Over the last two weeks, I have canvassed a wide variety of media professionals on the state of the local broadcast marketplace. My sample consisted of TV and Radio station sales executives or general managers, local cable players, regional spots mavens, advertising agency media teams, buying services and a few independent media consultants.
The results were interesting but not overly surprising. The only thing that took me by surprise was the wide differences in broadcast and cable performance by region of the country. But, it made sense. There was a direct relationship between unemployment rates in a state and the vibrancy of the media markets within.
In capsule form, the questions asked were:
1) How is your market performing?
2) Why are advertisers holding back if things are soft?
3) Is corporate understanding if things are below budget?
4) Where do you think things will be in your market in six months?
On the broadcast and cable side, the overwhelming majority said that billing is below quota and that the marketplace is fairly to very soft. About 60% said that advertiser business was below expectations so they were not spending. Several stated that automotive was down sharply and attributed some of that to the Japanese Tsunami. Toyota and Honda, major players, have held back, but many felt that before the end of the year billing will pick up smartly. One executive reported that many Mercedes and BMW parts come from Japan and the slowdown there had a ripple effect on the availability of the premier German brands. Hence, less spending for blue chip vehicles.
American companies are doing well right now. As we write, they have a record two trillion dollars on their balance sheets. They continue to not hire aggressively if at all, raises are few and far between, and, other than their commitments to network TV and network cable, they are VERY cautious about advertising commitments.
This held true with my sample. One executive sent me an e-mail stating, “A month to month marketing mentality is taking place locally.” Another a thousand miles away echoed that sentiment by saying “buys are coming in at the last minute. We have scads of inventory so the money is most welcome. But, we cannot plan ahead at all and it is difficult to explain to the bean-counters in New York”. A third said, “Local retailers are scared. We cannot push many for a quarterly commitment. They go month to month.”
National business is very weak. The broadcasters and cable people almost all are below budget with their national projections. An east coast broadcaster with his feet on the ground says his corporate focus is to develop new business locally to offset disappointing national sales.
Radio is suffering pretty much everywhere. Also, scrappy sales teams are bringing in new clients by knocking on lots of doors but the new players tend to be very small players so the labor intensity of making sales goals is very high. A few markets reported sports formats are their bright spot in their radio station group.
How is headquarters reacting? This is a family oriented blog so I will not give verbatims on comments. ☺ Some say that corporate listens politely but then repeats the magic number that they want for the year. A friend told me that she has joined an organization in the last year known for pressuring their sales management. “I had been around for a while and thought how bad can it be? Well, now I know. When I missed 1st quarter, they began sending a jerk in from corporate to observe things. He looks at every expense item and I swear he counts paper clips”. Another told me that if he misses his numbers for the year, “I will be selling shoes by February.” Sales managers say that their local general managers get it but corporate does not. They still prattle on about debt service and shut them down when they try to discuss their local economies.
Regional differences are extraordinary. Right now, North Dakota has the lowest unemployment in the country at 3.2%. My few contacts there reported that things are fine. Local retailers are confident and investing in TV and radio. Citizens do not fret about losing their jobs so they buy new cars, go out to eat, and splurge on new clothes. A similar pattern comes from Nebraska and Oklahoma although not so strongly. An old friend in California who always saw the glass as half full is now a sourpuss. “Business is awful. I am way below budget and know that things will not turn around here soon.”
In Texas, which has been the strongest of the very large states, things are humming along nicely. Most Texans say things will be about the same six months from now but two see chinks in the armor and think the year will finish weaker.
Agency and buying service teams say that they are getting good deals. Most express surprise that the economy has not improved more by now since the 2008-2009 debacle. A few admitted that they are taking savings from a weak broadcast market and doing more in social media and mobile.
How does the future look? Some say it has to get better or work will be intolerable along with corporate pressure. A good friend says, “I have never worked harder. Things look a little better for the next few months but we are running hard to stay even.” The majority says things will be about the same by the end of the year with a few saying that it “will get worse before it gets better”.
Economic indicators continue to be weak. While each market is unique, it appears that most will not see any uptick until the record breaking political spending hits next year. In the battleground states for the Presidency and those with big Senate races, things may be pretty good even if there is no real business recovery. Right now the president’s re-election team is projecting a billion dollars for 2012 for Obama alone.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, July 30, 2011
Monday, July 25, 2011
Make Your Children Wealthy
Urban legend has it that financier Bernard Baruch was playing some form of 1920’s “Trivial Pursuit” in a posh Manhattan apartment. A question was posed to him—“What are the seven wonders of the modern world?” He answered, “I have no idea but I can tell you the 8th—compound interest.” A few years later, Albert Einstein was quoted as saying, “the most powerful force in the universe is compound interest.”
