The Dumb Get Dumber

OK, class. Here is today’s business case study:

The Setting:

You own a 100+ year-old business with great historical significance. Unfortunately, your industry is in serious decline, brought on by matters both outside of your own control and matters under your domain that you, frankly, screwed up over the decades. Whereas you once dominated your field, you are now nothing more than an afterthought to the general public, described by some as an anachronism of another age. As a result, your enterprise is on the brink of total failure. In fact, you are currently in formal bankruptcy proceedings.

At your height, you were open for business six months out of the year, with crowds swelling your facility. Fast forward to the present day, and we find that you are operational for just twenty days a year. Even then, very few people show up, and those that do are the retired, the elderly and various incarnations of the derelict class. It’s not a pretty sight.

What keeps you going -- albeit by the slimmest of threads – is a single day within that twenty; a day that serves as the proverbial exception to the rule. By a beneficial fluke, that one spring time afternoon gathers you international attention and serves as an annual regional celebration for those within a ten-hour drive of your front door. And celebrate they do, over 100,000 typically show up for each edition.

Best of all; these attendees are the very target demographic that hold the key to any chance of your future survival – they are young, educated, energetic, and with enough discretionary dollars in their pockets that they will even toss you $50 apiece to walk through your gate for this grand party. Wow!

More people show up on this single day than on the other nineteen combined. They also spend more money – by a huge factor – than the other nineteen combined. Treat them right, and most of them will be back again next year. Hopefully, a smaller percentage of them will even make a return visit on one of those slower days on your calendar.

The Challenge:

What single action might this business take as a mean of leveraging this particular asset in its quest to improve it chances of survival?

Current Management’s Response:

Make a policy decision that is so utterly stupid that it greatly diminishes their desire to attend your annual event.

The Result:

2009 attendance was down dramatically, resulting in significant financial pain for the business. Goodwill has been seriously damaged, thus leaving open the possibility that this customer segment is permanently lost.

Analysis:

So what is the real world identity behind this fiasco? The answer: Magna Entertainment Corporation and its handling of Preakness Day at its Baltimore area thoroughbred horse racing track, Pimlico.

What was the action Magna initiated that resulted in this unfortunate turn of events? The answer: a new admission policy that forbids the entry of coolers and alcohol into the infield party on Preakness Day.

What was Magna’s rationale behind this decision? The answer: The infield party on Preakness Day had become an orgy of drunken excess that was creating a public safety issue.

What was the public’s reaction? The answer: “Let me get this straight: this event serves as my yearly reunion with friends and you won’t let me bring in a cooler after I pay $50 to stand in a field? We're outta here. There's a rock festival up the road”

The Conclusion:

Chalk this up as yet another example of a business – and an industry – that hasn’t a clue.

May it serve as a lesson to NYRA @ Saratoga .....

Update--the official attendance figures over recent years:

Year - Attendance

2009 - 77,850
2008 - 112,222
2007 - 121,263
2006 - 118,402
2005 - 115,318
2004 - 112,668
2003 - 100,268
2002 - 101,138
2001 - 104,454




.

Psssst: Who's Your Dealer?

OK, I need some help here on this:

Question: How is cutting the size of their dealer networks benefiting GM and Chrysler in theor quest to rise from the quicksand?

Granted, there might be too many dealers out there, with some of them encountering profitability concerns in these tough times. But that should be a problem for the dealers, not for the manufacturers. After all, these dealers are independent businesses, buying inventory from Detroit with the hope of re-selling it in their market and servicing their customer base. They are not on GM or Chrysler’s payroll.

Follow-up Question: If two Chrysler dealers are currently operating within a certain geographic range – each with 6 sales people – that makes for a total of twelve of them hawking this brand of vehicles. Knowing that the cost of this sales force doesn’t isn’t borne by Chrysler, isn’t having twelve sales people more advantageous than having six? Not to mention two separate ad budgets being put to work instead of one.

Finally: Doesn’t a smaller franchise network generally lower the value of the franchisor?


Just wondering…

The future of radio?

"AM/FM radio has about five good years left, if that. And what we consider to be radio today will be on the Internet. And the Internet websites will be media stations."

- Michael Harrison; founder and publisher of Talkers magazine, the talk-radio industry's trade journal


It sure is refreshing to find someone in this guy's position who's not denying reality for the sake of acting as his industry's cheerleader.

Random thought of the day

Can someone tell me how I can become a Conceptual Founder, too?

