The Clean and Green Club

Last month, when I reviewed The Rise of the Rogue Executive, I promised a review this month of Behaving Badly: Ethical Lessons from Enron.

I don’t like to break a promise, but I decided that was a bad idea. I already gave one review of the “dark side” last month. There are so many wonderful books showing positive outcomes from positive behaviors that I should only look at negative outcomes of negative behaviors once in a while–certainly not two months in a row! The much better path to the world I want to help build is the path that takes us there, and not the dead end road with the “do not enter” sign.

Positive Power Spotlight, July 2007: Rocky Mountain Institute

Back in 1977, Amory Lovins published a groundbreaking book called Soft Energy Paths: Toward a Durable Peace. I stumbled on it a year or two later and was blown away by the idea that not only didn’t we need nuclear power, but that the whole idea of mammoth, centralized power generation using fossil fuels, uranium, or other non-renewable fuels was basically dinosaur thinking, and that as a society, we not only needed to move beyond that, but could easily do so, using the sun and wind as our primary power sources.

Lovins has been a hero of mine ever since. He has gone on to write or co-author several other very important books, including Natural Capitalism. And to establish a profit-making consulting firm, the Rocky Mountain Institute, based out of the ultra-energy-efficient model home he built for himself in Old Snowmass, Colorado, in 1983. How efficient is ultra-efficient? So efficient that the 4000 square foot luxury house paid back the entire cost of all its energy saving features in just ten months (at a time when fuel was a whole lot cheaper than it is now so today’s payback would be even faster). A few years ago, Lovins told an audience that the residential portion of his house (not counting RMI’s offices) had a $5 average monthly electricity bill–and that despite living in the snowbelt just outside Aspen, he was keeping the house warm enough to grow bananas.

RMI makes its living in part through selling informational resources about soft energy technologies–but more importantly, by consulting on energy reduction.

And by looking holistically, the savings can be huge. RMI has helped with projects such as…

• A house in a city known for extreme temperatures (up to 113 degrees Fahrenheit) that doesn’t need an air conditioner or central heater
• An industrial piping system that is not only 92 percent more energy efficient, but is also lighter, quieter, cheaper to build, and easier to maintain
• A prototype SUV that compares favorably with today’s models in comfort and storage capacity, but uses only as much energy for everything as the typical SUV uses for air conditioning

In short, RMI can be an international model for developing sane energy use patterns that don’t interfere with our lifestyle, and earn a healthy profit.

Note: a longer profile of Lovins and RMI appears in my award-winning sixth book, Principled Profit: Marketing That Puts People First.

Click to visit Rocky Mountain Institute

We’ve now gotten to the minimum number of subscribers, and I will be launching my latest newsletter July 25. Each month, a different frugal marketing idea just for books. If you’d like to subscribe, please click here and respond to the confirmation message.

Among the many sweeping changes the Internet has brought in the last decade is a powerful reinvention of the centuries-old marketing form of classified ads. Popularized by Google and its amazing ability to match the content of a page with (mostly) appropriate ads, pay-per-click advertising (PPC) has completely changed the advertising world. And somehow, I haven’t talked about PPC before in my newsletter. For the next four months, we’ll fix that.

In the old days, classifieds were much-loved by direct marketers because they were trackable. You could easily use a department number or other device to find out how many people responded to the ad. If you were lucky, you might have been able to negotiate payment based on the number of inquiries or orders. Otherwise, you had to pay based on circulation.

But…back then, there was a long learning curve. In some cases, you had to place your insertion order months in advance, and results would trickle in for weeks after publication. If you committed to three months in a row, you wouldn’t know if you were wasting your money or making a fortune–and you also would either have to recommit to the ad before the results were in, or wait another several months to reinsert on the basis of meaningful data. And even if you were doing an “A/B split”–testing different versions in different parts of the print run, it was a long time before you really had the data.

The first attempts to bring the classified model to the Web were horrible: pages and pages of un-classified (or very loosely organized, at best) ads thrown up on a web page with no other content; the only people who saw them were other entrepreneurs placing their own ads. Yuck!

Pay-per-click on the Web changed all that. It combined the strengths of the print model–careful classification by subject, targeting to specific audiences–with the strengths of the Web: searchability, quick response. And it added something from the model of print display ads: the classifieds were right up next to relevant editorial content. Even better, most websites using classifieds quickly went to PPC, so that marketers only paid for results.