Today, we provide a rather offbeat post aimed at parents and grandparents. It is a ridiculously simple way of transferring substantial assets to your children and grandchildren without setting up elaborate trusts, convoluted wills, or other means that only make the lawyers money.
What I am talking about is giving your children a Roth IRA. A Roth, named after the late Delaware Senator William Roth, is an Individual Retirement Account (IRA) with a twist. If you earn less than $109,000 as a single person or $169,000 for a couple and are under 50, you can put $5,000 into a Roth IRA each year (over 50? You can ramp up to $6,000). The benefit of the Roth is that when you withdraw money from a Roth after age 59 and a half, there is no income tax due.
As a result, many parents of young adults are gifting Roth IRA’s to their children each year. They are doing their children a tremendous favor. Today, most young adults, even of affluent families, fear that they will not be as prosperous as their parents. This is the first time that this has happened in U.S. history. If a young person puts $5,000 away each year in a Roth starting at age 22, works steadily until age 65 and gets an average appreciation of 8% per year, he or she will have $1.29 million accrued. And, they can withdraw it tax-free!
Of course, not many 24 year olds have an extra five grand lying around and some lack the discipline. So many affluent, caring and imaginative parents are doing the job for them by gifting them a Roth each year. Many people of modest means do it as well. Some open an account for $1,000-1,500 and then add whatever they can afford each year. They will not give their children millions but can they help them big-time. Bernard Baruch called compound interest the 8th wonder of the modern world. I would posit that TAX-FREE COMPOUND INTEREST via a Roth IRA is even more powerful.
Some people are real visionaries about Roth’s. A man I know of but do not know personally is a retailer who puts his three-year-old granddaughter in his print ads and commercials. He pays her a salary as an actress. With real income, the apple of his eye is eligible for a Roth each year. He makes the maximum contribution each year and she will have a burgeoning next egg by the time she hits adulthood. By the time she is 60, grandpa will be long gone, but his gifts will sustain her forever.
Even some extremists are into it. One fellow wrote to me “the dollar is toast. If we keep spending recklessly, our money will be worthless in a generation. So, I buy my son a Roth each year and put it in an emerging markets mutual fund. If the US stumbles, my son will be okay.” Another gloom and doomer says, “We have to stop printing money. Each month I add to my daughter’s Roth. I keep the money in a gold share fund.” Now, I am skeptical of people who are not well diversified. But, the point is that no matter what you think about the current economic climate, you can find a way to help those whom you love with this neat trick.
You may never be a multi-millionaire yourself, but you can get your children a lot closer than you might think.
If you would like to contact Don Cole directly, you may write to him at doncolemedia@gmail.com
Today, we provide a rather offbeat post aimed at parents and grandparents. It is a ridiculously simple way of transferring substantial assets to your children and grandchildren without setting up elaborate trusts, convoluted wills, or other means that only make the lawyers money.
What I am talking about is giving your children a Roth IRA. A Roth, named after the late Delaware Senator William Roth, is an Individual Retirement Account (IRA) with a twist. If you earn less than $109,000 as a single person or $169,000 for a couple and are under 50, you can put $5,000 into a Roth IRA each year (over 50? You can ramp up to $6,000). The benefit of the Roth is that when you withdraw money from a Roth after age 59 and a half, there is no income tax due.
As a result, many parents of young adults are gifting Roth IRA’s to their children each year. They are doing their children a tremendous favor. Today, most young adults, even of affluent families, fear that they will not be as prosperous as their parents. This is the first time that this has happened in U.S. history. If a young person puts $5,000 away each year in a Roth starting at age 22, works steadily until age 65 and gets an average appreciation of 8% per year, he or she will have $1.29 million accrued. And, they can withdraw it tax-free!
Of course, not many 24 year olds have an extra five grand lying around and some lack the discipline. So many affluent, caring and imaginative parents are doing the job for them by gifting them a Roth each year. Many people of modest means do it as well. Some open an account for $1,000-1,500 and then add whatever they can afford each year. They will not give their children millions but can they help them big-time. Bernard Baruch called compound interest the 8th wonder of the modern world. I would posit that TAX-FREE COMPOUND INTEREST via a Roth IRA is even more powerful.
Some people are real visionaries about Roth’s. A man I know of but do not know personally is a retailer who puts his three-year-old granddaughter in his print ads and commercials. He pays her a salary as an actress. With real income, the apple of his eye is eligible for a Roth each year. He makes the maximum contribution each year and she will have a burgeoning next egg by the time she hits adulthood. By the time she is 60, grandpa will be long gone, but his gifts will sustain her forever.
