Social Networking for Business Doesn’t Work: Have a Plan, Dont Work the Room, Be Selective, Focus on Few, Follow-Up…

Networking Doesn’t Work: Working the virtual and physical room– shaking dozens of hands, having endless small-chat conversations, collecting hundreds of business cards… Forget it: It’s not the silver bullet, re-think your networking.

Most people don’t have a real network… most people don’t know how to network… most people don’t follow up… most people think growing their network list is networking. Most are on the hunt to get more business cards, collect more LinkedIn connections, Facebook friends… accumulate all that data… and for Zilch?

According to Eric V. Holtzclaw; number one rule is to stop thinking about networking as ‘networking’. Networking should not be about meeting as many people as possible in as short amount of time. There is no glory in returning to the office with a handful of business cards if nothing comes from your efforts, and there is no need to continually add to your LinkedIn connections unless you can establish a meaningful relationship with each new connections. Instead, think about value; what value can you provide to each of your contacts and each of them to you… what resource or information can you share… it’s a two-way street

Have a Plan: Who, What, Where, How… Be Selective: Pick events, social media, online communities that are right for you and your business and meet quality people who are interesting and interested…

Focus on Only a Few: Pick one or two people at any given event, and spends your time really getting to know them, and potentially connecting with the rest of their networks. Seeking to establish a quality relationship with a few people provides the greatest payback for your efforts…

It’s About Follow-Up: There’s a philosophy that says if you don’t follow-up with someone within 10 days after meeting them it was never meant to happen… follow-up determines the people who are really serious about establishing a relationship and those that just connecting for the sake of connecting…

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In the article Why Networking Doesn’t Work by Dave Clarke writes: The first and biggest mistake that many people make is they dive headlong into the activity of networking without really understanding the meaning of networking. They attend group meetings swapping business cards with everyone and broadcasting their message… they join online networks, and putting together a fancy profile, and broadcast some more. After a while this doesn’t work, and many conclude that networking doesn’t work.

Some think they may need to do something differently, so they get some training– how to work the room and how to craft the perfect elevator pitch. Then, they do the rounds again and wait for the avalanche of new clients to contact them by email, phone, Twitter, LinkedIn, Facebook… Again; this doesn’t work and a few more conclude that networking doesn’t work. But, it doesn’t have to be that way! Here are a few tips:

  • Don’t just dive in: Like anything worthwhile, networking takes time and application. You need to be committed to investing the time to develop relationships and create a      network of advocates… Don’t expect to walk into a room of strangers or simply post a profile online and come away with business– it just doesn’t work like that!
  • Build networking into your overall marketing and business plans: It pays to plan ahead; if you don’t know what you are trying to achieve with your networking, then how can others help you? Plan your activities and look for advocates… the more you niche your target market(s), the better… identify other people or categories likely to have access to your target market(s).
  • Understand how to explain what you do: When asked; what do you do? Present your proposition confidently and consistently– your target market, problems you solve and your stories. People do not buy what you do; they buy into why you do it. It’s your passion and enthusiasm that engages and not a clever elevator pitch.
  • Don’t ignore your existing network: The cornerstone of your networking activities should be the people you have worked with or already done business; colleagues,      customers, suppliers… Invest time in these important relationships…
  • Identify who you need to add to your network: If your existing network is not big enough to generate enough word of mouth to achieve your plan then you need to build your network. Ask yourself who else is likely to have access to and influence with your target market(s). Then find where they network and try out those networking groups.
  • Find the networks that suit you: Once you find those networking groups try them out first, then only join the groups that are most productive. People become advocates for those that they know, like, trust…
  • Become an advocate for others, first: Take time to develop the relationships with key members of your network. Become an advocate for them. And, guess what? What goes round comes round. People will eventually become advocates for you, and this is where the networking dividend really pays-off!

In the article Why Networking Doesn’t Work by Maribeth Kuzmeski writes: Networking, according to those who do it successfully (i.e., meaning– they have gained significant new business from the activity of networking) is not about collecting and giving out business cards, and it’s not about finding people who may be good prospects for your business…

Successful networking is about finding and cultivating potential advocates, people who will help you reach your goals, and it’s not about finding your next hot prospect. If you go about networking with an eye toward finding prospects, it’s a lose-lose; you won’t sell them anything and you will turn them-off; guaranteed. But if you go about networking with an eye toward finding and cultivating advocates, you will achieve a totally different result.

An advocate is someone who is already well-connected and may or may not ever become your customer… An advocate might be your neighbor, social media connection, member of your church, college buddy, your non-profit group… A single advocate can bring you multiple customers, while one potential prospect at a networking event will often result in one frustrating experience and zero sales…

So, who do know who might become an advocate? Think about it; who is well-connected in your community, your industry, your company, an existing customer, target market… Think outside the box. Who is in a position to introduce you to potential customers? Make a list of 20 potential advocates. Then, check them out on LinkedIn, Facebook… and decide how you will reach out to them… not to sell them something but simply to get to know them; just connect.

Give them a chance to get to know you. It takes a bit of patience and it most likely will not bring immediate gratification. But if you can find someone to act as your advocate, your efforts will be repaid many times over.

network OrganizationTypesGraphBNAS-Success1In the article When Networking Doesn’t Work: No Value in Just Touching Base by Trent writes: The key lesson that many people miss out on when they try to build and maintain professional connections is that without ‘value’, there is no real connection... Making empty contact doesn’t provide any value for anyone: And, you’re largely wasting your time and theirs… most important, you won’t build anything of value out of it. Instead, seek to make contacts with value; pass along value and you’ll get value in return… Here are a few tactics:

  • Never make contact unless you can contribute something of value: Don’t ask someone you only lightly know to go out for coffee unless you have a genuine purpose in doing so– and saying ‘Hi’ isn’t that purpose. Don’t waste your time, and certainly don’t waste  theirs.
  • Knowledge is often best thing you can offer– so offer it: If you have a useful piece of information that you’re sure someone else could get value out of, share it. By sending along something actually useful, you add value to their lives– and their connection to you becomes stronger because they now see you as more valuable.
  • When you pass along some value, let them know what you’re doing – and also ask about what they’re doing: A quick paragraph saying, what are you up to? And perhaps referencing the last big matter (or event) that you’re aware, which they were involved is a great way to find to keep relationship open and communication flowing.
  • Make mutually beneficial connections whenever possible: If you observe that one person’s need would be met with another person’s assets or skills; connect them together. It only takes you a minute, but if that connection provides mutual value for both parties, you’ll strengthen your relationship to both parties; it’s a win-win-win.
  • Suggest that when they’re in a bind, they should let you know, try to be helpful: Let people know that when they’re having issues, looking for solutions… they should let you know. Even if you can’t help them listening might useful, or you might know someone else who might be helpful. Become a resource…

A fundamental reason that networking doesn’t work is that most people lack a plan. They are not systematic or disciplined about which events they attend, why they attend them, what they are trying to achieve, how they will follow through after the event… According to David Nour; the critical first three areas in which networking fails are; purpose, goals, and plan (PGP)... Networking is not simply a noble exercise, but an important activity to create a preferential competitive advantage and it must not be left to chance…

According to kathleenchester; I rarely see networking work well and the majority of business people typically, only network sporadically (e.g., ‘pitch and run’) and they rarely get many relationships through their networking efforts… Networks should be developed to create strategic relationships… Where you partner and work together on long-term basis, and mutually support each other… Where you leverage each others’ centers of influence and tap into and connect with each others audiences…

According to Randy Gage; the three reasons why network marketing doesn’t work for most people are: 1.) 90% of people don’t follow the system! 2.) 9% of people follow the system but have wrong expectations!  3.) 1% of people follow the system but have poor skill set… According to David Nour; relationship creation alone won’t suffice; regardless of how many cups of coffee or lunch visits you schedule. The savvy professionals find opportunities to monetize their business relationships by bridging their ‘relationship creation’ with ‘relationship capitalization’.

Bridging this gap allows all parties to benefit and share economic value of the relationship. Be creative! It’s not just about how wide your network is, or how deep your network is, but how strong each relationship is…

 

Special Economic Zone–SEZ: Questionable Impact– Substantial Export Gain or Terrible Economic, Social, Environment Loss…

Special Economic Zone (SEZ) is a contained geographic region within a country, adopting liberal laws and economic policies to encourage foreign-invested manufacturing and services for export. They are widely used around the world as part of a country’s overall economic development strategy.

