Medical device makers are, at last, dipping their toes in the direct to consumer advertising waters. In a January 17th article in the Minneapolis Star Tribune Medical device makers get into the ad game, heating up ethics debate reporter Joe Carlson touches on the many issues presented by this development. Once Big Pharma started, most people figured it was only a matter of time. As with advertising by pharmaceutical companies, the issues run deep.
Do these ads run up costs for the health care system? The American Medical Association (AMA) says yes, and they are pushing for a ban on direct to consumer ads for prescription drugs and implantable medical devices, saying the negative impact on costs outweigh the benefits of educating consumers. Will such a ban be effective in the USA? Voluntary bans on broadcast advertising in the distilled spirits markets and similar restrictions for tobacco have seen mixed effects.
Is advertising an implantable medical device an ethical way to educate consumers, consumers who have access to an abundance of similar information on web sites for the AMA, the American Heart Association, WebMD.com and other sources? Like most marketing messages, the assertions such ads make only cover summary benefits and the critical data is often lost in the “small print”.
The FDA is running to keep up as the game changes. Currently, rules for prescription drug advertising are more stringent than they are for medical devices.
This one will be interesting to watch.
We mentioned earlier in this space, outsourcing security and regularly testing your defenses are two specific ways to get better at protecting yourself.
But here’s one approach that is plausible but rarely used. Apply deception. Deliberately plant data with enticing file names and erroneous data. When that data is used you know you not only have a breach but who the attacker might be. Chances are they are in a country where you cannot reach them but the government might want to know anyway. One example cited in Manage Like a Spymaster from The Economist is that of a bank.
one American bank placed a series of fake profiles of non- existent staff on its internal computer network, including e-mail addresses. Whenever a transfer request arrived, addressed to one of these aliases, it knew that the sender was likely to be a fraudster.
Sometimes the best defense is a good offense.
It is the Target, Home Depot and U.S. government breaches that get all the attention but in a Verizon Data Breach Report it is the little guys who get hit the most often. Companies with fewer than 100 employees bear the brunt of 71% of cyberattacks.
In a recent Wall St Journal article, Lou Shipley, president and CEO of Black Duck Software, shared his thoughts on what small businesses can do to protect themselves. If you are one of those smaller firms it might make for a worthwhile read. Even if you are not, it is probably a good investment of a few short minutes.
Some of what Shipley writes is just good business sense. If you cannot afford the expense of on-staff IT professionals then outsource your network security. The independent perspective offers more of a reality check. Using Free Open Source Software (FOSS)? Think again. Yes, some of it, like Mozilla Firefox, is quite good but it is free for a reason. Your security is not as high on their list as it is on yours.
Food for thought.
Occasionally we see it….data that deliver metrics on behavior. A recent article in the Wall St. Journal “At Work: An Executive’s Misdeeds Often Prove to Be Costly” cited a Mississippi State University , Drexel University study that suggests bad behavior by top executives can cost an average of $110 million or 1.6% of shareholder valve. More than double that amount if that executive is the CEO.
Surprising? It shouldn’t be. What is surprising is that boards often keep that executive on at the organization even though additional studies show it hurts company performance and company value.
Who are the culprits? Often they are male and older and nearly half of the instances cited in the study were reports of sexual indiscretions. Locally, Best Buy Co Inc. founder and Chairman Richard Schulze had to step down in 2012 after being accused of covering up an affair between former Chief Executive Officer Brian Dunn and a colleague. Dunn resigned. (The stock hit the $20 range after Dunn’s departure and today trades in the $33 range.)
Previous posts here have detailed just how substantially these problems can hurt smaller companies, especially those without a response plan. According to the Association of Small Business Development Centers, more than one in four businesses will have a significant crisis. The Hartford Insurance company says 43% of those who have a crisis and no crisis plan never reopen. And the Hartford study says of those that do re-open; only 29% are still operating two years later.
In the digital age there are few secrets, very little privacy and lots of good reasons to hire and retain the right people.
“You get what you pay for” is a mantra that has been with us a long time but that doesn’t keep people from complaining and wanting more than their money’s worth. The Internet has given us more and faster ways to provide feedback and we as consumers are quick to utilize those channels. From the businessman who tweeted about his rotten Hyatt stay in San Francisco (he got free room nights) to the shopper who shared a bad experience with Pottery Barn on Facebook (response time was 8 minutes), we are all quick to complain.
But better service comes with a price. You can’t expect low prices and great customer service, shares Paco Underhill retail anthropologist and author of “Why We Buy: The Science of Shopping.” in a recent Star Tribune article (Want better customer service? Quit being a cheapskate). With consumers expecting more for less, something has to give. “Customer service got lost in the process of consumers demanding cheaper prices,” said Underhill.
So which is it? In a hypercompetitive marketplace, are low prices and good customer service to be expected? How does that impact the brand? Star Tribune writer John Ewoldt thinks that WalMart gets good marks for customer service because the bar is so low in the first place.
Apple chooses to go in a different direction. Innovation is key but so are the Genius Bar, free training classes and lots of company representatives in every Apple store (try that in Macy’s!). By providing those things along with desirable, cool products Apple enables the highest prices in the industry. And record sales and profits.
The businessman in me says set expectations up front. Don’t offer what you cannot provide. It will just get worse when the customer service you offered is of poor quality. And if low prices is where you compete, that’s OK. Customers get value in different places in different ways. Just ask Apple.
Never mind that North Korea’s Supreme leader Kim Jong-un was able to get into the SONY organization’s files and embarrass Seth Rogan and a handful of SONY executives, the real culprit is organized crime and the burgeoning market for consumer financial data.
According to an article in the USA TODAY, 43% of companies had a data breach in the past year. Target, Michaels, PF Chang’s Home Depot and Neiman Marcus and a host of well-known brands are among those hacked. Also reported in that story is that data breaches are significantly under-reported.
If you don’t want to read about it in the newspaper, just listen to Steve Kroft of 60 Minutes summarize the issue.
There is no moral to this story save this. If you are a consumer, take steps to minimize your risk knowing that you cannot eliminate it entirely. If you are an organization doing business using digital data, prepare for the impact both to your finances and to your reputation. According to the experts, it is a matter of not if but when your data is breached.
News in the Wall St. Journal (paid subscription) is that the new head of Cadillac, Johan de Nysschen, will take steps to revive the brand in light of sluggish sales in the USA. His approach is practical but it may not be enough to stem the slide in sales versus the German competition from Audi, Mercedes and BMW.
The complaints? Prices are too high. Instead of reducing prices or creating an artificial stimulus via promotion, de Nysschen will reduce inventory and cut back on production. Cadillacs will now be harder to get – and resale should not be negatively affected. It is called “scarcity” and consumers will hopefully see Cadillac as more desirable because supply is more limited.
To supplement that change, de Nysschen will beef up production of SUVs, where Cadillac has no problem with slow sales. Cadillac Escalades are “flying off dealer lots”.
The final change in this brand revival is to reduce the 900 or so dealerships in the USA. Again, Cadillacs become harder to get, more exclusive.
Sustain price levels, reduce inventory and dealerships and the costs that go along with them and reinforce the most popular products. A common sense approach well short of re-positioning the brand altogether, but will it be enough? Competing with three of the world’s most successful luxury car brands is no easy task. It will be interesting to see how well this strategy plays out.