Even some extremists are into it. One fellow wrote to me “the dollar is toast. If we keep spending recklessly, our money will be worthless in a generation. So, I buy my son a Roth each year and put it in an emerging markets mutual fund. If the US stumbles, my son will be okay.” Another gloom and doomer says, “We have to stop printing money. Each month I add to my daughter’s Roth. I keep the money in a gold share fund.” Now, I am skeptical of people who are not well diversified. But, the point is that no matter what you think about the current economic climate, you can find a way to help those whom you love with this neat trick.
You may never be a multi-millionaire yourself, but you can get your children a lot closer than you might think.
If you would like to contact Don Cole directly, you may write to him at doncolemedia@gmail.com
Sunday, July 17, 2011
The Great Wealth Shift
These days we hear and read a great bit about the possibility of a shift in wealth away from the United States. The pundits all say that we need to get our financial house in order soon or we will be in deep trouble. I agree about the urgent need to get our house in order but I do not see the problem as new as many seem to be saying.
Let us go back a few decades. In 1967, one of my brothers and I spent virtually an entire summer in Europe. We mowed lawns, shoveled snow and did other odd jobs to pay for the trip. People laughed at our audacity but everyone wished us well when we boarded the flight to Paris. The trip clearly changed my life. I realized that there was a world beyond my New England roots; there were people vastly different from me who also had dreams but had a completely different sense of life than I. Today, I attribute my willingness to pursue investment opportunities globally and to see other nations points of view on political issues to what I learned on that amazing trip.
The country that impressed me the most was Switzerland. It was stunningly beautiful, squeaky clean, and everything seemed to work efficiently which was not what I experienced in other European countries. The other striking thing about the country was how inexpensive things were. Their currency, the Swiss Franc, was worth 22 U.S. cents. When I returned to Zurich in late 1973, the Franc was worth 30 cents and Switzerland was no longer such a bargain. Today, the Swiss Franc is worth approximately $1.20. That is a five and a half fold increase in the Swiss Franc relative to the US dollar in 44 years. Admittedly, in recent weeks, with Greek, Portuguese, Spanish, Irish, and Italian money woes making the news, Europeans have bid up the value of the mighty Swiss Franc as a safe haven for their cash reserves. But setting that aside, the appreciation of the Swiss Franc has been five fold relative to the dollar.
How does this tiny landlocked country with virtually zero natural resources do it? Well, they are famous for their work ethic and thrift. Internationally, they mind their own business. In fact, they have not been involved in a war since Napoleon marched through a portion of their turf early in the 19th century. Taxes are fairly low but it is hardly a tax haven. They have many thousands of foreign workers but no illegal immigration. After your term of a few years is up, you go home. Citizenship is not an option except for the occasional film star or wildly successful businessperson. The federal government is pretty weak and does not spend much. Balanced budgets happen far more often than not. People are affluent and the schools are first rate with very high standards.
Some countries have emulated many of these features. Take the four Asian Tigers—Korea, Hong Kong, Taiwan, and Singapore. All have shown spectacular growth in recent years. A vibrant middle class is emerging across Asia and portions of Latin America. China and India add 20 million new middle class consumers each year but proportionately these smaller players along with Malaysia, Indonesia, and Vietnam may be doing equally as well.
In the United States, it seems, our middle class is dwindling, with a huge group of maybe 15 million households hanging on to a middle class lifestyle by their fingernails. One more dip in housing prices could drop several more million out of the middle class over the next 18 months.
So, yes, the problems that we face are daunting. But, remember, that they did not happen overnight. Just, as the Swiss Franc has appreciated steadily vis a vis the dollar with some ups and downs, the same thing can be said for our world economic dominance. It has slipped away gradually and not in a straight line but it has been relentless.
Right now, the news media and politicians are obsessed with our Federal debt limit and raising it by August 2nd. To me, this is a distraction from the real issues (yes, it should be raised to calm already jittery international markets). But the core issue is making us competitive again and that is no easy chore. Singapore, increasingly referred to as the Switzerland of the East, is basically a city-state. Policies can be enacted quickly. They and others are highly maneuverable. In China, freedom is lacking. If the government promulgates a change (i.e., a massive shift to wind generated power), it gets done. Part of the charm and strength of our democratic system is that everyone has a say so things happen more slowly than in smaller countries or autocratic ones.
Here are some ideas, all mine, but hardly original, that we might undertake to change things:
1) Start making things again—most of you who read this make or made your living as I did in some form of marketing endeavor. We are the best in the world at it. But, we need an industrial policy again in America. It will be hard to implement but all of us cannot be cable sales people, media directors, writers, day traders or gigolos.
2) Stop playing adventure around the world—virtually all of us applauded when George W. Bush invaded Afghanistan. We had been attacked and we were going after the people who did it. Well, 10 years later, we seem to be “nation-building” on paper but really supporting a corrupt regime to the tune of $2-3 billion per week. And, some American kids are still dying. From now on, we should never put a boot on the ground unless it is absolutely imperative to our domestic security. Trade with more nations, talk with everyone, make unlikely friends but be very spare with formal military intervention.
