vehicles, the Legislature is incredibly uninformed.

For example, a sales tax on Oregon and Alaska businesses and consumers will discourage commerce in Washington and threaten the livelihood of the state’s businesses and will worsen the state’s already-weak jobs situation.

Secondly, when buyers stop shopping in Washington, state businesses will pay reduced B&O taxes to the state.

A new tax will especially impact the sale of big-ticket items. Ask any Washington commercial-truck dealer if they have out-of-state customers. Their answer will be yes.

They’re already concerned their sales are down. What’s worse, relatively few have the cash flow to advertise now – ask any media advertising salesperson. During good times, the auto sector is the No.1 advertiser on radio and television. Even Honda dealers have had to lay off employees. (Disclosure: I’m very familiar with the auto sector. My firm formerly had auto dealer clients who advertised on radio and television. A regional truck dealer has an ad on this site.)

Out-of-state businesses come to Washington to buy fleets of trucks because the quantity and selection is superior. Privately, one dealer confides that some buyers travel 3,000 miles to Washington to buy commercial trucks. So they patiently wait for the economy to improve.

However, it’s also well-known that Washington state car buyers journey to Idaho for savings and to avoid paying high sales taxes by buying from Dave Smith Motors – a high-volume car dealer who advertises heavily in an in-your-face style on Seattle radio stations.

The dealer’s slogan: “Serving the Pacific Northwest and Beyond Since 1965,” and on its Web site it boldly states: “We cannot sell any NEW vehicle for Export or Resale.” The hint being that Washington car dealers could get a better deal in Idaho, too.

In fact, the dealer is the world’s largest Dodge, Chrysler and Jeep dealer, and is a leader in sales of General Motors cars and trucks.

The sales tax for the metropolitan King and Pierce counties is 9.6 percent.  Idaho only charges a 6 percent sales tax, which is shared with cities’ coffers, and the state affords a lower cost of doing business.

Bad planning

Moreover, the budget ramifications for Washington state:

• No B&O taxes are collected
• Reduced sales taxes because after making a purchase, motorists drive over the state line to Washington where they can register their vehicles in less-populated counties to save 1 to 3 percent on their vehicle’s sales tax.

The Legislature is behaving unproductively in another matter. Adversely affecting dealers and consumers, alike, the Senate wants to halt another major car-buying incentive – the long-time tax deduction for used-car trade-ins. In other words, the Senate wants to tax motorists at both ends – when buying and when selling a vehicle.

Incredibly, lawmakers insist on staying in the liquor business – is liquor a core state service? The state employs 1500 liquor employees and taxpayers are saddled with their costly pensions.

At best, the surcharge on car insurance is disingenuous. “Perhaps if the Legislature hadn’t raided the account the funds would be available for the use intended – preventing auto theft,” says Jason Mercier of Washington Policy Center.

FYI, if it weren’t for the tireless efforts of Mr. Mercier, much of the Legislature’s chicanery would not come to light. It’s a full-time job making sure there’s transparency. Many lawmakers are doing their best to make certain Washington does not have an open government.

The Legislature also wants to heavily tax candy – in the aggregate, a big state employer. Simply consider just one heritage state company, Brown and Haley, an employer of 250 workers but is in the midst of financial woes even without a burdensome sales tax.

Other sin taxes include a 500 percent increase on cigars, but gives favored documented treatment to Tribal smoke shops.

Let’s not forget the stifling new tax on bottled water.

Some lawmakers want to double the death tax.

And others want to triple the tax on gasoline and diesel as hazardous or toxic but they won’t use the revenue for badly needed road repairs or construction. Meantime, Washingtonians will undoubtedly pay even more for fuel.

Meantime, nothing has been done about the state’s bloated payroll and associated costs. Ask any employer if they are able to pay 88 percent of health insurance, or if their retirement plans can compete with the state pension system. The answer will be no. Don’t forget the Legislature is tardy in plans to fund $7.9 billion in retiree health benefits.

That sums up the debacle pretty well – continued spending, boundless chicanery in violating transparency standards, unsatisfactory performance audits, mismanagement and stifling taxes. Nothing has been accomplished that will strengthen the state’s economy or create jobs. In fact, it can be easily concluded that the 2010 legislative session has resulted in a sharp decline of voters’ economic and political freedoms.

From the Coach’s Corner, to stay informed, here are other sites you’ll find helpful:

• Washington Policy Center, www.washingtonpolicy.org
•  Enterprise Washington, www.enterprisewashington.org
• Association of Washington Business, www.awb.org
• Washington State Auditor’s Office, www.sao.wa.gov
• Washington Votes, www.washingtonvotes.org

March 2, 2010

You can expect to see a lot more videos in your e-mail. Marketers plan a major expansion in their use of videos in e-mails, according to a report in Website Magazine. The magazine quotes a study by Getresponse.com.

