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Throwing Around $100 Bills - 1

Overseas Travel When Your Currency is Kaput

December 2007 By Denny Hatch
9
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In the News

ECONOMIC VIEW
The Dollar Is Falling, and That’s Good News
ANXIETY about the dollar continues to spread. The falling greenback is often seen as a sign of an impending recession or the fall of the United States from global leadership. A low dollar simply looks bad. We are, after all, used to judging ourselves against others — comparing our salaries with the earnings of our peers, and our homes with those of our neighbors. We’re used to thinking it is a big advantage to stand at the top of a numerical list. But when it comes to currencies, a higher value neither brings national success nor predicts future prosperity. The measure of a nation’s wealth is the goods and services it produces, not the relative standing of its currency. Take a look at 1985-88, when the dollar lost more ground than in the last few years. Those were good times, and the next decade was largely prosperous as well.
—Tyler Cowen, The New York Times, December 2, 2007
I guess in terms of the country—and the balance of trade—a crashing dollar is a good thing.

For my balance of trade, it stinks.

We flew into London last Saturday and went out for dinner. A bowl of soup for lunch was £8.50, which translates to $17.00. A £4.00 ride on the Underground for 10 blocks to get out of a rainstorm was $8.00 ($16 for two)—not a lot of fun. Dinner for two was at least $100 pretty much anywhere.

An exception was the Albert Pub. The bad news: the food was so-so. The good news: dinner was relatively inexpensive. The best news: smoking has been banned in London, so pubs—and everyplace else—are a joy.

In spite of the prices, for a direct marketer, was a European jaunt a good deal?

Oh, yes.

In the words of Yogi Berra, “You can see a lot just by observing.”

About Loyalty Programs
The media are filled with stories about the beating travelers with frequent flier miles are taking when they try to redeem them. The first loyalty miles program was started 26 years ago by American Airlines—a brilliant marketing scheme that was copied everywhere.

But greedy, stupid marketers corrupted the business model and commoditized free miles. Today half the miles awards are given to non-fliers as bribes for using their credit cards. Now the airlines are flying full, and to compound the squeeze it was announced last week that the six major carriers are cutting back on the number of flights by an average of 4.4%—or 72,000 less seats a day in the continental U.S.—when air travel is up 3%.

Currently 14 trillion free miles are outstanding around the world. You want to cash in your miles? Beyond an occasional upgrade, trying to get free air travel for your miles is an exercise in self-waterboarding. American, Delta, Northwest, Continental, United and US Airways have turned a stunning marketing breakthrough into a giant Ponzi Scheme that creates diss-loyalty.

Jet travel is extraordinary. Airline marketing is abysmal. And airlines don’t care, because they don’t have to.

See the hyperlinks below for confirmation.

Hilton HHonors
My wife, Peggy, who travels frequently for business, is a Hilton customer. As a result of the Hilton HHonors program, she gets free nights at Hiltons when we travel—London, Paris, Budapest, New York. Included are breakfast and sometimes the Concierge Suite, which means free booze and nibbles.

Takeaway Points to Consider:

* On the Crash of the Dollar Not only is the dollar on the rocks across the pond, but the Canadian dollar is now at parity or better after years of Toronto and Montreal being a U.S. shopper’s paradise. Many book covers have North American prices that will say, “$24.95 ($31.95 in Canada).” Have you adjusted your Canadian prices to the new value of the Canadian dollar? In your catalog, direct mail and Web site? If not, you are losing Canadian business.

* On Loyalty Programs Frequent flier programs—once a promotional boon for the airlines—are causing a backlash as customers with vast numbers of miles find they cannot use them as planes are flying full and airlines are cutting back on service. Take a look at the current business model of your loyalty programs to make sure they make customers loyal and desirous of doing more business with you. Hilton Hotels is your model.

* “Glengarry Glen Ross” Never underestimate the importance of world-class lead generation. It is the lifeblood of business, the secret of growth and key to the happiness and success of your employees.

* The Buckingham Palace Gift Shop Our experience echoed the rule of consultant Marilyn Black: “Underpromise and overdeliver.” I did not expect the little pens I bought would take standard refills and last indefinitely. Nor were we expecting a free gift—royal Christmas tree ornaments—because we spent over £25. “‘Free’ is a magic word,” said the late guru Dick Benson. Are you making your customers feel good about doing business with you? Is every person that has contact with your prospects and customers highly trained and capable? Or are you saving money by operating a boiler room in India?