3) Education needs a facelift—every president in recent memory has talked about how he was going to “be the education president.” What nonsense. The states and counties control their schools-- not Washington. Here are two ideas sure to annoy a lot of people but also to me the ONLY way to make the American educational system competitive again:
a. Lengthen the school year—I dare you to take a look at all the countries around the globe that have better math, science, geography, history and reading scores than the U.S. Without exception, they have longer school years. Our school year is approximately 180 days per year (some schools may go to a four day school week next year due to lack of funding!). The better performing school systems abroad tend to be open 210-230 days per year. It makes sense. If you are in school longer, you can cover more material and get a stronger understanding of it. Some say that we must have 9-10 weeks off in the summer. Absurd. That was put in during the 19th century when our country was largely agrarian and there was no air conditioning. Today, less than 3% of Americans live and work on farms. So, the kids do not have to be home to help with planting and harvesting.
b. Pay teachers a lot more money—Did you ever notice how some of the best teachers are now near retirement age? Well, they have nearly 40 years of experience, which is a big plus. But, also when they entered teaching it was considered a profession and relatively speaking, the pay was okay. If you want to get the most talented, imaginative, and dedicated young people to go in to teaching, then jack up their pay big time. Is your child’s teacher as important to society as your tax accountant? I would say yes so pay him or her accordingly. Right now, many naturally gifted teachers are doing something else simply due to financial imperatives.
Can these suggestions be implemented? With many states and counties facing bankruptcy, it will be tough. But, the kids are our future and they need better than what they are getting now in many cases.
4) Energy Independence—since 1973 when Dick Nixon called for energy independence, every president has embraced the concept. No one has done anything. In Europe, renewables are up to 22% of total electricity production and Sweden claims that they will be not importing a drop of oil after 2020. We have done very little—the corn based ethanol effort of recent years was nothing more than an agricultural subsidy. Yet, we could do a lot more in wind, solar and nuclear, as well as sugar based ethanol plus use our vast domestic natural gas holdings to cut back on importing oil from countries who do not like us and share our values. If we spent our energy dollars here, it would create hundreds of thousands of jobs and improve our dismal balance of payments.
5) Close loopholes in the tax code—get this straight, kids. Closing a loophole is not an increase in taxes. It is usually just enforcing or tightening up the existing code. Some big corporations are paying little or no taxes. Hedge fund managers hold a position for under a minute and get to claim the profit as a tax favored capital gain rather than a short-term fully taxable gain. This can raise some money and not hurt economic growth. Emotionally, people will like the fairness of it.
6) Cut back on entitlements—this is political dynamite and I applaud President Obama and Speaker Boehner for trying to address it. Social Security could be fixed in an afternoon if several of us sat at a table and ran a few what if scenarios on a laptop. Raise the retirement age gradually over the next forty years, means test it so those with a high net worth get most of it taxed away, and soften the cost of living adjustments. Also, you could gradually raise the income ceiling on Social Security contributions. Presto! The system is saved. Most people under 30 will tell you that they will never get Social Security anyway. So, why the big stink when people want to raise the benefit to begin at age 68 forty years from now?
How about Medicare? Congressman Paul Ryan of Wisconsin wrote a bold plan that would attempt to balance the U.S. Federal budget over the next two decades. It was trashed as many people thought his treatment of Medicare was too draconian. I have only read snippets of it so I cannot in fairness say much. One thing he did shine the light on took great political courage. He said that the average American would pay out about $150,000 in Medicare payments in their working life but receive about $450,000 in benefits. That is not sustainable over the long term but most Americans blithely ignore the arithmetic. There is another sacred cow that almost no one brings up. Let us say that Granny is 92 years old and terminally ill. In the last six weeks of her life, perhaps $1-1.5 million will be spent to prolong her life. Were she in Norway, Denmark, Sweden, or Great Britain where socialized medicine has existed for generations, she would be made comfortable but extraordinary means would not be employed to keep her alive. This will be a huge issue in the U.S. in a few years. Right now we spend 17.3% of GDP on health care and many are not covered. In the Netherlands, they spend 8.2% and everyone is covered. If we are to contain health care costs, some terribly hard decisions will have to be made. When to pull the plug will be the biggest one.
7) Immigration—this topic generates a lot of hysteria. We are keeping out engineers, doctors, computer experts, and entrepreneurs because we lump all immigrants as people working in the underground economy. America should never turn away the talented and the eager. Why did our ancestors come here? A rational policy is needed.
