In a recent article on www.reportonbusiness.com entitled Brand Surgery, Ken Hunt discusses the methods market researchers are using to define consumer's emotional attachment to a product.  Through a process that includes magnetic resonance imaging (MRI), researchers are delving in to "neuromarketing" in an effort to determine what actually makes us pull out our wallet.

He points out that often surveys are misleading in that they depend upon the respondent's honest answers.  And while individual's don't usually intend to misrepresent their opinions, they are in fact, coloring their responses due to any number of factors:  a need to impress or a fleeting mood, for example.  By using technology that measures involuntary physical reactions, researchers are able to obtain a truly unguarded emotional response.  

It's these emotional attachments to products or companies that every business covets.  Once in place, these relationships are very difficult to dislodge.  Consider your own attachment to certain products and how you will do without, rather than use another kind.  

Sounds a little scary doesn't it?  For those of you of a certain age, you might recall the brain washing scares of the sixties marketing scene in which subliminal messaging was the latest bogeyman.  

The point is that human behavior hasn't changed a bit in that humans are emotional beings who react emotionally to their surroundings.   It's the marketer's job to influence our behavior and opinions and it's the buyers job to beware.  Some things never change. 

        

Successful market research today requires an higher degree of information organization acumen than it did in the past.  In the old days, we used to go the library, get chummy with the research assistants, and take lots of notes.  If we were smart, we organized those notes in categories and then gathered them all up to write our reports or papers.  We had access to a pretty limited amount of information, even though it seemed like we cooled that seat in the library for days.

Today, the opportunity is that there is a great deal of information available on the internet.  While I miss my friendly research librarian (and I still trot off to the library now and then for the ambiance and fellowship if nothing else), it's great to be able to access so much information and data through your desktop.  The problem is, now we have A LOT MORE information that we need to store, sort, and access.

I've fooled around with a variety of research organizing methods, but generally ended up with a bunch of bookmarks I that didn't make sense, a list of notes cut out of articles, and some comments jotted in a notepad. Then, I discovered Google Notebook.  Now, I right click in the page I'm reading and click on  "Note this (Google Notebook)".  Later, when I'm ready to review my notes, I click on the Notebook icon in the right hand corner of my browser frame and there's all my research.  I can also write a brief description of my note so I know what the link was all about in the first place.  The ability to add depth to your surfing is what pulls this away from simply bookmarking sites, since it adds intelligence and context to your research.  Did I mention you can add labels as well?

I love easy and this is easy.  Not a researcher?  Try to collect articles you want to read later, websites you don't have time to look at, and anything else you find on the web that you want to capture and return to.  Google Notebook - very cool.

        

If you're in the small business card issuing business, you may be missing a cardholder segment that holds the promise of significant transaction activity - women.

Yes, it's that simple, the economic power of women represents over $1 trillion in commercial spending each year. Not only are more women starting businesses than ever before, women are often in positions of influence when it comes to purchasing decisions AND payment methods.  

What are some of the guidelines to consider when marketing your card products to women? According to studies done by M2W, here's some information you might consider as you craft your marketing plan.

• Over 91 percent of women feel that advertisers don't understand them, therefore, don't make assumptions about your female customers until you test those assumptions using tools like focus groups or advisory boards.  
  
• About 78 percent of women use the Internet for product information before making a purchase.  When designing an internet marketing plan consider the fact that most women are serious multi-taskers and have multiple roles, therefore, the more information ties together product usefulness into those roles, the more attractive it is for women. 
  
• Pay attention to details. Women absorb detail about everything. 
  
• Be careful about coming across as patronizing in the use of graphics, color, and language.  
  
• Purchase a copy of Faith Popcorn's book "Evolution -- the Eight Truths of Marketing to Women", which continues to be a textbook on marketing strategies for this segment.  
  

The lesson to be learned is that your marketing strategies for small business may be designed in such a way as to not appeal to or worse, turn off, this significant market segment.  As you plan your next campaign, shine this light on it and see if you get a glow.  

        

A recent issue of Fast Company magazine profiled the Stanford University's d.school whose guiding principle is that design thinking can be applied to all types of challenges.  While many businesses claim that they operate in a "culture of innovation", how many of those have any of us actually worked in?

        

The news continues to be grim for credit card issuers.  According to the latest Fitch credit card data, card issuers are facing some of the biggest losses they've experienced in the past five years.  That means that there are a lot of anxious debtors our there wondering how they are going to make their credit card payments.  Which made me wonder - how are the issuers reacting?  

        

Eric Dash, writing in the NY Times today discussed how Citigroup is quietly backing off their slogan, "A Deal is a Deal" , which pledged to consumers that the issuing giant would no longer reserve the right to increase fees at any time for any reason.  Announced by top Citigroup executives last year, one could almost see John Wayne reaching out his hand to consumers and looking them straight in the eye.  Some members of Congress even went gaga over these heroic efforts to play it straight with the American public - back slapping all the way around.

        

An article in the UK's Banking Times cites Apacs (UK Payments Association) who predicts that consumers are getting closer to being able to use their cell phones as a displacement to credit cards.  The hold up has been securing the transactions, but technology like Near Field Communication (NFC) holds the promise of delivering fast, reliable, and safe mobile purchase transactions.

