Banks Charge Fees for the Same Reason Dogs Lick Their Balls and Politicians Cheat…

… because they can. Don’t believe me? Read this article from the New York Times. It details how, even though they are annoyed by the fees, people are not switching banks because there is too much hassle in changing all the electronic bill paying arrangements. Banks knew this, A 2008 study showed that customers who made five or more payments online a month were 95 percent less likely “to churn,” while consumers who didn’t bank online were 43 percent more likely to leave. So why do they charge fees… because they know you won’t leave.

By the way, this is the same reason Facebook feels free to change its interface without losing customers. Once you have a large number of friends on the service, you’ll put up with the changes because your friends aren’t on the competing services. This is why G+ is having trouble taking off, and why even though periodically folks threaten to move from LiveJournal to DreamWidth, folks still stay on Livejournal or mirror their posts there… because that is where their friends are.

Businesses aren’t stupid. Greedy, yes. Stupid, no.


Branding Isn’t Just For Cattle

Another collection of lunchtime news chum articles, this time all having to do with brands:


Stirring Up the News Chum

It’s Friday at lunch, and you know what that means: Clearing out the links accumulated during lunchtime reading over the week:


Fighting for Their Share of the Pi

[OK, I had to tie this post to Pi day somehow…]

Since I wrote yesterday’s review of “The Cradle Will Rock, I’ve had unions on the brain. This comes from ripping the 1994 cast album of Cradle, and recording the vinyl of the 1964 Cradle revival (which I listened to as I recorded it), and the listening to both again this morning to check the quality of the rips. As I’ve been working, my iPod has been on shuffle of lightly played music… and thus, Cradle has continued to play. It’s now lunchtime, and as this has been rattling in my brain all morning, I’ve come to some realizations… primarily that the problems we attribute to unions are, for the most part, not the fault of the unions. There are one or two valid complaints, which I’ll mention at the end.

For example, people complain about the great benefits that union workers have that other people do not, and how these are bankrupting the companies and governments that agreed to give them. They blame the union for this, without forgetting the real culprit: the companies and government agencies that made the agreement when it didn’t make business sense. The union was just doing what unions are supposed to do: fight in the interest of their members. Businesses are supposed to be the ones making the financially prudent business decisions, and they abrogated that responsibility. But politcians never blame them for that—perhaps out of fear for the loss of contributions from those very businesses.

People blame the unions for the pension problems. But pension problems exist even with non-unionized workforces. Some of the most egregious cases in the news of late (cough, Bell, cough) are politicians, who do not have a union. Again, the problems are businesses making bad business decisions in the first place, and having a desire to impose instead of discuss. This desire to impose—the “my way or the highway”—is a major problem in both politics and business, where no one seems to be able to negotiate anymore. Hint: Negotiation means each side gives a little, and finds a middle ground. It is not each side just sticking to their position and having a game of chicken until someone blinks.

People blame the unions for strikes. But the power of a union has always been its people banding together, for people are the only tool the union has. It doesn’t own the plants. It doesn’t make the work. All it has is the skilled labor. Similarly, people blame the unions for all the intricate work rules that create so many stories, forgetting that those rules came into place because of business owners who attempted to skirt the union provisions to create classes of workers paid less or with lower benefits.

What has created many of these problems is greed. Yes, there is union greed, but a union can be as greedy as they want and get nowhere, if management doesn’t agree to their demands. Yet we never blame management for doing that. In fact, we often don’t blame big business for where their greed gets us. As has been pointed out by others, many of the executives who created our financial mess haven’t gone to jail, and still draw hefty salaries. Many of the politicians who relaxed the regulations haven’t been held accountable; in fact, there are movements to make regulations even laxer so that big business can supposedly correct the problems on its own. Politicians that abuse the pension rules still get their pensions. It seems we can’t attack the powerful and the wealthy, so our only recourse is to go after those who were just hardworking middle and lower class individuals (for the most part, and yes, there are exceptions).

I think, for many lower and middle class individuals, the hatred of unions actually boils down to jealousy. Not being union members, we wish we had the good negotiated salaries and benefits that the union workers had. Since we don’t, we don’t feel they should have them either. They should be brought down to our level. We couch this jealousy in other terms, of course, talking about the impact on business or government. The business owners hate the unions because they remind them of their bad decisions: in good times, they ignored prudent business practices and accepted inflated demands. When the times changed, they were now stuck with their bad deals.