* The National Gallery’s Print on Demand Machine With all the splendid new technology available, are one or more areas of your business being operated on a mid-twentieth century model? Could you not streamline it and (1) save money, (2) create a better product and (3) make customers happier? For example, mainstream book publishers are operating on a 19th century model while Print on Demand technology could make them very profitable—if they understood how it works.

* Do You Survey Your Customers? Even if you throw away the surveys unopened, they will think you care.

* St Pancras Station Can you come up with a redesign that will dazzle your customers and prospects?

Web Sites Related to Today's Edition:

“Still Loyal to Your Airline? You Must Be Looney Tunes”
http://www.nytimes.com/2006/03/21/business/21road.html

14 Trillion Unredeemed Frequent Flier Miles
http://tinyurl.com/34tm4f

Redeeming Frequent Filer Miles Is Tough
http://tinyurl.com/332g6f

Frequent Flier Web Site
http://www.frequentflier.com/

Hilton HHonors
http://tinyurl.com/2dynnf

The Queens Gallery, Buckingham Palace
http://www.royal.gov.uk/OutPut/Page1208.asp

Interactive 360-degree panoramic images of St Pancras station
http://tinyurl.com/3xuhrc

The National Gallery Shop
http://www.nationalgallery.co.uk/shop/default.asp
 

Companies Mentioned:
9

COMMENTS

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Most Recent Comments:
Paul Zink - Posted on December 11, 2007
Everyone's impression of a city is different, of course. Although I haven't been to London for years, I am very fond of it, at least in memory. But my wife, mother-in-law and daughter went this summer, for the first time, and were dismayed. According to my wife, the city streets were mostly full of middle-easterners (my wife -- who is part North African -- said ?If I wanted to visit Algiers, I would have gone there?)? Also, they said that more than one city street had a large official sign warning that you were at risk of bodily harm from crime if you ventured further (imagine that on any street in an American city!).

Concerning the smoking ban in the pubs, I think it?s a shame: how would non-smokers feel if smoking were mandatory in bars rather than the other way ?round? As a marketer (as Denny is so fond of saying), I say: ?let the market decide??

But every person who has left a comment here seems most taken by Glengarry Glen Ross ? and for good reason: it is a fine play. The movie was superb, but I was also fortunate to see the theater production on stage in San Francisco in 1986, with original cast member Joe Mantegna in the ?Richard Roma? role (played on film by Al Pacino), as well as some of the other original Broadway cast. An unforgettable experience, especially since I had never before then heard the ?F-word? used so frequently in so short a space of time, let alone on stage!
David Rose - Posted on December 11, 2007
Tying together European prices and a sort of negative loyalty program, I recall driving in Europe in the late '60s with my brother, who had just taken delivery of his new Volvo (which cost, I believe, ~$2800).

As we were nearing Amsterdam, I opened Arthur Frommer's "Europe on $5 a Day" and found this customer-friendly comment: "It's too bad that you don't have much money, because you will be unable to stay at the superb (sic) Hotel Arthur Frommer which, at $7 per night, is out of your price range".

Re: awesome. It would seem that common usage of the word stems from the advertising campaign introducing a new Japanese sports car: "The Datsun 240Z--AWESOME!!"
Bernie Malonson - Posted on December 11, 2007
GlenGarry Glen Ross. What a great flick! Pay close attention to Alec Baldwin's performance as the sales trainer.

"Always Be Selling. A man doesn't walk on the lot unless he wants to buy. Your job is to SELL him!"

I recently read a great quote by Hershell Gordon Lewis, "Do not be afraid to sell."

The movie echoes this as well.

The other key point to watch for is the office managers interruption of Al Pacino, Jack Lemmon and Johnathan Pryce.

Cheers!

Bernie
Brent D. Gardner, CLU, ChFC - Posted on December 11, 2007
Glengarry Glen Ross is a classic story, and the movie is full of some oft quoted lines that salespeople joke about. Alec Baldwin's speech has been played in more sales meetings than any, except maybe Ben Afleck's speech in Boiler Room.

In my industry, prospecting is everything. There's more unrewarded brilliance in financial services than probably any other. We joke about failed planners who are well educated, and smart, but who don't have the cajones to pick up the phone, or walk in and ask for Mr. Big in person.