There are over 3500 special economic zones in over 135 countries, accounting for over 70 million direct jobs and over $600 billion of direct trade-related value added within the zones… Unfortunately, despite potentially positive effects of SEZ predicted by economic theory (due to presence of foreign direct investment) and strong convictions by policymakers, there is still lack of rigorous empirical understanding of the extent to which SEZ actually contribute to foreign direct investment (FDI) and how the resulting investment influences the local economy…

The concept of SEZ was largely pioneered by China, wherein the SEZ contributed up to 20% of the total FDI, also the SEZ model was successfully implemented in Poland and Philippines. In the former the SEZ contributed almost 35% of the FDI inflows. Shenzhen in China has been at the helm of rapid economic development, after growing by a staggering 28% for the last 25 years… China’s chief special economic zones are Shenzhen, Zhuhai, Shantou, Xiamen cities and the Hainan Province; and encompass more than 100 national economic and technological development zones, 15 national bonded areas, 14 border trade and co-operation regions in the broadest sense…

Successful SEZ have developed small villages into major industrialized centers, supporting populations of 10 to 20 million citizens with jobs… provided host countries with major economic growth… investors with substantial financial returns… stimulated emerging market developments with socially responsible projects… However, as evidence over last 10 years has shown, this single-minded pursuit of growth has lowered the efficiency and effectiveness of economic policies, besides incurring huge resource and environmental costs.

Globally the SEZ record is poor; only a handful of SEZs, of the hundreds that exist, have generated substantial exports, along with significant domestic spin-offs or technology upgrades. For each successful Shannon (Ireland) or Shenzhen (China), there are 10 failures– in the Philippines, Malaysia, Brazil, Mexico, Colombia, Sri Lanka, Bangladesh, India… The formation of such zones has also been criticized from a number of different perspectives, for example; potentially displaces populations, relaxation of environment and occupation health and safety laws…

The objectives for SEZs are usually explained as: (a) creating additional economic activity; (b) promoting exports of goods and services; (c) promoting investment from domestic and foreign sources; (d) creating employment opportunities; (e) developing infrastructure facilities…

Bottom-line the SEZ promise is; increased export and FDI (foreign direct investments) enabling increased public and private partnership and ultimately resulting in development of world-class infrastructure, boost economic growth, greater employment, increased standard of living…

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In the article What Is Special Economic Zone? by Megan Murray writes: Many countries employ their own variations of these special enclaves, and use their own terminology to describe them. For example, Mexico refers to its zones as ‘maquiladora’, Cameroon, Ghana, and Jordan have ‘industrial free zone’, Philippines calls its economic zone ‘special export processing zones’, and Russia has ‘free economic zone’...

Despite the differences in nomenclature, each SEZ operates to increase export trade throughout its respective region by offering special export trade incentives to stimulate local and foreign investment within the region… Despite the vast number of SEZs across the globe, the majority of SEZs are concentrated in just a few countries: China has been the most successful in implementing SEZs and the most profitable in their operation.

Most of China’s SEZs are very large and specialize in a narrow range of products and services– those most conducive to a mass-production environment; notably labor intensive, assembly oriented products… The regulatory procedures of SEZs have changed since original inception. Some incentives offered by many SEZ programs include; provisions for commercial and professional activities, allow zone developers to supply utilities to the zone, allow for private instead of public development, and relax minimum export requirements, labor and environmental laws…

There is no one best way to establish an effective and financially profitable SEZ. Many countries have developed their own unique trade units to capitalize on their own laws, customs, resources and trade practices. Some of these developments have been successful, like the Shenzhen Village SEZ in China. However, others like those in Namibia have failed because they were not financially sustainable or social, environmental, political costs impeded their overall success.

These successful and unsuccessful SEZs should serve as models for host countries seeking to develop new SEZs. The complexities involved with development and management of SEZ require that a host country thoroughly understand all risks and rewards before implementation. SEZs can provide great investment benefits by luring companies with tax incentives and new technologies, but some of these benefits might now be outweighed by the economic, social, and environmental costs…

In the article Special Economic Zones by Thomas Farole,  Gokhan  Akinci write: For countries as diverse as China and Mauritius; special economic zones (SEZs) have been a powerful tool to attract foreign investment, promote export-oriented growth, and generate employment; but for many others the results have been less than encouraging. While the benefits and limitations of zones will no doubt continue to be debated, what is clear is policymakers are increasingly attracted to them as an instrument of trade, investment, industrial, and spatial policy.

Since the mid 1980s, the number of newly established zones has grown rapidly in almost all regions, with dramatic growth in developing countries. In parallel with this growth and in the evolving context of global trade and investment, zones are also undergoing significant change in both their form and function with traditional export processing zones (EPZs) are increasingly giving way to larger and more flexible SEZ model. This new context will bring significant opportunities for developing countries to take advantage of SEZs, but will also raise new challenges to their successful design and implementation…

In the article Special Economic Zones: What Have We Learned? by Thomas Farole writes: It’s more than 50 years since the establishment of the first modern special economic zones, but it’s only relatively recently, particularly since the 1990s, that their popularity as a policy instrument has taken off. The International Labor Organization‘s database of special economic zones reported 176 zones in 47 countries in 1986; by 2006 this had risen to 3,500 zones in 130 countries.

Traditional export-processing zones (EPZs) were designed to attract investment by enabling countries to better exploit a key source of comparative advantage – low-cost labor – which was otherwise under-utilized because of low-levels of domestic investment and barriers (e.g., regulatory, infrastructure…) preventing foreign direct investment (FDI). These EPZs have operated under simple principles, for example: Allow investors to import and export free of duties and exchange controls; Facilitate licensing and other regulatory processes, which usually frees firms from obligations to pay corporate taxes, VAT, or other local taxes…

Indeed, recent research shows that on a global basis infrastructure reliability has a strong association with special economic zone success, while incentives have no measurable effect. In contrast, the generally unsuccessful experience of zones to date highlights some important lessons in zone development, for example:

  • It’s important to separate political support from political objectives in zone projects. Projects must be carefully designed based on clear strategic plans– the commercial case must be there.
  • Success is almost fully entwined with the competitiveness of the national economy and the national investment environment. Many special economic zones are operating in an environment of poor national competitiveness. And regardless of what is done inside zones, they face challenges in linking the zones and global markets, including critical infrastructure challenges– ports, roads, electricity…
  • Clear and transparent legal and regulatory framework codifies the project strategy and establishes the ‘rules of the game’ for all stakeholders, but de facto implementation is of equal importance. In many special economic zones, the authority responsible for developing, promoting, regulating the project; lacks the resources, capacity, authority to carry out its mandate.

For economic zones to be a success in the long-term, they must contribute to structural transformation of the country’s economy, including; diversification, economic upgrade… Indeed, this is the classic case of China’s special economic zones, which were used as a vehicle to test liberal economic reforms, and introduce them to the wider economy in a gradual way

One of the main differences between zone projects that have been successful and sustainable and those that have either failed to take off or have become stagnant enclaves is the degree to which they have been integrated in the broader economic policy framework of the country…

According to Linda Ensor; a bold paradigm shift is required in the design of the planned special economic zones (SEZs), if they are to contribute to economic growth and job creation. Special economic zones must be special; they need to offer investors a better value proposition… SEZs must offer tailored solutions to problems faced by businesses trying to compete and establish zones, such that labor-intensive countries can compete globally…

Achieving success with zone projects in the future will require adopting a more flexible approach to using the instruments of special economic zones in the most effective way to make the most of the country’s sources of comparative advantage. Most fundamentally this requires a change in mindset away from traditional reliance on fiscal incentives and wage restraint, and instead focus on facilitating a more effective business environment to foster company-level competitiveness, local economic integration, innovation, and social and environmental sustainability…

 

Erecting Paywall for Restricted Access to Website Content: Important for Revenue– Hardly Winning Strategy for Growth…

Paywall is a system that prevents Internet users from accessing webpage content (most notably news content and scholarly publications) without a paid subscription… It’s an arrangement whereby access is restricted to users who have paid to subscribe to the site… it’s similar to a firewall in that it prevents users from accessing certain webpage content without permission…