Will we implement some or all of these changes? I just don’t know. But if we ignore them all, I can assure you in 10 years, the Swiss Franc will be $2.00, the Singaporean dollar will double, and our middle class will be a lot smaller.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Let us go back a few decades. In 1967, one of my brothers and I spent virtually an entire summer in Europe. We mowed lawns, shoveled snow and did other odd jobs to pay for the trip. People laughed at our audacity but everyone wished us well when we boarded the flight to Paris. The trip clearly changed my life. I realized that there was a world beyond my New England roots; there were people vastly different from me who also had dreams but had a completely different sense of life than I. Today, I attribute my willingness to pursue investment opportunities globally and to see other nations points of view on political issues to what I learned on that amazing trip.
The country that impressed me the most was Switzerland. It was stunningly beautiful, squeaky clean, and everything seemed to work efficiently which was not what I experienced in other European countries. The other striking thing about the country was how inexpensive things were. Their currency, the Swiss Franc, was worth 22 U.S. cents. When I returned to Zurich in late 1973, the Franc was worth 30 cents and Switzerland was no longer such a bargain. Today, the Swiss Franc is worth approximately $1.20. That is a five and a half fold increase in the Swiss Franc relative to the US dollar in 44 years. Admittedly, in recent weeks, with Greek, Portuguese, Spanish, Irish, and Italian money woes making the news, Europeans have bid up the value of the mighty Swiss Franc as a safe haven for their cash reserves. But setting that aside, the appreciation of the Swiss Franc has been five fold relative to the dollar.
How does this tiny landlocked country with virtually zero natural resources do it? Well, they are famous for their work ethic and thrift. Internationally, they mind their own business. In fact, they have not been involved in a war since Napoleon marched through a portion of their turf early in the 19th century. Taxes are fairly low but it is hardly a tax haven. They have many thousands of foreign workers but no illegal immigration. After your term of a few years is up, you go home. Citizenship is not an option except for the occasional film star or wildly successful businessperson. The federal government is pretty weak and does not spend much. Balanced budgets happen far more often than not. People are affluent and the schools are first rate with very high standards.
Some countries have emulated many of these features. Take the four Asian Tigers—Korea, Hong Kong, Taiwan, and Singapore. All have shown spectacular growth in recent years. A vibrant middle class is emerging across Asia and portions of Latin America. China and India add 20 million new middle class consumers each year but proportionately these smaller players along with Malaysia, Indonesia, and Vietnam may be doing equally as well.
In the United States, it seems, our middle class is dwindling, with a huge group of maybe 15 million households hanging on to a middle class lifestyle by their fingernails. One more dip in housing prices could drop several more million out of the middle class over the next 18 months.
So, yes, the problems that we face are daunting. But, remember, that they did not happen overnight. Just, as the Swiss Franc has appreciated steadily vis a vis the dollar with some ups and downs, the same thing can be said for our world economic dominance. It has slipped away gradually and not in a straight line but it has been relentless.
Right now, the news media and politicians are obsessed with our Federal debt limit and raising it by August 2nd. To me, this is a distraction from the real issues (yes, it should be raised to calm already jittery international markets). But the core issue is making us competitive again and that is no easy chore. Singapore, increasingly referred to as the Switzerland of the East, is basically a city-state. Policies can be enacted quickly. They and others are highly maneuverable. In China, freedom is lacking. If the government promulgates a change (i.e., a massive shift to wind generated power), it gets done. Part of the charm and strength of our democratic system is that everyone has a say so things happen more slowly than in smaller countries or autocratic ones.
Here are some ideas, all mine, but hardly original, that we might undertake to change things:
1) Start making things again—most of you who read this make or made your living as I did in some form of marketing endeavor. We are the best in the world at it. But, we need an industrial policy again in America. It will be hard to implement but all of us cannot be cable sales people, media directors, writers, day traders or gigolos.
2) Stop playing adventure around the world—virtually all of us applauded when George W. Bush invaded Afghanistan. We had been attacked and we were going after the people who did it. Well, 10 years later, we seem to be “nation-building” on paper but really supporting a corrupt regime to the tune of $2-3 billion per week. And, some American kids are still dying. From now on, we should never put a boot on the ground unless it is absolutely imperative to our domestic security. Trade with more nations, talk with everyone, make unlikely friends but be very spare with formal military intervention.