The Getresponse suvey indicates 80 percent of respondents will insert videos in 2010. In 2009, only 15.7 percent used videos.

Sixty-five percent of e-mail marketers feel that such videos are effective. Sixty-four percent of such marketers now using videos say videos result in more sales.

Common uses of videos: Customer testimonials, product demos, product offers, and training courses.

You can see the report at GetResponse.

From the Coach’s Corner, I don’t believe the study by Gertresponse is too self-serving. It’s getting more and more challenging to reach consumers. Note this column: Of Interest to Web Publishers, Videos Continue Surge in Popularity.

For an overview of how to overcome consumer overload, see: Marketing Strategies to Cut Through the Clutter.

For information and advertising, consumers apparently trust their local newspaper Web sites over any others, according to a new comScore marketing study. It shows 57 percent of respondents prefer newspaper sites for trusted content – local information and ads.

Here’s another stunning statistic: The sales conversion rate was a whopping 82 percent.

In essence, the survey revealed that the advertisers’ selection of the medium in which to advertise is the most important consideration – not the creative. Forty percent “…agreed that their opinion of online advertising is influenced by the type of website on which the ad appears.”

This was especially true for reaching upscale consumers. Sixty-three percent of high-income households and 60 percent of college-educated shoppers trusted newspaper sites more than others.

True, the study was funded by the Newspaper Association of America (NAA), but the study was conducted by the authoritative comScore. It was conducted in Nov. 2009 and released in Feb. 2010.

In fact, comScore reports newspaper sites were the No. 1 preference for all types of content, including classified ads.

Thirty-six percent of the 3,050 respondents said newspaper sites were trusted for ads compared to 23 percent who preferred television station Web sites, and 12 percent for portals.

No. 1 newspaper rankings also included:

• Local information – 29 percent
• Local sports – 27 percent
• Local entertainment – 26 percent
• Local classifieds – 39 percent

The criterions for ads: timeliness, credibility and relevance.

Incidentally, the results favoring newspaper sites were true for all ages. In the 18-34 demographic, newspaper sites beat television 35 percent to 22 percent. The spread was even greater between newspapers and portals, 35 percent to 11 percent.

That’s heartening news for traditional journalists who have long worried about the trends in declining newspaper readerships, especially among the young.

NAA has 2,000 member newspapers nationwide.

To see the study – Site Matters: The Value of Local Newspaper Web Sites.

No surprises here, but I disagree with the findings in one regard. Any media Web site with a strong local news image will equal the clout of a newspaper site. 

The study is welcome news for me as a business-performance consultant. I’ve long advised clients about two basic tenants in marketing and sales success:

• First impressions are important.
• The medium success is synonymous with the message.

In other words, news and public affairs usually attract the most civic-minded consumers with above-average net worth. But I would include radio and TV sites with newspapers in this regard.

And remember the adage, “Birds of a feather, flock together.” For Web sites, be selective to whom you sell ads. If you’re an advertiser, check the quality of the other advertisers before you buy.

From the Coach’s Corner, in 2009 I wrote about the importance of developing trust with consumers in my case study of a failed financial institution, Venture Bank, in Washington state.

My thesis: Eclectic branding does not work when you want someone to trust you with their money. 

The moral: Somehow, smart consumers inherently know that when branding doesn’t convey trust and value, it’s a reflection of poor management decisions.

See: “Marketing: Why One Bank Fails, Another Succeeds.”

In trying to solve a $2.8 billion budget shortfall, Washington state lawmakers have been debating the wrong issues. Instead of debating whether to increase the sales tax or to eliminate tax exemptions for industries, lawmakers would better serve voters if they dealt with the core issue.

The core issue: Developing a healthy economic climate with public policies that help – not hinder creation of private-sector jobs.

Most businesses have had to significantly cut payroll – 175,000 jobs were lost in two years. However, instead of being good stewards of taxpayer assets, many public officials are frantically looking to spend money and generate more tax revenue. The only jobs the state helps to create are government jobs that exacerbate the economic climate.

Worse, state pensions are 74 percent higher per person compared to the private sector. And the Legislature has failed to fund at least $7.9 billion in healthcare and pension liabilities – a financial time bomb set to explode.

Thirty percent or more of your business headaches are caused by onerous government regulations and taxes.

These and countless other issues hurt the economy.

However, there is hope. At the grass roots level, Enterprise Washington (EW) is an organization effectively clearing the air. They know a strong economy will create jobs in a way that helps the environment.