Many businesses have never learned what some smart companies did: Treat your employees right and with respect from day 0, and you won’t have to deal with unions because your employees will never feel the need to band together.

Are unions perfect? No. Although unions should be able to advise their members regarding candidates, they should not be able to contribute to political campaigns. That turns them into groups using money to influence management, and that’s wrong. Dues are likely far too high for union members due to that; there should be caps on union dues so that they can only go to true union functions: negotiating, and taking care of members. There should also be caps on the salaries of union leaders — unions are supposed to represent their workers, and should be of the same class (a simple rule that a salary of a union leader can be no more than the average salary of the members of the union would probably be a good start there).


Logo Evolution

I guess I’ve been interested in logos since the mid-1970s when the kerfluffle over the NBC “N” logo occurred (i.e., the first time they killed the peacock). Of course, since then they’ve killed the peacock again, at least in the top-level corporate logo. I bring this up because of an article in this week’s Time Magazine that looked at the evolution of a number of corporate logosall prompted by Starbuck’s redesign of their logo. This prompted me to do some lunchtime web searches on logo evolution, and I thought I would share the results. Logoblink has a nice article with even more details on the Starbucks logo evolution, including loads and loads of variant and parody logos. Instantshift looks at the evolution of 20 different corporate brand logos: Apple, Shell, Xerox, BMW, Nike, IBM, Canon, Google, Kodak, Microsoft, Volkswagon, MasterCard, Firefox, Pepsi, LG, Mercedes-Benz, General Electric, Nokia, Ford, and Wal-Mart. The Autoinsurance.Com site has a nice graphic on the evolution of car company logos. Lastly, NeatORama has a nice article on the evolution of tech company logos.


Give Them an Inch…

Remember how earlier today I wrote about a number of ways in which big business wasn’t consumer friendly. Here’s a dinner-time addition: Banks are taking revenge for the new consumer-friendly rules. You know, we need to stop worried about “big government” giving it to us, and worry more about what big corporations are doing when government isn’t stepping in to stop them.


Tuesday News Chum: Corporations and Profit

Ah, lunchtime. A new year. A new set of news chum. Today’s chum seems to have a consumer-beware theme, a theme that explores how large corporations have their schemes, and why, perhaps, we shouldn’t be so trusting of big business. Just remember, as Alton Brown once said, “Ronald McDonald doesn’t give a damn about you. Neither does that little minx Wendy”:

  • From the “Nudging The Consumer To Make Profit, Part I” Department: The NY Times is reporting how Visa has manipulated card fees to make money. Heaven forfend! Basically, retailers pay a fee to the card issuer everytime the card is used. These fees vary based on the type of card (for example, Discover has low fees, and AmEx has very high fees). This article discusses how Visa charges debit cards a different fee based on whether you just sign (like a credit card), or enter a pin. Signing, which Visa encourages, generates them a higher fee. Surprised?
  • From the “Nudging The Consumer To Make Profit, Part II” Department: In the auto-biz, it’s called upselling: the practice of selling add-ons that are pre-installed so you must pay for them (a great example is the supposed window etching of a VIN or undercoatings). The Consumerist has a nice article on how Best Buy is upselling “optimization” of new PCs. Basically, they attempt to force you into paying for a questionable service that adds little value and you could probably do better yourself. Again, surprised?
  • From the “Nudging The Consumer To Make Profit, Part III” Department: So you go to relax at the movie theater. You want that full experience so you buy that popcorn. You’ve been nudged again. SmartMoney has a nice piece on 10 Things Movie Theaters Won’t Tell You, including all they ways they attempt to make more money, from special events, advertising for captive eyeballs, concessions, and so on.

However, it’s not just corporations that can do you in. Your relatives can also hurt you. Here are two examples:

  • From the “My Mother-In-Law Is So…” Department: Urged to make that joke about your in-laws? Be careful. The Jewish Journal is reporting that some in-laws are fighting back by suing their daughter-in-law, a professional comedian, for making jokes about them.
  • From the “It’s Your Husband’s Fault” Department: St. Louis Today, citing the New York Times, is reporting on a study that women with a mate get heavier. After adjusting for other variables, the 10-year weight gain for an average 140-pound woman was 20 pounds if she had a baby and a partner, 15 if she had a partner but no baby, and only 11 pounds if she was childless with no partner. The number of women with a baby but no partner was too small to draw statistically significant conclusions. They blame altered behavior.