3) Education needs a facelift—every president in recent memory has talked about how he was going to “be the education president.” What nonsense. The states and counties control their schools-- not Washington. Here are two ideas sure to annoy a lot of people but also to me the ONLY way to make the American educational system competitive again:
a. Lengthen the school year—I dare you to take a look at all the countries around the globe that have better math, science, geography, history and reading scores than the U.S. Without exception, they have longer school years. Our school year is approximately 180 days per year (some schools may go to a four day school week next year due to lack of funding!). The better performing school systems abroad tend to be open 210-230 days per year. It makes sense. If you are in school longer, you can cover more material and get a stronger understanding of it. Some say that we must have 9-10 weeks off in the summer. Absurd. That was put in during the 19th century when our country was largely agrarian and there was no air conditioning. Today, less than 3% of Americans live and work on farms. So, the kids do not have to be home to help with planting and harvesting.
b. Pay teachers a lot more money—Did you ever notice how some of the best teachers are now near retirement age? Well, they have nearly 40 years of experience, which is a big plus. But, also when they entered teaching it was considered a profession and relatively speaking, the pay was okay. If you want to get the most talented, imaginative, and dedicated young people to go in to teaching, then jack up their pay big time. Is your child’s teacher as important to society as your tax accountant? I would say yes so pay him or her accordingly. Right now, many naturally gifted teachers are doing something else simply due to financial imperatives.
Can these suggestions be implemented? With many states and counties facing bankruptcy, it will be tough. But, the kids are our future and they need better than what they are getting now in many cases.
4) Energy Independence—since 1973 when Dick Nixon called for energy independence, every president has embraced the concept. No one has done anything. In Europe, renewables are up to 22% of total electricity production and Sweden claims that they will be not importing a drop of oil after 2020. We have done very little—the corn based ethanol effort of recent years was nothing more than an agricultural subsidy. Yet, we could do a lot more in wind, solar and nuclear, as well as sugar based ethanol plus use our vast domestic natural gas holdings to cut back on importing oil from countries who do not like us and share our values. If we spent our energy dollars here, it would create hundreds of thousands of jobs and improve our dismal balance of payments.
5) Close loopholes in the tax code—get this straight, kids. Closing a loophole is not an increase in taxes. It is usually just enforcing or tightening up the existing code. Some big corporations are paying little or no taxes. Hedge fund managers hold a position for under a minute and get to claim the profit as a tax favored capital gain rather than a short-term fully taxable gain. This can raise some money and not hurt economic growth. Emotionally, people will like the fairness of it.
6) Cut back on entitlements—this is political dynamite and I applaud President Obama and Speaker Boehner for trying to address it. Social Security could be fixed in an afternoon if several of us sat at a table and ran a few what if scenarios on a laptop. Raise the retirement age gradually over the next forty years, means test it so those with a high net worth get most of it taxed away, and soften the cost of living adjustments. Also, you could gradually raise the income ceiling on Social Security contributions. Presto! The system is saved. Most people under 30 will tell you that they will never get Social Security anyway. So, why the big stink when people want to raise the benefit to begin at age 68 forty years from now?
How about Medicare? Congressman Paul Ryan of Wisconsin wrote a bold plan that would attempt to balance the U.S. Federal budget over the next two decades. It was trashed as many people thought his treatment of Medicare was too draconian. I have only read snippets of it so I cannot in fairness say much. One thing he did shine the light on took great political courage. He said that the average American would pay out about $150,000 in Medicare payments in their working life but receive about $450,000 in benefits. That is not sustainable over the long term but most Americans blithely ignore the arithmetic. There is another sacred cow that almost no one brings up. Let us say that Granny is 92 years old and terminally ill. In the last six weeks of her life, perhaps $1-1.5 million will be spent to prolong her life. Were she in Norway, Denmark, Sweden, or Great Britain where socialized medicine has existed for generations, she would be made comfortable but extraordinary means would not be employed to keep her alive. This will be a huge issue in the U.S. in a few years. Right now we spend 17.3% of GDP on health care and many are not covered. In the Netherlands, they spend 8.2% and everyone is covered. If we are to contain health care costs, some terribly hard decisions will have to be made. When to pull the plug will be the biggest one.
7) Immigration—this topic generates a lot of hysteria. We are keeping out engineers, doctors, computer experts, and entrepreneurs because we lump all immigrants as people working in the underground economy. America should never turn away the talented and the eager. Why did our ancestors come here? A rational policy is needed.
Will we implement some or all of these changes? I just don’t know. But if we ignore them all, I can assure you in 10 years, the Swiss Franc will be $2.00, the Singaporean dollar will double, and our middle class will be a lot smaller.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, July 9, 2011
Selling Across the Generations
Like many of my contemporaries, whenever I enter a room for a lecture, meeting, or presentation to a group who does not know me, it gives me pause. The reason is very simple—I am getting old. It is not unusual for me to be twice as old as anyone else in the room. What I have learned and many of my mature friends have as well is that you have to shift gears to present to an audience much younger than yourself and also demonstrate some neat balancing tricks if your audience covers a wide age span.