Google is not the only player (there are hundreds, including Yahoo and MSN)–but Google did a few things that were very, very smart:

• Created algorithms to automatically analyze a page’s content and retrieve very appropriate, relevant ads that people would actually click on; though sometimes you can search for a term and get ads that are waaay off base, overall, its accuracy is astonishing.
• Made partners of hundreds of thousands of websites that could monetize their own content by letting Google automatically display ads–thus providing far more “eyeballs” for the ads!
• And of course, thoroughly integrated PPC results into its own search results pages, as did the other PPC engines.
• Fine-tuned the process so that the most popular ads get displayed more frequently, even if they aren’t the highest bidder
• Allowed advertisers to participate at a very low entry cost, test extensively, and refine their ad strategies on the fly.

So now, a marketer can roll out a new website, start PPC campaigns for carefully targeted keywords, and if the budget is high enough and the search terms popular enough, measure the results within hours, change some elements, and test again.

Recommended book to supplement this article: Grassroots Marketing: Getting Noticed in a Noisy World, which has nine full chapters on Internet/online marketing, with lots of cost-effective strategies you may not have come across elsewhere.

Coming in parts 2, 3 & 4:
August: Keyword Analysis

September: PPC Copywriting

October: Fast And Effective PPC Testing Strategies

Fabulous article at Grok.com on how a buyer’s state of mind may be different when considering a purchase than his or her normal personality.

This month and next, we’ll look at the dark side: two books that look not at what can be made right in corporate America, but what went wrong.

The Rise of the Rogue Executive places much blame on internal procedures that jettisoned 100 years of responsible practices, and the technologies that made fraud and profiteering possible on a scale that simply wasn’t possible in generations past.

And sometimes, flat-out lies, as in WorldCom using a totally theoretical “what-if” spreadsheet looking at the opportunity if Internet use doubled every 100 days as the basis of its income projections! The result of this total lie was devastation in the telecom industry, which was frantically laying cable in order to keep up with this demand prediction.

Another key cause was the incentive structure (eliminated by Sarbanes-Oxley in the aftermath of Enron’s collapse) that turned consultants and auditors at Big Six accounting firms such as Arthur Andersen into sales staff and pressured auditors not to jeopardize the far more lucrative consulting business (the book reproduces the full text of the Anderson indictment, in fact). Can you say “conflict of interest?”

And taking it further, CEOs face pressure to cook the books or look the other way when those to whom they delegate are unethical, both because of their own ludicrous compensation structures and pressure from investors for short-term growth. (The book cites bad behavior on the part of Dick Cheney during his Halliburton days, among others.)

But ethical, involved leaders can surmount the challenge. The book discusses this, but this part is much weaker, mostly focusing once again on the wrongdoers. I’d have liked to see that part built up.

Of course, my own award-winning sixth book, Principled Profit: Marketing That Puts People First covers that part in detail, explaining how to set up and run successful ethical companies.

And one easy step companies can do is to sign the Business Ethics Pledge, so consumers know of their commitment.

Find this book at Amazon: The Rise of the Rogue Executive: How Good Companies Go Bad and How to Stop the Destruction by Leonard R. Sayles and Cynthia J. Smith (Wharton, 2005)

Here’s a 10-point program for greatness:

1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble

These are the core values of Tony Hsieh, CEO of Zappos.com, “a customer service company that happens to sell shoes.” Lots of shoes, at that: 1,080 brands, 155,725 styles, and 2,885,850 separate products–including, for instance, 15 pages of vegetarian-friendly shoes containing no leather! And it’s easy to navigate the site, drilling down for example from shoes to men’s dress shoes for wide feet in just a couple of clicks.

Add to this huge selection a low-price guarantee, free shipping on both purchases (overnight, at that) and returns, a one-year return policy

Zappos is a powerful example of delivering such a good experience that people have to tell their friends (something I discuss extensively in my award-winning sixth book, <a href=”https://www.principledprofit.com”>Principled Profit: Marketing that Puts People First</a>).

In fact, I learned about the company because of a post in the LED discussion list (highly recommended) by listowner Adam Audette, who happens to manage the Zappos discussion list. Thousands of people learned about the company from that post, or from a blog post on voodoventures.com about touring the company and discovering such perks as a blow-off-steam room, a substantial lending library, as well as extremely accessible senior management (often another hallmark of successful ethical companies.

Does it work? The company expects to break $1 billion next year. I’d say that’s pretty good!