Hitting paywall is one of those things that are immediately followed by a groan, a tear, a stiff drink or less commonly, the temptation to physically harm your computer… Everyone has experienced it; some sites implement hard paywall while others deploy soft paywall: Hard paywall content restrictions are very stringent allowing either no access or minimal access to free content. A soft paywall, on the other hand, provides access to free content as means for encouraging users to subscribe to the website services…

According to Steve Outing; the word paywall as applied to websites sucks; it’s a negative word. If a consumer hears that their favorite site is putting up a paywall, the response is highly likely to be: Avoid! Paywall systems are being developed with increased regularity for content-focused websites to provide means for generating subscription revenue. Some websites have metered paywall that allows visitors to view limited number of pages for free, then once this allotment of page views has been exceeded, a paywall is erected with the request to subscribe in order to have further access to the website…

According to some experts; many website that have paywall are really just using a donation model, since it’s so easy to avoid paying and still have access, and that’s not far removed from membership models. Where a growing numbers of websites are getting online users to pay for access to their content as members or non-members, for example; become a member and access everything that the site has to offer or stay non-member and access some limited number of articles per week/month/year…

According to experts, we should eliminate the word paywall, and instead promote the memberships concept. The reality is that most active websites have a large group of loyal free users (i.e., non-members) and a smaller group of paying users (i.e., members), and their objective should be to convert the non-members to members and not alienate them by erecting a paywall… 

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In the article How Paywall Works by Cristen Conger writes: The debate over free versus paid online content rages on. Before delving into the great paywall debate, it helps to understand what exactly those virtual gates are. While we might like to envision these subscription portals as being heavily guarded by Internet gnomes that deflect non-paying IP addresses by brandishing tiny swords; paywall sadly aren’t all that magical. Paywall are website coding systems that allow only authenticated users to pass through into the land of free access.

For idea of how it works, consider how a couple of college students figured out how to hop over a magazine’s paywall by fiddling with its website coding, which, the students noted, is publicly accessible, so it’s not like they were breaking in through some sort of backdoor. The paywall consisted of an encryption file and an authentication file that prompts the user to log-in, and then verify whether the user has paid for access. There are different paywall systems, including; metered, freemium (which allow some, but not all, articles for free), and full restriction… and each of these involves different types of encryption, authentication and data tracking…

However, there are some very clever people who can quickly figure out how to hop right over that golden gate… Just like the college  students who found a crack in the paywall, there are folks that can quickly tinker with the website’s JavaScript, CSS and URLs and passed right on through to the protected content without having to pay a penny. Also, Internet browser add-ons have even been developed to automatically crack paywall… In fact, some websites intentionally make themselves porous, leaving side doors open via Google, Facebook and Twitter…

In the article Don’t Build a Paywall, Create a Velvet Rope Instead by Mathew Ingram writes: Is there a way for a site to generate revenue without a paywall? Yes: They could try to think about developing a relationship with readers that is based on mutual exchange of benefits, and let the monetization flow from that instead of erecting a paywall…

Think of the relationship with readers as being about more than money, and then let monetization flow out of that relationship, rather than the reverse. So instead of just hitting a paywall after a certain number of stories, readers who contributed comments or moderated the comments of others– or provided other forms of useful data or labor– might get a benefit that others wouldn’t, for example; access to certain content, invitation to a real-world event… In fact, it may turn out that readers might actually volunteer to pay, because it’s no longer seen as a duty but something that’s useful to them.

According to Charlie Beckett; this relationship model is focused on encouraging readers to see themselves as members of an exclusive club that has certain perks or rewards, so it’s a lot more like a ‘velvet rope’ than a paywall. The outcome is arguably the same as a paywall, but it starts with the benefits instead of starting with the turnstile and a request for money. But too many sites seem to be ignoring the velvet-rope option and simply throwing up paywall out of desperation…

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In the article How Paywall is Evolving by Felix Salmon writes: So, what is the future of paywall? According to MediaPass; it will be a mix of free and paywall content, although that mix will differ from site-to-site… crucially, one of the biggest lessons we’ve learned is that it’s a mistake– at least from a purely revenue perspective-– to treat all visitors equally. Some readers have a much greater propensity to pay than others, while also allowing the vast majority of visitors– the ones who will never pay you anything– to still consume your content and view the associated ads.  For instance, it’s often easier to persuade people to subscribe to sports content than to entertainment content, even as it’s easier to sell ads against entertainment content than against sports content.

So it does make sense to keep entertainment free, and put some kind of paywall around sports… And certainly it seems to be a good idea to offer a range of subscription lengths, priced so that there’s a strong incentive for the longer-dated annual subscription, even if that means a substantially lower rate on a per-month basis. It’s not all that hard to tell who’s likely to subscribe, and who isn’t. For example, print subscribers are much more likely to be willing to pay for a digital subscription than those that don’t…

In general, the trick is to get as many subscribers as you can– because once a person subscribes, they generally turn out to be surprisingly loyal and price-inelastic… And then, for the 90% of readers who don’t  subscribe, it’s a good idea to find content for them, too. The paywall shouldn’t just be a ‘pay here or get nothing’ option: the ‘no thanks’ button should take visitors to valuable free content… What’s impossible to calculate, of course, is the long-term opportunity cost of driving away people who want to read your content but aren’t willing to pay…

According to MediaPass; in most cases the act of putting up paywall is essentially harvesting revenue from loyal long-term audience– people who have read your content as a habit that they don’t want to give up. That’s fine, as short-term means of maximizing revenues, but its dangerous strategy long-term for getting new loyal readers…

Paywall is controversial with partisans arguing over effectiveness of paywall in generating revenue, and the effect on media in general. Critics of paywall include; many business people and academics, such as; Jay Rosen, media professor, Howard Owens, journalist, Matthew Ingram, media analyst,… Those who see potential in paywall include; Warren Buffett, investor, Gordon Crovitz, publisher, Rupert Murdoch, media mogul,…

Some have changed their opinions of paywall: Felix Salmon of Reuters was initially outspoken skeptic of paywall, but recently expressed the opinion that they could be effective. Clay Shirky, media theorist, was a skeptic of paywall but wrote; news media should turn to their most loyal readers for income, via a digital subscription services. In the paywall debate there are those who see paywall as ‘sandbag strategy’; a strategy which may help increase revenue in the short-term, but not a strategy that will foster future growth…

However, a non-debatable strategy is to think ‘mobile’ and fast. According to The ComScore 2013 Marketplace Outlook Report; one of every three minutes of digital time is now spent with smart phone, tablet– or both, at once. Mobile platforms require entirely new types of interactive content and transaction services to satisfy consumers, who want to get news quickly, locate information rapidly and share; words, pictures, videos… on demand.

According to Jacqui Cheng writes: The latest data from Nielsen has found from its 52-country survey that there are indeed opportunities to make money on content, but users can be choosy about what kinds of things they’re willing to pay. The survey, included more than 27,000 customers globally, found that consumers are (naturally) more inclined to keep already free things free.

Still, things that people pay for offline, such as; movies, music, games… were the same things that people were most willing to pay for (or consider paying for) online. This isn’t a huge surprise since; music, movies, games… are already flourishing mediums on the Internet. What didn’t fare so well were; blogs, user-generated video, talk radio, podcasts, social communities… which were all on the bottom of the list… It’s worth noting, too, that different demographics within the population are more open to paying for content than others.

Nielsen noted in its report that younger consumers are more willing to pay for most types of content, which is surprising given the popular perception that young people are more likely to pirate content; many of these so-called ‘digital natives’ know how to end-run pay sites…

Also, as it turns out, it’s the older users who are more resistant to paying for content online… So as current generations of users age, it’s more likely that they will be more willing to accept the paywall and pay for content that they deem valuable…

Perils of Sitting-Standing While Working– Standing vs. Sitting: Human Body is Designed to Stand– Sitting All Day is Deadly…

Sitting vs. Standing: Work cubicles are where brains go to die and every day they willingly sitting down in the death chair. Here’s the kicker: You’ll be repeating it ad infinitum for the foreseeable future. Melodramatic? Hardly. Is it a problem you can solve? Absolutely; if you find the courage to rise-up…

According to Kate Taylor; it’s hardly breaking news that sitting at work all day is bad for you. Sitting for hours may mean you’ll increase your chances of dying younger than your standing counterparts– no matter how much you work out. On the other hand, if you cut the time you spend parked behind your desk daily, you may extend your life up to three years…

The research suggests that after an hour or more of sitting, the production of enzymes that burn fat in the body declines by as much as 90%. Extended sitting, they add, slows the body’s metabolism of glucose and lowers the levels of good (HDL) cholesterol in the blood. Those are risk factors toward developing heart disease and Type 2 diabetes.