Basically, as I often write, it seems to come down to demographics. Most analysts would put our population in five core categories:
1) MATURES—Age 66+
2) BABY BOOMERS—Age 47-65
3) Generation X—Age 32 to 46
4) Millennials—under 31
5) Post Millennials—born after 2000 (not an issue here)
The first rule of many presentation gurus is to tell people to always “Be yourself.” In general that makes sense but unless you are pitching to members of your own generation that can be deadly. These days you must market yourself with great care. I have talked to many people about this issue, had some significant personal experience and read a number of studies on the topic. Here is where I come out on it.
First, here are some generalizations about each demographic group:
1) MATURES (66+)—you will not be selling to many matures these days but if you do, they likely are owners of a privately held business. They like face time with you. Experience is everything to them; they want someone who has worked in the trenches as they have. These are team players that put their company first and want you to do the same. They want service from a consultant or a salesperson or agency. Your reputation may be checked out thoroughly. Ask them what you can do for them. Never send them a text message. Got it? Never!
2) BABY BOOMERS (47-65)—you may find some workaholics here. They have a competitive streak but are ultimately team players. LISTEN to them very carefully. Let them know that you are eager to be on their team. Also, be very cautious about discussing technology. If you hammer away at technology being the silver bullet to solve their problem(s), they may withdraw. Many are insecure about their positions and, to some, technology means layoffs with their name on it. They like carefully written e-mails.
3) GEN X (32-46)—this is a very skeptical group. You must PROVE your worth to them. They love data—don’t ever talk about gut plays with them. If you make a definitive statement in a meeting or presentation, be sure that you can back it up. I have noticed a quirk with this group since caller ID has come to almost every company. If you call them, they will often not pick up the phone. They will listen to you message, perhaps a few times, and then call you back. As a rule, they are getting into texting but the message should be really spare like “may I call you after 4?” These folks like defined roles and are not “company men and women.” They crave balance in their lives and are not keen on being contacted nights or on weekends from outsiders.
4) Millennials (31 and under)—this group is a bit spoiled. They never lost a game as children or failed at anything. They have no sense of history, corporate or otherwise, so never tell old war stories to them or go to precedent that is more than a few years old. They have huge goals and big dreams but do not seem to have any idea how to execute them into reality. Focus is often not their strong suit. They crave compliments about their work and everything else. This according to some psychologists in affluent societies is due to an upbringing that fostered a delayed entry into adulthood. It has been referred to a bit unkindly as “Adultolescence.” If you can reinforce to them that you see their uniqueness, you can come out way ahead. They love texting—feel free to communicate that way. If you are in a meeting with them and all of them are texting at one time or another, they are NOT showing contempt for you or rudeness. It is simply part of their corporate culture. If the boss is a MATURE, I bet that no one texts in meetings. ☺ They know, love, and embrace technology.
So, if you want to succeed, you have a big leg up if you know the demographic makeup of your audience BEFORE you meet. You can tailor your style accordingly. No matter who the group is, be brief and respectful of their time.
Importantly, always remember that people like to do business with people whom they perceive as like them. That is why sales teams are often taught, “mirroring”. If the prospect is super casual, you can often leave your tie and jacket in the car. If they want to talk NFL football, you get on line before the meeting or watch Sportcenter the night before and are able to talk with them. A few years ago I had a meeting with a man who was less than half my age. He was a client and he appeared to dismiss everything I said. As I was leaving, I had to pick up a report in his office. I noticed a lot of lacrosse pictures on the wall and some memorabilia as well. Without missing a beat, I mentioned that my daughter played on her high school team and that my dad had been the lacrosse coach at Brown University. He exploded with delight and went on a 15-minute rant about Ivy League lacrosse (I did NOT mention that my father had been coach in the 1930’s, long before I was born!). From then on, I was his business partner and he frequently gave me a heads up when he thought his company might be doing something that could harm my agency’s business. We were as different as night and day but I had succeeded in mirroring him and it worked like a charm.
If you are a consultant, the generational divide is very tough. For those of us who are a bit older, young people get very defensive when you walk into a room. Some will think that you want their job (no thanks—been there, done that!). Others think that the CEO has brought you in to build a case to get them fired. You need to tread carefully and stress that you are there to help. The CEO needs to position your presence carefully but few do it well.
Each group views the world differently. Let’s face it. All of us are products of our environment. Thus, our generational perspective will have a GREAT deal to do with how we view things. Whether you are a sales maven, a consultant, or an agency rainmaker or service person, may I suggest that you develop sensitivity to selling across generations?