In essence, the EW folks understand the core issue, and they are recruiting and helping business-friendly candidates get elected to office. I recently met with the group’s principles at their Issaquah office and walked away with favorable impressions. And what’s really neat is that they understand it’s important to be open-minded. They recruit both Democrats and Republicans.

It was refreshing to hear the insights of EW President Erin McCallum.

My sense is that you’ll want to know more about EW. Here are Ms. McCallum’s answers to my questions:

Q: What is your success rate?

A: Since EW’s formation in 2007, there are seven more business-friendly lawmakers in Olympia.  

Five GOP include: Sen. Randi Becker, Reps. Kevin Parker, Jan Angel, Bruce Dammeier and Terry Nealey.

Two Democrats: Reps. Reuven Carlyle and Scott White.

EW was instrumental in five of the seven victories (Becker, Parker, Angel, Nealey and Carlyle).  

In each of these races, EW either identified and recruited the business person or ran a significant independent expenditure campaign that helped educate voters about the candidate who was the stronger champion of the economy and the health and sustainability of Washington’s private sector.

Q: How would you describe your mission?

A: Recruiting, training and electing business-minded state lawmakers. 

Q: You have different organizations under your wing?  

A: Yes we do. EW, the mission is described above and EW’s Jobs PAC which is a 527 political action committee.   There is also a legally separate 501 (C)(3), charitable organization called Business Institute of Washington. It is an educational resource for our communities that helps Washingtonians gain a stronger understanding of the significant role our lawmakers play in establishing laws that govern our state. 

Q: Please describe how they’re structured cohesively.

A: EW is legally organized to influence the outcome of elections in key districts (C-6, membership organization, and a 527 political action committee). EW has established these separate entities to accommodate the different reporting requirements for various political expenditures.

As a result of the economic downturn and what a majority of the public sees as government spending run amok, the current political climate is favorable for pro-business/anti-tax candidates.  Business has an opportunity to capitalize on this shifting political climate during the 2010 election cycle.

Q: Briefly, what is the history of your organization?

A: EW grew out of an old business political action committee, United for Washington. We developed our business model using best practices from business communities in other states, and taking examples from currently successful players in Washington state politics. 

Our research has unveiled that successful special interest groups in Washington state have not been friendly to private sector business for some time.

Q: How would you describe the state of politics in Washington?

A: The political stage was set many years ago for what’s happening in Olympia and state government today. For decades, special interest groups outside of the business community have worked tirelessly in recruiting candidates who will champion their issues and helped get them elected.  Our state’s current political climate augurs opportunity for pro-business candidates – Democrat and Republican, alike. And with the new top two primary, business-friendly Democrats are viable again.

Here are some examples of how other special interest groups operate in our state, and how the private sector community has assisted in bringing them to power:  

Organized labor has done an incredible job in helping to elect candidates to champion their issues in Olympia. Organized labor, with SEIU largely driving the effort, has been effective in politics by winning one race at a time. Their efforts have paid dividends for them on shaping public policy.

Other special interest groups such as the Trial Lawyer Bar, WEA, Firefighters, etc., make sure contributions get funneled to close races, usually to Democrat candidates. When business contributes to both parties (often to gain political access) a significant portion of contributions made to Democrat leaders are transferred to competitive races and used against pro-business candidates. Organized labor has been able to rely on a pro-union majority in both the House and Senate to protect its interests.

Q: How many members or supporters does your organization have?

A: EW currently has about 250 members representing businesses from all across the state in a broad range of industries. This year, we are currently in a drive to double our membership.  Any of you who are business owners and who care about the future of our state, please join us by visiting www.enterprisewashington.org and become a member.

Q: A lot of voters think of business-oriented people as Republicans-only, but you have the vision to be nonpartisan.  Please describe how and why you decided on the nonpartisan approach.

A: Business issues do not necessarily cut clearly across political party lines. Also, given our state’s demographics and increase in population, we recognize that voters in this state are fiscally conservative, socially progressive. With Washington state’s two political parties tending to lean more to the extreme we look for balance and middle ground.

Q: What’s your criterion for a political candidate? 

A: Our state is quite diverse, so the ideal candidate can vary quite a lot depending on the location of the district. Having said that we are looking for business people, both employers and more likely employees, who have strong experience in the private sector and can bring their expertise to the state lawmaking process.

Q: What’s on tap for your association?

A: We are in the midst of a $1.6 million campaign for Washington’s private sector and invite everyone in business in this state to get engaged through EW membership. Unlike public employee unions that can collect political contributions through the monthly dues process, EW must appeal to the greater business community, those who have the most at stake, to make our programs succeed.

Please go to www.enterprisewashington.org and become a member today! Through membership, you can help elect more business minded state lawmakers who will understand and support public policy that supports private sector jobs.

Q: What else would you like to add?  