Selling really isn't difficult. Getting in front of buyers that want/need something, when they want/need it, when they can afford it, when they are willing to make a change from the status quo? That's a little more difficult, and that's why 19 out of 20 insurance and investment brokers wash out of this Darwinian craft.
Kevin Nielsen - Posted on December 11, 2007
Glengarry Glen Ross. Darkest movie I ever saw. A tribute to lies, manipulation and greed. A onetime print salesrep associate of mine held the movie as his model of how to conduct business. He was not a successful rep; nor did he evince an ounce of joy in his personna. I'll be curious Denny to know if the movie leaves you with a similar chill. Happy Holidays!
Wash Phillips - Posted on December 11, 2007
Heard on the radio last night that very recently both Egypt and Israel wrote the White House (or whomever) asking that their U.S. aid be administered in Euros, not dollars.
The government reply was not stated. What would yours be?
Mike McCormick - Posted on December 11, 2007
Denny, Thanks for the comments on Glengarry. I think of the movie often. Jack Lemon is especially good. This line in your column fascinated me "smoking has been banned in London, so pubs?and everyplace else?are a joy." I would always add "except, of course, for the 20% or so of the adult population that smokes." Nobody's explained yet why we can't have smoking and non smoking bars (owner's choice) so the people can decide. Oh wait, I just answered my own question. We can't let the people decide can we? Mike
John Jervis - Posted on December 11, 2007
When my kids and I compare the good old days to today, I look at how many hours did I need (and do I now) have to work to buy bread, a washing machines, a car, etc.

Seems some things are better in that regard, but it's still pretty relative.

So more of our dollars are needed to "buy" an hour of their work there. Perhaps it's their taxes, social programs, or whatever that makes their hour more expensive than ours.

We produce more in an hour than they may, so our produced goods are cheaper to them.

This is why Chinese goods are cheaper than ours. Their hour/cost produces more than our hour/cost.

Secondly, this attracts more dollars back here. So many went over there (oil and all that).

Thirdly, I read where the "loonie" is so high relative to our "greenback" that Canadian companies (like Bombardier) are laying off workers, and sales are tanking.

This all doesn't bother me too much. Inflation would (wheelbarrows of money and all that like in early days of Third Reich) bother me more.

We produce quality goods cheaper to Europeans than they produce. We enjoy nearly full employment, a strong economy, etc.

Makes it hard to care about the Yen, the Euro, the Pound and the Loonie all that much.
Jay van Wagenen - Posted on December 11, 2007
In February my husband and are flying first class to Paris. This will be the third Euro trip in four years for us -- all first class flights, all free, courtesy of our frequent flyer miles, most of which were earned via credit card. Since the dollar is at its lowest point in our travel experience, I'm feeling rather grateful to greedy, stupid marketers that at least we can fly in comfort.
Click here to view archived comments...
Archived Comments:
Paul Zink - Posted on December 11, 2007
Everyone's impression of a city is different, of course. Although I haven't been to London for years, I am very fond of it, at least in memory. But my wife, mother-in-law and daughter went this summer, for the first time, and were dismayed. According to my wife, the city streets were mostly full of middle-easterners (my wife -- who is part North African -- said ?If I wanted to visit Algiers, I would have gone there?)? Also, they said that more than one city street had a large official sign warning that you were at risk of bodily harm from crime if you ventured further (imagine that on any street in an American city!).

Concerning the smoking ban in the pubs, I think it?s a shame: how would non-smokers feel if smoking were mandatory in bars rather than the other way ?round? As a marketer (as Denny is so fond of saying), I say: ?let the market decide??

But every person who has left a comment here seems most taken by Glengarry Glen Ross ? and for good reason: it is a fine play. The movie was superb, but I was also fortunate to see the theater production on stage in San Francisco in 1986, with original cast member Joe Mantegna in the ?Richard Roma? role (played on film by Al Pacino), as well as some of the other original Broadway cast. An unforgettable experience, especially since I had never before then heard the ?F-word? used so frequently in so short a space of time, let alone on stage!
David Rose - Posted on December 11, 2007
Tying together European prices and a sort of negative loyalty program, I recall driving in Europe in the late '60s with my brother, who had just taken delivery of his new Volvo (which cost, I believe, ~$2800).