Once this hurdle is overcome, it may provide the final push to removing multiple plastic cards from consumers wallet and realizing payments in the virtual world.  For example, both Visa and MasterCard are supporting delinked accounts which are identified at the cardholder, not the product level.  In addition, the major U.S. issuers are consolidating their bases and there may be further consolidation looming, as consumer credit continues to soften.  In addition, two of the major issuers in the U.S., Bank of America and Chase, both own significant merchant acquiring businesses; giving them control over both ends of a transaction.

All this adds up to the possibility of consumers having one "payment identification" account which is then linked to a number of different types of payment methods.  One could select credit, debit, or prepaid for example at the POS by using the same primary account.  The card becomes superfluous to the payment transaction, which can take place in the real or virtual world including using a mobile phone. 

One can argue that this is quite a leap, from mobile phone payments to multi-tender accounts, but the promise of a true virtual wallet has been on the horizon for quite some time.  It could be that consumer acceptance and technology are maturing to the point of making this a reality.

        

Sen. Dick Durbin, (D-Ill) introduced the following legislation today regarding interchange rates:

“Under Durbin’s bill, retailers would be able to engage in collective negotiations with the providers of any electronic payment system with significant market power (i.e., 20% or more of the credit and debit card market) over the fees and terms for access to that system.  If the retailers and providers do not reach a voluntary agreement on fees and terms, the matter would be brought before a panel of three expert judges appointed by the Department of Justice Antitrust Division and the Federal Trade Commission.

These judges would investigate the fees, terms, and overall market conditions for electronic payment systems.  The judges would then order a mandatory settlement conference, and if the settlement conference failed to result in an agreement between the retailers and providers, the judges would conduct a hearing where each side would present their final offer of fees and terms.  The judges would then select the offer that most closely represented the fees and terms that would be negotiated in a fair and competitive market.  The judges’ decision would govern access to the electronic payment system for a period of 3 years, but could be superseded at any time by a voluntary agreement concluded between retailers and providers.” (http://durbin.senate.gov)

As I’m reading this, I’m imagining the scene in front of the judges’ panel, as merchants and networks duke it out in open court.  Notwithstanding whether this is or is not a good idea, the fact is that it represents the opening salvo in a regulatory battle that may change the face of interchange in the U.S. for many years to come.

Particularly if a Democrat takes the helm this November and the free market free-for-all gets stomped on, it seems more likely that relief is on the way, but at what cost?  Even though the issuers are being dragged through the mud as one big, predatory-lending group, the fact remains that interchange has been an effective, if flawed, funding mechanism for both sides of the transaction. 

We need to be cautious about throwing the baby out with the bath water, but it is certainly time for the major networks to step up to the plate with more than just additional layers of pricing.  It’s time for interchange to begin the migration to a value-based system.  Waiting too long to react and hoping it’ll all go away, may not work out very well as more legislators jump on the wagon in a political and economic environment seeking scapegoats.

        

An article in the New York Times today took a look at the fact and fiction surrounding the proper foods to eat before, during and after an athletic event for optimal performance.  The prevailing wisdom is that there is a specific methodology to the types and quantities of food and supplements which will enhance endurance and support the body's recovery.

The author interviewed a researcher and physician in Canada and his associate, both of whom are or have been competitive athletes.  Their dietary regime consists of drinking water and eating fruit.  They believe that unless you are working out at very high intensity twice a day, eating and drinking real food works just fine.

This concept got me thinking about project management and the industry that's grown up around it.  Does how we do something matter as much as what we do?  Or, has the industry created the promise and expectation that project's are better because of it? 

It's been my experience that the very best and most successful projects are those that have a good strong leader in charge, clear expectations, and enough team players to overcome the naysayers.  Then, just get out of their way. Now, this is not to say that a project doesn't require documentation, process, and communication points.   But, case in points, one of the very best project leaders I ever knew used a pencil and a pad of paper. 

Consider trying a small experiment in your shop.  Pick a project that has a relatively short duration and clear the deck.  Take out the single purpose tools and leave only a framework in place - requirements document, project timelines, milestones, and escalation procedure for example.  Then see if it works.  Better yet, try it and let me know if it works.  Real process for real projects - think about it.

        

The announcement that JPMorganChase is bringing their merchant network in-house underlines the increased value of owning both the issuer and merchant side of a payment transaction.  As the spread between issuer income and merchant expense becomes narrower, strategies like those announced by Chase this week and previously, by Bank of America, mean that these giants will have the control and muscle to come out ahead when the smoke clears in the payments market.

The ability to own both sides of the payments equation is an important step in one's ability to maintain control in a quickly transitioning market.  Consider the dynamics taking place in the U.S.:  Non-cash/check payment transactions have breached the trillion dollar wall and will continue to go higher.  Some regulatory oversight of merchant interchange fees is likely and issuers can expect new controls on pricing and fees.

The value of a payments processing network is clearly seen in the valuation of both MasterCard and Visa's companies.  The movement of payment transactions through these networks is on a sustained upward trajectory; representing billions of dollars of processing fees which will not be impacted by any change in the interchange fee structure. Chase, like Bank of America, wants sole control over those fees and sole control over those relationships.

However, with MasterCard and Visa now competitors in the network market, former partners like Chase have recognized that without this ownership, they will be subject to the vagaries of changing market dynamics.  The investment they have made in their issuer portfolios will be stepped on by the regulatory storm troopers as sentiment grows for consumer pricing and interchange fee relief.

This translates into the narrowing of the gap between issuer income and merchant fees in the current interchange structure.  Therefore, owning both sides of the relationship will be a key factor in long term profitability and strategic product enhancements that will be required in a new payments environment.