According to Dr. Toni Yancey; the science is still evolving, but we believe that sitting is harmful in itself… However, even with these grim facts, not many people are really willing to stand up and do something about it… Sloth is rampant, for example; a typical car-driving, television-watching cubicle slave would have to walk an extra 19km a day to match the physical-activity levels of the few remaining people who  still live as hunter-gatherers…

Health care professionals have been nagging people for decades to do more exercise. However, what is surprising is that prolonged periods of inactivity are bad regardless of how much time you also spend on officially approved high-impact stuff like jogging or pounding treadmills in the gym: The latest research suggests that constant low-level activity is also needed. This can be so low-level that you might not think of it as activity at all. Even just standing up counts, for it invokes muscles that sitting does not…

On the other hand and even more disturbing are some health warnings about working while standing… According to some health care literature; the optimal work arrangement is ‘frequently’ changing the working position– from sitting to standing and back…

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In the article Stand-Up While You Read This! by Olivia Judson writes: Your chair is your enemy: It doesn’t matter if you go running every morning, or you’re a regular at the gym. If you spend most of the rest of the day sitting– in your car, your office chair, on your sofa at home– you are putting yourself at increased risk of obesity, diabetes, heart disease, variety of cancers and early death. In other words, irrespective of whether you exercise vigorously, sitting for long periods is bad for you.

That, at least, is the conclusion of several recent studies. Indeed, if you consider only healthy people who exercise regularly, those who sit the most during the rest of the day have larger waists and worse profiles of blood pressure and blood sugar than those who sit less. Among people who sit in front of the television for more than three hours each day, those who exercise are as fat as those who don’t: Sitting a lot appears to offset some of the benefits of jogging a lot. So what’s wrong with sitting? Sitting is one of the most passive things you can do. You burn more energy by chewing gum or fidgeting than you do sitting still in a chair.

Compared to sitting, standing in one place is hard work. To stand, you have to tense your leg muscles, and engage the muscles of your back and shoulders; while standing, you often shift from leg to leg. All of this burns energy… Some people have advanced radical solutions to the sitting syndrome: Replace your sit-down desk with a stand-up desk, and equip this with a slow treadmill so that you walk while you work… But, whatever you choose, know this: The data are clear; beware of your chair.

In the article Dangers of Sitting at Work and Standing by Bryan Walsh writes: Standing to work has long known to be problematic, it’s more tiring, it dramatically increases the risks of carotid atherosclerosis (nine-fold) because of the additional load on the circulatory system, and it also increases the risks of varicose veins, so standing all day is unhealthy…

According to Alan Hedge; the problem with standing is that when you raise desk height for keyboard/mouse use you need to also raise screen height above the desk or you get neck flexion and other musculoskeletal disorder like carpal tunnel syndrome. In field studies of so-called sit-stand workstations, Hedge has found little evidence of widespread benefits for users… He also notes that the use of stand-up desks tends to rapidly decline after about a month…

Hedge acknowledges that sitting for hours at a time, uninterrupted, is not good: So he advocates a middle way– use a sitting desk with proper ergonomic posture, but make sure that about every 20 minutes you stand up and move around for a brief period of time: Research shows that you don’t need to do vigorous exercise (e.g., jumping jacks) to get the benefits; just walking around is sufficient.

So build in a pattern of creating greater movement variety in the workplace (e.g., walk to a printer, water fountain, stand for a meeting, take the stairs, walk around the floor, park farther away from the building each day)…

In the article Standing Up for Work Can Improve Your Health and Productivity by Denise Reynolds RD writes: Research has shown that people who stand at work tend to be much healthier than those who sit. Extended periods of sitting, thus being sedentary, can lead to an increased risk for Type 2 diabetes and cardiovascular disease.

One study found that a woman’s risk of developing metabolic syndrome increased 26% for every extra hour of sitting. Prolonged sitting in an upright position can place strain on the back resulting in chronic pain. Blood clots are another risk of being inactive… Periods of standing through-out the day can improve circulation, muscle tone and vitality. The increased weight on the skeleton is good for maintaining bone strength. You may even lose weight. Standing for just two hours during an average workday can burn an extra 280 calories. In one year, that could potentially provide a weight loss of around 20 pounds…

Getting out of your chair can also offer psychological and productivity benefits. Standing while you work improves concentration by increasing blood flow to the brain. Many who stand say– their thinking is clearer, improved ability to focus on problems, and some report feelings of improved self-esteem and social development…

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In the article He Who Sits the Most Dies the Soonest by Neil Wagner writes: A study of more than 200,000 Australians adds to the growing body of evidence that people who sit the most die the soonest. The study’s simple message is that spending more time standing and less time sitting prolongs life. The current study took a more direct approach, looking at the relationship of total daily sitting time to the likelihood of dying within the next three years, seeking to put a number on just how harmful prolonged sitting is.

Its most striking finding was that people who sat more than 11 hours a day had a 40% higher risk of dying in next three years than people who sat less than four hours a day. This was after adjustment for factors such as; age, weight, physical activity and general health status, all of which affect the death risk. It also found a clear dose-response effect: The more people sat the higher their risk of death… In other words, people still need to exercise, but it’s important also, to spend less time sitting…

Stand up, office workers of the world! You have nothing to lose but your chairs. And even if they are made of– supple executive leather or high-tech Aeron mesh, those chairs are lethal. According to Drake Bennett; excessive sitting is slowly killing you; this may sound like hyperbole: But it’s not.

A study found that men who sit for more than six hours of their leisure time each day had a 20% higher death rate than those who sat for three hours or less. The epidemiologist who conducted the study, Alpha Patel, concluded that excessive sitting literally shortens a person’s life by several years.

Another study showed that men who sat for 23 or more hours a week had a 64% greater chance of dying from heart disease than those who sat for 11 hours per week or less. According to Brett & Kate McKay; sitting is the ultimate passive activity; your heart rate, calorie burn, insulin effectiveness, and levels of good cholesterol all drop. Your body also stops producing lipoprotein lipase and other molecules that are only released when you flex your muscles, such as when you are standing and walking.

Add these factors up, and it’s no wonder that those who sit for long periods of time each day have larger waistlines, worse blood sugar, blood pressure profiles, higher risk of heart disease, than who sit less. And, if you think you’re off the hook because you do a bout of vigorous exercise each day, you’re not. Studies have shown that exercise does not counteract the negative effects of sitting. It’s like thinking you can snack Twinkies all day, and then offset that by running for an hour…

According to Patrick J. Skerrett; the human body is designed to stand, not sit…  According to Mark Sisson; we aren’t designed to sit in chairs all day… sitting weakens our muscles, especially in the legs and the hips… According to Dr. Buckley; people are sitting at work, sitting in the car and then sitting in front of the television… your metabolic rate crashes to an absolute minimum– it’s not natural: Humans are designed to stand up and keep moving. Although, if sitting is deadly then standing all day can also be hard on the body: It puts strain on the heart and increase the likelihood of atherosclerosis and varicose veins…

According to Alan Hedge; standing all day is really not good… So what is a person to do? According to most ergonomists; the watchword these days is postural rotation: Sit a little, stand a little, then repeat…

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The Change Curve– Predictable Pattern of Emotion-Reaction While in Change or Transition: Modeling Change Behavior…

The Change Curve: Change has an important impact on people in terms of what they do, how they do it, where they do it or, in some cases, if they will even be needed to do it… the change curve, or transition curve, helps us to understand the emotions that people may go through when changing… When faced with change in the workplace or in their personal lives, most people go through a certain range of reactions.