Oh, that's right: this is the kind of post I'm supposed to do with Twitter, not here. Sorry...

Stop SPAM, save the planet?

I'm certainly not one to defend that scourge called SPAM by any means. But get a load of this news:


The next time you're deleting a piece of spam, consider this: Not only are the unwanted e-mails wasting your time, they're also costing the planet.

That's because spam has a sizable carbon footprint -- using 33 billion kilowatt hours (KWh) each year, according to a report by security vendor McAfee.

But McAfee also said that if every inbox were protected by a state-of-the-art spam filter, the energy required to deal with spam could be reduced by 75 percent -- the equivalent of taking 2.3 million cars off the road.

That's because filters use less energy than humans do. Humans delete each spam individually, taking up to three seconds per spam e-mail. Machines are more efficient and filters account for only about 16 percent of annual spam energy use, the report found.


Have you ever read a bigger piece of BS than this?

Naturally, McAfee sells the aforementioned filters - and publsihed the 'news' story.

Boycott McAfee. Because stupidity sucks.


KR


.

Tax Day Tea Party: it's all somebody's fault!

A popular theory in economic sociology goes like this: if an American civil war were to arise between the Haves and the Have-Nots, the middle class would side with the former because that is where its ambitions lie. In other words, as long as that carrot is being dangled out there on a stick, Joe Everyman will elect to reach for the rabbit food as opposed to beating the crap out of the guy who’s teasing him with the promise of riches.

Which brings us to this week’s Tax Day Tea Party rallies across the country. Spurred on by MSNBC reporter Rick Santelli’s on-air Rant of the Yearagainst … something or other … on the floor of the Chicago Exchange, these events were themed to showcase the rising dissatisfaction against … something or other … on the part of the US taxpayer. Not quite on point, for sure, for the point is elusive in these complex times.

Sure, we all know there’s a big mess out there --- but that is where the consensus ends and the blame game begins. The Haves (aka Larry Kudlow’s darling Investor Class) point their shaky finger, naturally, at the usual suspects: it’s all Barney Frank’s fault because he’s, well; Barney Frank! Or in a larger sense, the blame lies in the lap of ‘government’; with this week’s spin used by the right wing media mouthpieces being ‘financial industry misregulation.’

Mr. Santelli, to his credit, certainly isn’t one of those robot wingnuts. He understands markets, he can state a case using good old fashioned cause & effect logic and he is passionate in his beliefs without wrapping them around a cheap agenda. His daily segments have long been enjoyed in this corner.

But it’s when Santelli’s concern with the moral hazard aspect of possible homeowner mortgage relief (admittedly a legitimate conversation to be having) suddenly devolves into a scene where he’s leading a cheerleading section of bond option traders and saying “This is America” that has some of us scratching our heads. Quick: when was the last time you were out slugging down some brewskis with a bond option trader?

Let’s summarize what we think is their point, using a School Daze analogy:

Thirty years of influence pedaling by the local dope dealer industry has given the mischievous school kids at Rock & Roll High School both unlimited signed hallway passes to go smoke crack in the boys’ room (think: Glass-Segall) and has laid off all the truant officers so the kids can move that party to unsupervised latchkey kids’ homes (think: hedge funds and mortgage backed securities). The result: a few months later we find that we have a bunch of junkie kids running wild and constantly breaking into their neighbors’ houses: all hell is breaking loose in the ‘burbs. The citizenry suddenly wants a new school administration and it wants those truant officers back on the job; pronto.

But Citizen Santelli sees moral hazard here. After all, some kids took advantage of those loosey-goosey school policies and didn’t raise holy heck. Why, there are even rumors of a couple youngsters using that freedom to volunteer at the Senior Center! Why punish them because of the deeds of a few?

Memo to Santelli: did you miss the part about “all hell is breaking loose in the ‘burbs?”

What the counter argument solution to the problem posed by this admittedly-weak little scenario would be from the Tea Party bunch is unclear. Would they argue that a hands-off approach will eventually result in the junkie kids self-policing, growing up and becoming solid members of the community some day soon? Or is this just creating an exciting new market opportunity for entrepreneurial pursuit: gated communities, private armies and fortress-like home security systems? Who knows.

Indeed, finger pointing is a tricky thing. If you’re blaming the ‘big government’ scary monster, does that mean you’re sticking up for the AIG/Countrywide/CitiGroup/etc Den of Thieves? The concise argument has yet to be fine-tuned by the Haves to the liking of their traditional middle class allies, who (so far) are sitting on the sidelines and looking for a scorecard to help figure out this who-what-why of this Hindenburg.