In closing, yesterday I had lunch with a broadcast executive whom I view as one of the best salesman in America. He raised the issue of what do you do when pitching a room who ages span from 25-70. His answer was the pitch the middle—the older Gen Xers and the young Baby Boomers. Sound advice.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Basically, as I often write, it seems to come down to demographics. Most analysts would put our population in five core categories:
1) MATURES—Age 66+
2) BABY BOOMERS—Age 47-65
3) Generation X—Age 32 to 46
4) Millennials—under 31
5) Post Millennials—born after 2000 (not an issue here)
The first rule of many presentation gurus is to tell people to always “Be yourself.” In general that makes sense but unless you are pitching to members of your own generation that can be deadly. These days you must market yourself with great care. I have talked to many people about this issue, had some significant personal experience and read a number of studies on the topic. Here is where I come out on it.
First, here are some generalizations about each demographic group:
1) MATURES (66+)—you will not be selling to many matures these days but if you do, they likely are owners of a privately held business. They like face time with you. Experience is everything to them; they want someone who has worked in the trenches as they have. These are team players that put their company first and want you to do the same. They want service from a consultant or a salesperson or agency. Your reputation may be checked out thoroughly. Ask them what you can do for them. Never send them a text message. Got it? Never!
2) BABY BOOMERS (47-65)—you may find some workaholics here. They have a competitive streak but are ultimately team players. LISTEN to them very carefully. Let them know that you are eager to be on their team. Also, be very cautious about discussing technology. If you hammer away at technology being the silver bullet to solve their problem(s), they may withdraw. Many are insecure about their positions and, to some, technology means layoffs with their name on it. They like carefully written e-mails.
3) GEN X (32-46)—this is a very skeptical group. You must PROVE your worth to them. They love data—don’t ever talk about gut plays with them. If you make a definitive statement in a meeting or presentation, be sure that you can back it up. I have noticed a quirk with this group since caller ID has come to almost every company. If you call them, they will often not pick up the phone. They will listen to you message, perhaps a few times, and then call you back. As a rule, they are getting into texting but the message should be really spare like “may I call you after 4?” These folks like defined roles and are not “company men and women.” They crave balance in their lives and are not keen on being contacted nights or on weekends from outsiders.
4) Millennials (31 and under)—this group is a bit spoiled. They never lost a game as children or failed at anything. They have no sense of history, corporate or otherwise, so never tell old war stories to them or go to precedent that is more than a few years old. They have huge goals and big dreams but do not seem to have any idea how to execute them into reality. Focus is often not their strong suit. They crave compliments about their work and everything else. This according to some psychologists in affluent societies is due to an upbringing that fostered a delayed entry into adulthood. It has been referred to a bit unkindly as “Adultolescence.” If you can reinforce to them that you see their uniqueness, you can come out way ahead. They love texting—feel free to communicate that way. If you are in a meeting with them and all of them are texting at one time or another, they are NOT showing contempt for you or rudeness. It is simply part of their corporate culture. If the boss is a MATURE, I bet that no one texts in meetings. ☺ They know, love, and embrace technology.
So, if you want to succeed, you have a big leg up if you know the demographic makeup of your audience BEFORE you meet. You can tailor your style accordingly. No matter who the group is, be brief and respectful of their time.
Importantly, always remember that people like to do business with people whom they perceive as like them. That is why sales teams are often taught, “mirroring”. If the prospect is super casual, you can often leave your tie and jacket in the car. If they want to talk NFL football, you get on line before the meeting or watch Sportcenter the night before and are able to talk with them. A few years ago I had a meeting with a man who was less than half my age. He was a client and he appeared to dismiss everything I said. As I was leaving, I had to pick up a report in his office. I noticed a lot of lacrosse pictures on the wall and some memorabilia as well. Without missing a beat, I mentioned that my daughter played on her high school team and that my dad had been the lacrosse coach at Brown University. He exploded with delight and went on a 15-minute rant about Ivy League lacrosse (I did NOT mention that my father had been coach in the 1930’s, long before I was born!). From then on, I was his business partner and he frequently gave me a heads up when he thought his company might be doing something that could harm my agency’s business. We were as different as night and day but I had succeeded in mirroring him and it worked like a charm.
If you are a consultant, the generational divide is very tough. For those of us who are a bit older, young people get very defensive when you walk into a room. Some will think that you want their job (no thanks—been there, done that!). Others think that the CEO has brought you in to build a case to get them fired. You need to tread carefully and stress that you are there to help. The CEO needs to position your presence carefully but few do it well.
Each group views the world differently. Let’s face it. All of us are products of our environment. Thus, our generational perspective will have a GREAT deal to do with how we view things. Whether you are a sales maven, a consultant, or an agency rainmaker or service person, may I suggest that you develop sensitivity to selling across generations?
In closing, yesterday I had lunch with a broadcast executive whom I view as one of the best salesman in America. He raised the issue of what do you do when pitching a room who ages span from 25-70. His answer was the pitch the middle—the older Gen Xers and the young Baby Boomers. Sound advice.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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