A: The business community has a choice to make: either get involved and help elect more business friendly lawmakers or face steeply higher taxes. EW is the only organization in Washington state that is tackling the political landscape with the goal of making significant positive changes to the makeup of our state legislature.  Democracy is not a spectator sport so join EW today! Having strong elected lawmakers who understand that it’s the private sector that creates jobs and turn builds healthy and happy communities.

From the Coach’s Corner, here’s more on upcoming state-government developments:

To identify state efficiencies and savings, Washington State Auditor Brian Sonntag has announced his performance audit work plan.

Each hour, it seems, news headlines are published about patents. Normally, patent headlines are a sign of business friction as the case with Xerox vs. Google and Yahoo, and Apple vs. Nokia.

So it’s extraordinary for adversaries such as Google and Yahoo to be on the same side. Xerox filed a patent lawsuit naming the two search giants alleging they are violating automatic query and information patents, according to InformationWeek.

It’s also rare when you can spot a positive news headline regarding patents. Note this PC World headline:  “Microsoft, Amazon Strike Patent Licensing Deal.”  This means Microsoft and Amazon.com will each tap into the other company’s technology. As part of the arrangement, Microsoft will receive payments from Amazon.com.

Entrepreneurs are well-advised to consider ways to avoid legal entanglements over their inventions and intellectual property.

Here’s an example: Apple vs. Nokia. In this case, the U.S. International Trade Commission is investigating.

Sounds serious, doesn’t it – it’s time to turn to a noted patent attorney for an explanation of this case.

“It looks like Apple and Nokia are using their patent portfolios to obtain some leverage from each other,” says Adam L.K. Philipp, founder of the Axios Law firm (www.axioslaw.com).  “Generally, two firms of this size may posture, but then settle, especially as their respective patent portfolios are so large.”

He speaks from experience. He says his current clients  include:  “RealNetworks, Wetpaint, PhotoBucket (formerly Ontela), SEOmoz, Appature, Winshuttle, Kashless, HealthUnity, AirSplat.com, and many more.”

China makes a lot of intellectual property headlines. Is China getting a bad rap?

“China is becoming an intellectual property powerhouse; a bit like a very large high college football player.  Young and inexperienced, but having a lot of potential and with the right seasoning has the ability to go to the NFL,” explains the Seattle attorney.

“Generally I tell my clients that it is not enough to have a business partner or intellectual property in China, you want to give your business partner the tools to use by filing for intellectual property protection in China,” adds Mr. Philipp.

He says entrepreneurs face five common problems in intellectual property (IP). They include:

1. Waiting too long to seek IP protection
2. Talking about their technology before securing protection
3. Spending too little money on IP protection
4. Spending too much money on IP protection
5. Spending money on the wrong IP protection

“From a business perspective it is always important to think of intellectual property as providing a business with business tools,” he says. “By simply understanding IP better, businesses can make better decisions on a cost/benefit basis of how or if to proceed with IP protection.”

And he believes patents are needed for five reasons:

1. To obtain exclusivity in their market (barriers to entry for others).  Also to satisfy investors.
2. To obtain licensing revenue
3. For bragging rights (PR)
4. For cross-licensing opportunities
5. All of the above

How about trademarks?

“Securing the investment in a brand and the associated goodwill,” explains Mr. Philipp. “It is expensive and distracting to entrepreneurs and their customers to change a brand.  Registering a trademark can help to avoid that.”

He warns about the importance of copyrights. “Registering copyrights allows a rights hold much easier and cheaper enforcement options.  In particular access to statutory damages that can be quite effective in copyright litigation.”

He’s knowledgeable in the core issues in business-method patents, such as Bilski. Bilski was a decision by the United States Court of Appeals for the Federal Circuit.

What’s Bilsky all about?

“The core issues revolve around the United States’ policy of protecting innovation; and deciding what types of innovations are worthy of patent protection,” Mr. Philipp says. “If is it merely a method of doing business, is that the kind of thing our Founding Fathers really wanted enshrined in the Constitution as protectable?”

Verbiage regarding patents, obviously, is technical, such as the machine or transformation test.

“That a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing’,” he explains. “Currently, the U.S. Patent and Trademark Office merely requires a recitation of a particular computer performing the process for software inventions.”

OK, the bottom-line: When does he recommend inventors seek a patent attorney?

“As soon as they decide to build a business around their idea(s),” he concludes. “But that does not mean that they need to start filing for protection right away, rather that they should be informed and strategic about how they allocate their budget.”

Take it from me, pay heed to this information if you want to avoid unnecessary headaches.

From the Coach’s Corner, on a lighter note courtesy of Forbes, here are images of The Kookiest Inventions. (I haven’t verified whether they have made money. )