The concept of the change curve is used to explain the typical order of people’s reaction to change. By observing employees closely, you can tell how far they have progressed along the change curve. Keep in mind that employees may be at different stages of change curve at different times…

The idea of a change curve has been around for a very long time. Everyone goes through it: the highs and lows of dealing with change. However, the change curve is nothing more than human response to change, and it’s based on a combination of psychological models including; Kurt Lewin’s 1952 three-phase model of social change (i.e., Unfreeze–Change–Refreeze) and Elisabeth Kubler-Ross’s Five Stages of Grief model that explains people’s reaction to death. Over years, many organizational and behavioral psychologists explored, expanded, and adapted the change curve to reflect the emotional reactions of people to transitions and change.

One of the most famous articles written on the subject is The Death Valley of Change by P. David Elrod II and Donald D. Tippett in 2002, which provides experimental verification of the model, and how leaders can apply it to organizations in transition. There are numerous versions of the change curve in existence but no matter which curve you use the basic principle is the same; people follow predictable patterns of psychological reactions to change over time.

A nuance of the model is that within the change curve, you can have people who view any kind of change either; positively or negatively, depending upon the individual. However, at an aggregate, using the change curve as a guide in transformation planning, organization change, merger and acquisition… it can help to better understand people’s reaction, uncover barriers, recommend actions to overcome resistance fasterThe Kubler-Ross’ original five stages are; denial, anger, bargaining, depression and acceptance– and represented pictorially in graph:

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In the article Stages of the Change Curve by Sidharth Thakur writes: Although there is no dearth of change models, one of the simplest and most practical change model identifies just four stages of the change curve; denial, resistance, exploration, commitment. Despite simplicity, it has gained wide acceptance in the field of change management. Managers and employees find it easier to understand and relate to these simple four stages of the change process…

As soon as a change is proposed the typical reaction is full of stress and negative emotions that rise to a peak before the change can actually get acceptance, and then normalcy is restored. It’s important for management to understand the change curve and reactions that can be seen during the different stages of the change process.

Change is never smooth, easy or quick… and since it involves many uncertainties and turbulence it can only be represented graphically as nonlinear: The change curve is best represented as a type of ‘U’; plotting ‘time’ on X-axis and ’emotional intensity’ on Y-axis. The change process can be very painful, for example; at the peak of the change curve there is a slow down in employee productivity resulting from heightened stress and uncertainty.

But, as team members begins to realize the importance-benefits of proposed change than their acceptance of this new norm– reverses the emotional upheaval, and work productivity gets back on track and aligned with the new normal. The typical graphical representation  of the change curve’s four stages; denial, resistance, exploration, commitment is shown as follows:

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  • Denial: For most people– in denial– change is not easy to accept and they try to ignore thinking and talking about it… Since change is interpreted as uncertainty, people shift their attention to the past and familiar feelings that make them feel secure. This shift causes a dip in morale of team members. At this stage team leaders must help team members to understand the objectives, process, and how it affects them. Keeping the team informed about what is happening helps to build a sense of security.
  • Resistance: Resistance to change begins as people realize that the change is actually taking place and there is no way to avoid it. During this stage of the change curve feelings like; anger, self-doubt, fear and anxiety can build, which can significantly stagger the progress of the change process… In addition, it can cause morale and productivity to take a nosedive and some team members may show their resistance to the change by being uncooperative. In these situations, management leader must be proactive; listen to the concerns and demystify the change…
  • Exploration: This stage of the change curve is the exploration phase where the team members become a part of the change. This is where people start acting and learning new ways so as to constructively contribute towards change. A fresh wave of thinking where people understand the rationality of the change and the importance of their role in the change process. It’s mostly an exploratory stage where people are experimenting with the change to determine their positioning… Leaders must establish meaningful roles for team members so that they can actively participate in the change.
  • Commitment: Commitment is the final stage of the change curve as productivity and emotional normalcy is restored. The team members begin to feel more in control and committed to the new roles and realities– they are engaged, co-operative, and work actively for the new normal. During this phase it’s important that management leaders acknowledge-reward team members for their contributions; keeping them motivated and committed.

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Business can’t change if people don’t changeGetting sustainable business results means changing people’s behavior, actions and attitude to get things done in more effective ways. According to Trilogy; while there’s no magic wand to achieve change, there is a formula for businesses to achieve success; first, start with attitude, since it sets the tone for the entire process.

If you don’t have the right attitude about change, then the business will not achieve sustainable results… Next, multiply attitude by the components of talent, skills, and knowledge, which when combined will reach goals: The result is a positive behavioral change that then leads to sustainable results… 

Change is a common thread that runs thru all businesses regardless of size, industry, age… The world is changing fast and as such, organizations must change quickly too. Organizations that handle change will thrive, whilst those that don’t will struggle to survive. The concept of change is familiar in most businesses, but how they manage it (and how successful they are at it) varies enormously depending on leadership, nature of the change, and people involved in the change…

The change curve illustrates the typical emotions and reactions that people go through during change process. However, when people know that change is a transition to a new normal, it can empower them to be proactive and take control so that the change process is a positive experience and they get a sense of achievement and enhanced self-esteem… The change curve model shows how people can react when they are involved in managing business or personal change, especially when they are not in control of the change or the transition…

The best way to manage change is to create it: undoubtedly it’s the best change model of all. This is all fine and good, but how can I use the change curve? Here are a few pointers:

First, use it to understand that negative emotions during change are normal and, most of the time, they are transient (i.e. they will pass). This is very helpful in supporting yourself or others during change, especially if the change is well outside your comfort zone.

Second, use it to show empathy and communication with people going thru change, for example; some people get stuck in the negative emotions or they feel like a victim and that, in the longer run, will be counter-productive and self-hurting. Whereas by taking control and understanding the change curve process people can be motivated and become proactive in moving quickly to the positive states shown on the change curve.

Third, use it for feedback and learning by checking periodically where people are on the change curve and how they are moving along it (or not). This can help people to develop or maintain their perspective and, to some extent, de-personalize the process they are going through, and thus reduce the intensity of any negative emotions they are feeling. Also, it facilitates the planning of positive actions to accelerate progress for integration of new behavior, habit…

Change is a common thread that runs through all businesses regardless of size, industry… So, two key points: 1. The change curve summaries typical reactions when people change direction or when change is forced upon them. 2. When change is owned and initiated by people it can avoid negative emotions and enjoy positive emotions, which provides a great sense of achievement…

 

Rethink the Social Contract– Government, Corporation, People: Reforming the Ties-That-Bind or Just an Empty Concept…

Social Contract: Society is indeed a contract… between those who are living, those who are dead, and those who are to be born… by Edmund Burke (1792).

Social contracts play an important role in defining the reciprocal rights, obligations, and responsibilities between government, corporations, people… Social contract is a theory of social order that was popular in the seventeenth and eighteenth centuries, although the idea goes back to Plato…

Social contract theory is associated with modern moral and political theory and was given its first full exposition and defense by Thomas Hobbes. After Hobbes, John Locke and Jean-Jacques Rousseau are the best known proponents of this enormously influential theory, which has been one of the most dominant theories within moral and political theory throughout the history of the modern West…

Some experts says that a new framework is now needed to redefine the changing relationship between corporations and the other players in the social contract, for example: First, the purpose of corporations must be restated as more than just serving shareholder interests. Secondly, corporations must take a long-term view of wealth creation, rather than concentrating on short-term profits. Third, corporations must recognize the need to operate in partnerships with government and civil society…

According to Dr. JJ Irani; the future will belong to those corporations that build win-win partnerships with shareholders, employees and community groups… According to some experts; social contract is a fiction. It doesn’t exist in any manner whatsoever… there is no contract in the traditional sense… There is no consent either implied or expressed. No signatures, no consideration, nothing that would make it a valid contract in any court…

Yet, we all have grown up being fed this idea that we are obligated in some way to obey, no matter how much it infringes on our freedoms… Social contract or not, the fact is that not near enough people question the behavior of government and corporations… According to Allen White; it’s time to rewrite the social contract that has existed for centuries among– business, citizens, government. Yet, how to rewrite it?

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In the article Social Contract Theories in Business by Scott Thompson writes: The social contract is a concept in philosophy of ethics and political science that has more recently been applied to the study of business ethics. According to this theory, valid and universally applicable moral rules can be determined by asking what rules people would voluntarily make if there were no rules... For example, not everyone would agree on the best type of music or the best books, so these cannot legitimately be the subject of universal moral rules. However, everyone would agree to outlaw theft, fraud, murder… so these can be.