As we were nearing Amsterdam, I opened Arthur Frommer's "Europe on $5 a Day" and found this customer-friendly comment: "It's too bad that you don't have much money, because you will be unable to stay at the superb (sic) Hotel Arthur Frommer which, at $7 per night, is out of your price range".

Re: awesome. It would seem that common usage of the word stems from the advertising campaign introducing a new Japanese sports car: "The Datsun 240Z--AWESOME!!"
Bernie Malonson - Posted on December 11, 2007
GlenGarry Glen Ross. What a great flick! Pay close attention to Alec Baldwin's performance as the sales trainer.

"Always Be Selling. A man doesn't walk on the lot unless he wants to buy. Your job is to SELL him!"

I recently read a great quote by Hershell Gordon Lewis, "Do not be afraid to sell."

The movie echoes this as well.

The other key point to watch for is the office managers interruption of Al Pacino, Jack Lemmon and Johnathan Pryce.

Cheers!

Bernie
Brent D. Gardner, CLU, ChFC - Posted on December 11, 2007
Glengarry Glen Ross is a classic story, and the movie is full of some oft quoted lines that salespeople joke about. Alec Baldwin's speech has been played in more sales meetings than any, except maybe Ben Afleck's speech in Boiler Room.

In my industry, prospecting is everything. There's more unrewarded brilliance in financial services than probably any other. We joke about failed planners who are well educated, and smart, but who don't have the cajones to pick up the phone, or walk in and ask for Mr. Big in person.

Selling really isn't difficult. Getting in front of buyers that want/need something, when they want/need it, when they can afford it, when they are willing to make a change from the status quo? That's a little more difficult, and that's why 19 out of 20 insurance and investment brokers wash out of this Darwinian craft.
Kevin Nielsen - Posted on December 11, 2007
Glengarry Glen Ross. Darkest movie I ever saw. A tribute to lies, manipulation and greed. A onetime print salesrep associate of mine held the movie as his model of how to conduct business. He was not a successful rep; nor did he evince an ounce of joy in his personna. I'll be curious Denny to know if the movie leaves you with a similar chill. Happy Holidays!
Wash Phillips - Posted on December 11, 2007
Heard on the radio last night that very recently both Egypt and Israel wrote the White House (or whomever) asking that their U.S. aid be administered in Euros, not dollars.
The government reply was not stated. What would yours be?
Mike McCormick - Posted on December 11, 2007
Denny, Thanks for the comments on Glengarry. I think of the movie often. Jack Lemon is especially good. This line in your column fascinated me "smoking has been banned in London, so pubs?and everyplace else?are a joy." I would always add "except, of course, for the 20% or so of the adult population that smokes." Nobody's explained yet why we can't have smoking and non smoking bars (owner's choice) so the people can decide. Oh wait, I just answered my own question. We can't let the people decide can we? Mike
John Jervis - Posted on December 11, 2007
When my kids and I compare the good old days to today, I look at how many hours did I need (and do I now) have to work to buy bread, a washing machines, a car, etc.

Seems some things are better in that regard, but it's still pretty relative.

So more of our dollars are needed to "buy" an hour of their work there. Perhaps it's their taxes, social programs, or whatever that makes their hour more expensive than ours.

We produce more in an hour than they may, so our produced goods are cheaper to them.

This is why Chinese goods are cheaper than ours. Their hour/cost produces more than our hour/cost.

Secondly, this attracts more dollars back here. So many went over there (oil and all that).

Thirdly, I read where the "loonie" is so high relative to our "greenback" that Canadian companies (like Bombardier) are laying off workers, and sales are tanking.

This all doesn't bother me too much. Inflation would (wheelbarrows of money and all that like in early days of Third Reich) bother me more.

We produce quality goods cheaper to Europeans than they produce. We enjoy nearly full employment, a strong economy, etc.

Makes it hard to care about the Yen, the Euro, the Pound and the Loonie all that much.
Jay van Wagenen - Posted on December 11, 2007
In February my husband and are flying first class to Paris. This will be the third Euro trip in four years for us -- all first class flights, all free, courtesy of our frequent flyer miles, most of which were earned via credit card. Since the dollar is at its lowest point in our travel experience, I'm feeling rather grateful to greedy, stupid marketers that at least we can fly in comfort.