Hence the fizzle factor of the Tea Party thing: it really wasn’t that big a success now, was it? For sure, the Limbaughs and O’Reillys latched on to the sound bite aspect of The Rant – of which I would wager Mr Santelli isn’t all that happy about. That, in turn, has rallied the usual suspects to the cause: the guys that spend all day flipping between sports talk and Fox News for their daily info fixes. You know who we’re talking about here: they can give you the career stats on a 5th-round linebacker prospect from Texas Tech but couldn’t begin to explain what a credit default swap is. But they think Ann Coulter is kinda hot, in a trashy sort of way. But that’s about all they’ve got so far.

Equally off-message, unorganized and inactive is the wild card of the political middle class; the left wing. Not since the Seattle uprising of a decade ago has this mishmash of various hopes and fears pulled together to make a stink. So where are they now that we need them, even if only for the street theater? Given the times, that question just might be the biggest mystery of all.

Meanwhile, the Have Nots show no interest in playing a starring (or even supporting) role in the Revolution. Hell; there’s not really even a Revolution going on anyways! Instead, they seem content either making it happen in the Underground Economy or flushing the pain away with regular fixes of dope, violence, junk food or network television.

They remain, as is usually the case in American history, invisible and politically orphaned.


.

Who needs work? Now we can just bang on our drums all day

During the course of this past weekend, I completed the following commercial transactions:

Self serve grocery checkout
Self serve gas fill-up on the Turnpike
ATM cash withdrawal
Online e-book purchase & delivery
Online train ticket purchase (w/future kiosk pickup)
Online event purchase & ticket printout

All six have one thing in common: none involved my interacting with another human being. All six would have involved one a half-generation ago; a couple would have required such just a few years back.

My reason for keeping track of the obvious must be the fact that I just completed reading (for at least the third time) the 1995 book The End of Work. Here, author Jeremy Rifkin makes us face the fact that technology and its inherent productivity gains are resulting in an inevitable decline of jobs, many of which will not be offset by knowledge / service sector replacements. The ramifications of this sea change are immense --– read the book for some insight.

Certainly, a good deal of Rifkin’s reality check has been cloaked by the cheap & easy credit(primarily thru home equity) Ponzi Economy of the past twenty-five years. But, as we are now aware, that rooster has come home to rest…

Interrupting that train of thought was a conversation on immigration policy -- brought about, naturally, by Friday’s insanity in Binghamton. My traveling companion -- who for some reason is of the Republican persuasion – wondered why his party (the Country Club wing of it, at least) tended to favor large immigration numbers. This, he felt, was contrary to their general inclination of ‘exclusive membership’ standards.

The answer (to me, at least) is obvious: more immigrants result in cheaper labor and ever-rising housing demand. Right there are two of the main stars of any GOP fantasy dream.


.

Write a check; ensure integrity!

Campaign elections are expensive; the bills keep rolling in even after Election Day. It's tough enough squeezing people for money before the race, darn near impossible to do it after. So, a good campaign needs a GIMMICK!

Jim Tedisco has one to get you to write him one more check. Here we go, direct from his campaign website:

I need your support now more than ever! Will you donate today to protect the integrity of this election?

With your help we will fight to ensure that every legal vote is counted fairly and accurately. This election deserves to be decided by the voters – the voice of the people. We cannot let the democratic process fall victim to carelessness or dirty tricks.

You can help us today by making a donation to the Tedisco Ballot Integrity Fund. Your financial support of this fund will give us the resources to protect the integrity of this election. When the votes are counted, I firmly believe we will win and we will send a strong conservative voice to Washington.

Didn't John Sweeney make his name within the GOP ensuring some ballot integrity down in Florida in 2000? You remember Congressman Kickass, right? Isn't this old hand available to help Jimmy Disco in his time of need?

Oh, that's right: Mr Sweeney is a bit pre-occupied this week with his own problems.

Prediction: Tedisco vs Murphy on March 31

Prediction:

Murphy by 5%

No science; no polling; no man-on-the-street interviews.

Just a gut feeling ....


POST-ELECTION UPDATE

Mouth: You kinda blew that one, Gut ole boy.

Gut: Whatcha mean? Murphy's ahead.

Mouth: Not by no five percent, he isn't.

Gut: Five percent? I said five votes!

Mouth: Yeah, right. Tell ya what -- next time we try to forecast an election, we'll get Brains and Muscles involved.