The social contract is an unwritten and strictly hypothetical agreement not to violate moral rules. All members of society are said to agree to this contract simply by participating in society… There are three mainstream theories of business ethics; stockholder theory, stakeholder theory, social contract theory: The stockholder theory holds that a company has no ethical obligations to society other than to earn the largest possible profit for its stockholders or owners within the limits of business ethics and the law.

The stakeholder theory holds that a company is morally obligated to all parties with a stake in the outcome of its activities, including; the employees, the community and the environment, as well as stockholders… Ethical decisions in business can be strongly affected by which theory of business ethics conforms to their decision-making process. For example, if a small business receives a buyout offer from a major company, stockholder theory would support whichever decision was most profitable to the owner; whereas, the stakeholder theory would require the owner to consider the impact of selling the company on the employees and community; and, the social contract theory would require the owner to consider the impact of the decision on society as a whole, not just those immediately affected…

Social contract theory is a controversial concept in the study of business ethics, because it’s tied in to broader political issues about which many people disagree… People who believe strongly in the laissez-faire model of capitalism usually argue that companies benefit society by creating wealth, providing services and employing people.

According to this view, companies can do most good-by concentrating on making profits rather than on difficult and subjective ethical concerns. People who believe in the concept of corporate social responsibility argue that companies receive substantial benefits from society and should reciprocate by acting in the common interest...

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In the article The Biggest Contract by Ian Davis writes: The great, long-running debate about business’s role in society is caught between two contrasting and tired ideological positions. On one side of the debate are those who argue that (i.e., to borrow Milton Friedman’s phrase) the business of business is business; on this view, social issues are peripheral to the challenges of corporate management. And, the sole legitimate purpose of business is to create shareholder value.

On the other side are the proponents of corporate social responsibility (CSR), a rapidly growing rather fuzzy movement encompassing both; companies that already claim to practice CSR, and skeptical campaign groups arguing they need to go further in mitigating their social impacts. As other regions of the world move towards the shareholder-value model, debate between these sides has increasingly taken on global significance; where both perspectives, in different ways, obscure the significance of social issues for business success.

They also caricature, unhelpfully, the contribution of business to social welfare. It’s time for CEOs of corporations to recast the debate and recapture intellectual and moral high ground from their critics. Corporations need to build social issues into their strategy in a way that reflects their actual business importance. They need to articulate corporation’s social contribution to society and define its ultimate purpose in a way that has more subtlety than Friedman’s business of business is business worldview and is less defensive than most current CSR approaches.

In this respect, it can help to view the relationship between government, corporations and society as an implicit social contract; you might say its Jean-Jacques Rousseau’s concept adapted for corporate world with obligations, opportunities, mutual advantage for both sides… More than two centuries ago, Rousseau’s social contract helped to seed the idea among political leaders that they must serve the public good, lest their own legitimacy be threatened. The CEOs of today’s corporations must take the opportunity to restate and reinforce their own social contracts in order to help secure, long-term, the invested resources of their shareholders…

In the article Pros-Cons of Social Contract to Business by Neil Kokemuller writes: The social contract approach to business refers to the strategy a company chooses when it accepts informal expectations from the public and makes social and environmental responsibility important to its business operations. Some companies take on this informal social contract as a point of business differentiation, while others do so to influence potential public scrutiny and backlash for noncompliance.

Meeting informal social responsibility guidelines gives corporations significant protection against possible legal and reputation risks that come with walking an ethical line in business. In the information age, consumer-environmental watch groups are calling attention to  corporations that either; stand out as social responsibility leaders, or fail to deliver on expectations. Failures to participate in your communities treat customers and employees fairly and preserve the environment can all attract negative attention…

More positive benefits of meeting social responsibility expectations from the public can include; stronger customer relationships and better long-term profit potential… Though detractors sometimes question the direct business benefits of social responsibility, one main purpose is to build deep relationships with customers and the community.

Over time, deep connection undoubtedly produces more sales and better profits: This is especially true for small business. Some customers in local markets make it a point to support the local businesses that set standard in meeting social responsibility contracts. However, meeting social contract expectations is expensive; for example, committing to better treatment of employees means that companies must invest in training to build a culture of tolerance and acceptance. It means that companies must give portions of their earned profits to charitable groups, organizations, community programs. On the environmental responsibility front, its expensive to manage recycling programs and to use environmental-friendly materials and business processes…

Another common argument against social responsibility in business is that it distracts companies from a core business pursuit of profits. Detractors suggest that each dollar and time spent focusing on social responsibility is time-money not on product research, development, marketing or other profit-generating activities… Ultimately, the question is balance; where is the balance between the corporations’ social and business obligations…

We are entering a new era of cooperation between businesses, government and citizenry, because the ability to address environmental and social problems is increasingly being seen as beyond the reach of any one of these players… According to Allen White; it’s time to rewrite the social contract that has existed for centuries among business, citizens, government… For more than two centuries, the social contract has undergone cycles of definition and redefinition. This has occurred not through formal acts of government, but through evolving norms and expectations of the purpose of business in society…

The tumultuous business environment of the last decade creates a sense of both urgency and opportunity to rethink the social contract. The rising tide of dialogue around business government, and society is symptomatic of the search to define the elements of a new contract responsive to the demands of the coming decades. Trends and vital signs of many of the world’s economic, environmental, and social communities are sending urgent message that wealth disparities, precipitous decline in the quality of ecosystems, and global healthcare are not being corrected at the rate at which they must to avoid a century of instability and strife among nations and cultures.

Neither business nor government nor civil society is capable, by itself, of reversing these perilous trends: The most promising initiatives are built on tri-sectoral partnerships. The conventional definitions of corporate and government purpose are unsuitable to meet the 21st century challenges. Confidence-trust in corporate and government leaders are disturbingly low because of widely held belief that core social values– democracy, stewardship, justice– are being undermined rather than fortified by contemporary corporate and government practices: For this reason, rethinking the social contract remains one of the most urgent imperatives of our time.

According to Thomas A. Kochan; determining where the boundaries are placed becomes an important part of the negotiation of new social contracts… 

According to Carl Ferenbach and Chris Pinney; create the new social contract between– corporations, government, people– that’s equal to the challenges of the global economy, and build a framework that promotes equal justice for all. As Marcus Aurelius said: That which is not good for the bee-hive, cannot be good for the bees

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Pricing Strategies– Think Thru Your Price Model: Change Irrational Guesswork to Rational Analysis and Relevance…

Pricing strategies, price models– One of the secrets to business success is pricing products properly and it’s probably the toughest thing there is to do…. Price correctly and that will enhance how much you sell and create the foundation for a prosperous business. Get your pricing strategy wrong and you may create problems that the business may never be able to overcome.

According to Charles Toftoy; it’s part art and part science– there’s no one surefire, formula-based approach that suits all types of products, businesses, or markets. Pricing usually involves considering certain key factors, including; pinpointing target customers, tracking how much competitors are charging, understanding the relationship between quality and price… The good news is that there’s a great deal of flexibility in how you set your prices, but that’s also the bad news… adopting a better pricing strategy is a key option for staying viable-relevant.

Merely raising prices is not always the answer, especially in a poor economy: Many businesses have been lost sales because they priced themselves out of the marketplace but on the other hand, many businesses and sales staffs leave money on the table because they price too low. One strategy doesn’t fit all– adopting a pricing strategy is a learning curve that can only be mastered by studying the needs and behaviors of customers, competitors, markets…

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In the article Time to Rethink Your Pricing Strategy by Andreas Hinterhuber and Stephan Liozu write: Companies differ substantially in their approach to price setting but most fall into one of three buckets: Cost-based pricing; Competition-based pricing; Customer value-based pricing. According to Warren Buffett; the single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you must have a prayer session before raising the price by 10%, then you’ve got a terrible business. Yet pricing receives scant attention in most companies.

According to Professional Pricing Society; fewer than 5% of Fortune 500 companies have a full-time function dedicated to pricing… According to McKinsey; fewer than 15% of companies do systematic research on this subject… According to Association to Advance Collegiate Schools of Business; only about 9% of business schools teach pricing… This neglect is puzzling, as numerous studies have confirmed; pricing has a substantial and immediate effect on company profitability.

Studies have shown that small variations in price can raise or lower profitability by as much as 20% or 50%. Over the past 18 months, we interviewed 44 managers in 15 U.S. based industrial companies. These companies varied in size from about 50 to more than 2000 employees and dramatically different pricing capabilities. In the course of research, we found that pricing power is not destiny, but a learned behavior.

The companies we found that achieved better pricing all had top managers who championed development of skills in price setting (i.e., price orientation) and price getting (i.e., price realization). Regardless of their industry, the degree to which managers focused on developing these two capabilities correlated to their companies’ success in achieving a better price for their product than their competitors. Without managerial engagement, companies typically use historical heuristics, such as cost information to set prices, and yield too much pricing authority to the sales force.

In the article How to Price Products by Elizabeth Wasserman writes: The first step is to get real clear about what you want to achieve with your pricing strategy: The biggest mistake many businesses make is to believe that price alone drives sales. The ability to sell is what drives sales and that means– the right sales people and adopting the right sales strategy. At the same time, be aware of the risks that accompany making poor pricing decisions.

There are two main pitfalls you can encounter; under pricing and over pricing. According to Laura Willett; many businesses mistakenly under price their products attempting to convince the consumer that their product is the least expensive alternative and hoping to drive volume; but more often than not it’s simply perceived as being– cheap. Remember that consumers want to feel they are getting their money worth (i.e., value) and most are unwilling to purchase from a seller they believe to have less value.

On the flip side, over-pricing a product can be just as detrimental since the buyer is always going to be looking at competitors’ pricing… There are many methods available to determine the right price, but successful firms know that the key factor to consider is always the customer– first. The more you know about your customer, the better you’ll be able to provide what they value and the more you’ll be able to set your price higher… know the segments you’re targeting, and price accordingly…

The key is to be brutally honest in your evaluation: One size does not fit all. You can only go so far by pricing based on a fixed markup from cost. The price should vary depending on a number of factors including, for example: What the market is willing to pay. How the brand is viewed in the market. What competitors charge. The estimated volume-quantity you can sell. But as important, you must constantly review cost and continuously monitor price and the underlying profitability…

Remember: Listen to customers. Keep an eye on competitors. Have an action plan in place… Be relentless in managing pricing; how you set prices may very well be difference between success and failure of the business.

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In the article Pricing Strategy by Scott Allen writes: The most difficult yet most important issue in business is pricing– how much to charge for product, service… Pricing is tricky, but you’re certainly entitled to make a fair profit and even a substantial one, if you create value for customers. But remember, something is ultimately worth only what someone is willing to pay for it…

While there is no one single right way to determine  pricing strategy, fortunately there are some guidelines that will help with the decision. Here are some basic factors that should be considered:

  • Positioning: How are you positioning in the market? Is pricing going to be a key part of that positioning? The pricing has to be consistent with positioning. People really do hold strongly to the idea that you get what you pay for.
  • Demand Curve: How will pricing affect demand? You must do some basic market research to find this out, even if it’s informal. Get a good sample of people to answer a simple questionnaire, asking them: Would you buy this product/service at X price? Y price? Z price?
  • Cost: Calculate the fixed and variable costs associated with the product, service… determine the cost of goods, fixed overhead… Remember that your gross margin (price minus cost of goods) has to amply cover your fixed overhead in order to turn a profit…
  • Environmental factors: Are there any legal or other constraints on your pricing? For example, for doctor’s insurance companies and Medicare will only reimburse a certain price… Also, what possible actions might competitors take?  Find out what external factors may affect pricing.

The next step is to determine pricing objectives. What are you trying to accomplish with pricing?

  • Short-term profit maximization: This approach is common in companies that are bootstrapping, as cash flow is the overriding consideration. It’s also common among smaller companies hoping to attract venture funding by demonstrating profitability as soon as possible.
  • Short-term revenue maximization: This approach seeks to maximize long-term profits by increasing market share and lowering costs through economy of scale. For a well-funded company or a newly public company, revenues are considered more important than profits in building investor confidence.
  • Maximize quantity: There are a couple of possible reasons to choose this strategy. It may be to focus on reducing long-term costs by achieving economies of scale. Or it may be to maximize market penetration– particularly appropriate when you expect to have a lot repeat customers…
  • Maximize profit margin: This strategy is most appropriate when the number of sales is either expected to be very low or sporadic and unpredictable.
  • Differentiation: At one extreme being the low-cost leader is a form of differentiation from the competition. At the other end, a high price signals high quality and/or a high level of service…
  • Growth: In growth situations you must be flexible in pricing, such that– all costs are covered and the business can still sustaining the growth trajectory…

Once you’ve considered the various factors involved and determined your objectives for the pricing strategy, here are four basic ways to calculate prices:

  • Cost-plus pricing: Set the price with the production cost, including; cost of goods, fixed costs… plus a certain profit margin. So long as you have costs calculated correctly and accurately predicted sales volume, you will always be operating at a profit.
  • Value-based pricing: Price based on value created for the customer. This is usually the most profitable form of pricing, if you can achieve it. The most extreme variation on this is pay for performance pricing, in which you charge on a variable scale according to the results achieved.
  • Psychological pricing: Ultimately, you must take into consideration the consumer’s  perception of price, figuring things like: Positioning— If you want to be the low-cost leader, you must be priced lower than your competition. If you want to signal high quality, you should probably be priced higher than most of  your competition. Popular price points– There are certain price points at which customers become much more willing to buy a certain type of product… Fair pricing– Sometimes it simply doesn’t matter what the value of the product is, even if you don’t have any direct competition: There is simply a limit to what customers perceive as fair. A little market testing will help determine the maximum price customers will perceive as fair.

In virtually every facet of business, companies develop strategies based on the truism that customers differ from each other. Diverse customers are courted with a variety of products (e.g., styles, colors, add-ons…), mix of marketing strategies, multiple distribution points… However, when it comes to pricing, companies behave as though customers are identical by just setting single prices. However, an epiphany to better pricing is to understand and actually to embrace the same insight that companies use to create strategies and profit in other areas of their business…

The strategy of pricing involves acknowledging customers have different pricing needs and making efforts to profit from these differences. According to  Mat Marquis; Strategic pricing comes with practice and skills will grow over time. Pricing is a discipline that anyone can learn: But, first and foremost– do customers a favor–  charge  customers what you’re worth that’s proportional to your value  (i.e., don’t over or under price) and you will both be happy…

According to Tejvan Pettinger; optimal pricing strategy will depend on the type of business… For example, for premium brands– cutting price could be perceived as disastrous– as you lose brand image and fail to increase sales… For normal goods, with businesses looking to increase market share and gain more market dominance, it’s more important to offer competitive prices, and using strategies such as; penetration pricing, loss leaders…

According to Nick Wreden; crafting the right strategies will not only strengthen the business, today; but it will also prime it for sustained growth…. Remember the big picture– profitability is not the only prism through which you should view pricing. Other important perspectives include: Impact on customer relationships, impact on the industry…  Also, don’t fight today’s sales wars with yesterday’s pricing strategies– review pricing strategies and models, and make adjustments, now… Pricing is life blood of profitability– it must be monitored, adjusted, kept relevant…

Mobile Commerce, M-Commerce– Age of Consumerism: Fulfilling the Promise–Radical Shift in Thinking…

Mobile Commerce: Mobility is not just a fad– it’s a mega trend, which is driving not just personal but enterprises ways of working… Mobile is not just a channel– it’s a cross-channel experience.

One of the big pitfalls in thinking about mobile commerce is trying to create a stand-alone mobile strategy: Mobile commerce directly links to online and in-store activities; it crosses different locations, touches on point-of-sale, and incorporates search, social media, and other forms of engagement…

Mobile commerce is about more than the device, it’s about the whole experience… Mobile commerce (M-commerce) is the buying and selling of goods and services through wireless handheld devices; smartphone, tablet… The phrase mobile commerce was originally coined in 1997 to mean– the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology. Many choose to think of mobile commerce as meaning– a retail outlet in the customer’s pocket…

According to ‘BI Intelligence’ in January 2013, 29% of mobile users have now made a purchase with their smartphones. Walmart  estimated that 40% of all visits to their Internet shopping site, in December 2012, were from a mobile device. As content delivery over wireless devices becomes faster, more secure, scalable…

There is wide speculation that m-commerce will surpass wire line e-commerce as the method of choice for digital commerce transactions, and the industries that are directly affected by m-commerce include: Financial services; mobile banking, brokerage services… Telecommunications; service changes, bill payment, account reviews… Service/retail; the ability to place and pay for orders on-the-flyInformation services; delivery of financial news, sports figures, traffic updates… According to Juniper Research; mobile-enabled payments will touch a figure of $630 billion by 2014– which translates to 5% of the total e-commerce sales…

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In the article Mobile Commerce Trends for 2013 by nachshon writes: Almost everyone has a smartphone. The amounts of services we hold in our devices are phenomenal, e.g., we can order a cab, check our mail, track our orders, check the stock market and buy anything we need, whether it’s a Starbucks run, or a new iPad, everything can be accessed from our mobiles.

As the world changes, so does our behavior, and with such progress in technology in the last 5 years, we can continue to expect nothing more than progressive services… Our dependence on mobile devices is staggering:

  • 66% of Americans between the ages of 24-35 own a smartphone.
  • 81% of Americans will own smartphones by 2015.
  • By 2015, mobile phones are expected to be used for web access tools more than PC’s.
  • By 2015, 80% (estimated) of handsets will be smartphones, according to Forbes and Gartner.

Mobile Commerce is the newest and fastest growing strand of commerce, more so than e-commerce. Technology advancements are creating newer, smarter and faster ways of shopping. Here are some statistics on changes in m-commerce in 2013:

  • 78% of retailers will invest into mobile commerce.
  • In 2012 alone, over 41% of smart phone users have already made purchases via their mobile. It’s estimated that statistic will almost double in 2014.
  • 62% of shoppers search for deals digitally for half of their shopping trips.
  • 52% of adult mobile owners use their phones while shopping for advice before making a purchase.

Mobile commerce is not just about the transition from devices-tablets to mobile phones, but about change in the direction of consumerism; focus on services and less on devices. The Cloud is considered to be the most revolutionary development in Internet and technology, and the enabler of the mobile commerce revolution. For example:

  • Over 70 billion apps will be downloaded by 2014.
  • 53% of on-the-go audiences are willing to exchange their location in exchange for more relevant content and better information, including mobile deals.

In the article Mobile Sales Explode at Some Commerce Sites by Steve Smith writes: The use of mobile phones and tablets to shop online is increasing dramatically. Surveys report an increase of 5% in mobile visits to study commercial sites in just one month. Yearly, they reported 84% rise in smartphone visits to retail sites and 49% more from tablets.

Statistics show that these mobile visitors weren’t just window shopping either. The physical orders made online in the last year went up more than 100% on smartphones and more than 60% on tablets. With the ever-important back-to-school and holiday shopping seasons fast approaching, brands and retailers can’t afford to miss out on the significant number of shoppers– especially moms– who are relying more heavily on mobile than ever…

In the article Teenage Online Shopping Trends by Marcia Kaplan writes: In addition to moms, one of the demographic that are most responsible for the enormous increase in mobile commerce is teenagers. In a 2013 survey, 79% of teen females and 76% of teen males said that they shop online. And cell phones are the main access to the Internet for 25% of people between the ages of 12 and 17.

The majority of teenagers own mobile devices too; 48% own iPhone and 58% have some type of tablet… Teens are seldom disconnected from their mobile devices so it’s best to customize websites for continual mobile users. Mobile devices are used for browsing, buying, looking for coupons, and checking in with friends to get their views…

In the article Tablets, Smartphones Drive Mobile Commerce by eMarketer writes: Maybe 2012 was the year of mobile after all. U.S. retail m-commerce sales shot up 81% to nearly $25 billion last year, propelled by rapid adoption of tablets and smartphones as shopping devices, according to new estimates by eMarketer.

Mobile devices accounted for 11% of U.S. retail ecommerce sales in 2012; eMarketer estimates that further growth is expected to push mobile sales to 15% share of U.S. retail e-commerce sales this year. M-commerce sales includes; all purchases made via smartphones, tablets and other mobile devices, but excludes; sales of travel and event tickets.

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eMarketer’s m-commerce forecast reflects a confluence of three trends: first, expanding number of smartphone shoppers whose behavior affects commerce in all channels; second, growing number of smartphone buyers who enjoy the immediacy of purchasing through their phone and are expected to generate just over one-third of m-commerce sales this year; and third, the rapid rise in tablet shopping, which will produce the bulk of m-commerce sales over the next four years.

This year, US consumers will spend $24 billion shopping on their tablets, and that figure will nearly double by 2015. M-commerce sales on smartphones are lower and will grow more slowly, reaching $13.44 billion this year and $24.32 billion by 2016. Purchases on other mobile devices, such as e-readers, will continue to make up a small but steady share of the m-commerce pie.

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The rapid rise in m-commerce sales on tablets means that such purchases will account for 9.4% of all retail e-commerce sales this year and 16.9% of the total by 2016. Smartphones, which had a lead due to earlier adoption, will contribute 5.3% of retail e-commerce sales this year, an estimate that will nudge up only slightly through eMarketer’s forecast period.

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eMarketer is relatively distinct and thorough in its methodology for estimating U.S. mobile commerce and retail e-commerce sales. For example; eMarketer forms its forecast thru an analysis of estimates from multiple research firms; estimated mobile sales data from lead retailers; consumer shopping trends on mobile devices, smartphones and tablets; survey and traffic data from multiple research firms; and consumer smartphone-tablet adoption trends.

In this case, eMarketer analyzed more than 120 data sets from dozens of third-party research sources that track commerce sales and consumer behavior– whose figures are each evaluated by eMarketer based on their respective methodologies, definitions and historical accuracy– before forming its forecast.

Mobile commerce is not a new distribution channel, or mobile Internet or substitute for PCs. Rather it’s a new aspect of consumerism and a much more powerful way to speak with consumers…

According to Marty Leestma; unleashing the value of m-commerce requires understanding the role that mobility plays in people’s lives today. That calls for a radical shift in thinking… Instead of improving a product or refining a distribution channel, companies will need to leverage superior consumer insights to develop powerful branded solutions with value outside their traditional markets. They must forge alliances with telecommunications carriers, retailers, entertainment businesses and e-commerce companies that appeal to consumer groups that they target. They will also need to address complex issues of logistics, coordination…

According to Eran Kinsbruner; mobile users expect high quality experiences, performance, usability and accessibility from the mobile devices… In order to be successful in mobile marketing; brands must be able to deliver on expectations– mobile users are less tolerant and much more demanding than desktop users...

According to Jeff Vance; mobile commerce has tons of potential, but like so many high-upside technology trends, e.g., smartphone, tablet, cloud computing, social media… paradigms don’t change on overnight. For example; the m-commerce success story is Asia: In many Asian countries, people have skipped right over the PC era to smartphone-tablet. Thus, any sort of e-commerce in Asia is by definition m-commerce…

Research by Neilson found that both Singapore and Hong Kong are experiencing spikes in their m-commerce, but when you drill into the details m-commerce in Asia looks a heck of a lot like e-commerce elsewhere… Which points to one reason m-commerce is failing to deliver on some of its lofty promises: M-commerce is tracking very closely to the e-commerce version, which means that the essentials of mobile wasn’t a factor when those sites were build.

According to Baymard Institute; after completing the most exhaustive m-commerce usability study done to date, it is easy to understand why some researchers cry out for caution. The study showed a staggering 97% mobile cart abandonment rate and IBM has documented m-commerce conversion rates to be about half of the full-site e-commerce equivalents are seeing.

And, despite the mobile commerce sites of 18 multi-billion dollar businesses, such as; Walmart, Amazon, Avis, United… numerous test consumers were unable to complete their purchase at the majority of the sites they tested. Note the word used is unable, not unwilling. The usability issues were that disruptive– smaller screens and new interaction methods… The m-commerce opportunity exists– and it’s huge– if companies understand consumer groups intimately and develop ubiquitous solutions that recognize the role that mobility plays in consumers’ lives…