As Digital Marketing’s Rules Change, So Do the Tactics

We have a limited window to figure this out, and everybody’s scrambling to do so, said a VP of marketing.

Good morning!

Reminder: I recently posted my plan to turn 21 Hats into a sustainable business. You can READ MORE HERE. The upshot is I’m asking readers to sign up as either a Paid Subscriber or as a Founding Member.

Here are today’s highlights:

• Ami Kassar says owners should think of lines of credit as insurance policies.

• Microsoft Teams is offering businesses a less expensive alternative to Zoom and Slack.

• Business travel, which was starting to open up, just got more complicated again.

• “We had December completely booked up,” says a tour operator.

MARKETING

Privacy restrictions are leading companies to try new tactics to collect customer data: “Across nearly every sector, from brewers to fast-food chains to makers of consumer products, marketers are rushing to collect their own information on consumers, seeking to build millions of detailed customer profiles. Gathering such data has long been a priority, but there is newfound urgency. Until now, most advertisers have depended heavily on data from business partners, including tech giants and ad-technology firms, to determine how to focus their ads. But all of the traditional tactics are under assault.”

• “Brands are deploying an array of tactics to persuade users to surrender data to the brand itself—loyalty programs, sweepstakes, newsletters, quizzes, polls and QR codes ...”

• “Avocados From Mexico, a nonprofit marketing organization that represents avocado growers and packers, is encouraging people to submit grocery receipts to earn points exchangeable for avocado-themed sportswear.”

• “It has managed to capture roughly 50 million device IDs—the numbers associated with mobile devices—and is working to link them to names and email addresses.”

• “The group plans to use the customer information for ad targeting and to make its ads more relevant to its customers.”

• “‘We have a limited window to figure this out, and everybody’s scrambling’ to do so, said Ivonne Kinser, vice president of marketing for the avocado group.”

• If you’re interested in digital marketing, this one’s a MUST READ.

FINANCING

Ami Kassar likes to ask entrepreneurs how much they would pay to double the size of their lines of credit: “I hear the answer: ‘I am not willing to pay a penny as I don't need it.’ I encourage those entrepreneurs to think again. Liquidity provides leverage and insurance, especially for small business owners. Try thinking about the line of credit like an insurance policy. How much life insurance do you have—and what premium do you pay for it? You are paying for the security that loan or line of credit provides you.”

• “For example, a restaurant owner could be faced with an opportunity to buy an adjoining space and expand their business but may not be able to seize that opportunity if they haven't the cash flow or liquidity on hand to support it.”

• “Almost everyone I know suffers from a short memory. When things are going well, we think it's going to be that way forever.” READ MORE

Venture capitalists hit the bottle this year: “Sales data shows more people saw the virtues of joining an online wine club when they couldn’t visit a winery in person. Alcohol aficionados found online communities with similar tastes to talk and sip whiskeys or microbrews. Workers dialed into virtual team-building exercises meant to raise everyones’ spirits with a sampling of obscure spirits. Now industry insiders wonder which of those habits have staying power post-pandemic, which will go down the drain—and what that all means for the venture-backed startups in the alcohol space that for the first time collectively raised more than $1 billion in investment this year.”

• “‘The pandemic took what would have taken 10 years to implement in the alcohol industry and changed it in one,’ [founder of Sourced Craft Cocktails Tim] Angelillo told Crunchbase News.”

• “The fast growth of direct-to-consumer products and online marketplaces like Sourced Craft Cocktails means it isn’t just the biggest names in the industry getting products in front of drinkers at a bar, or in prime real estate at a liquor store, said Taylor Foxman, founder and CEO of The Industry Collective, an advisory firm that helps grow and scale startup wine, beer and spirit brands.”

• “It was the small companies, who were agile and thirsty for success that had felt out of reach before, which adapted the fastest to getting their products to consumers in a new way, Foxman added.” READ MORE

TECHNOLOGY

Microsoft Teams is going after small businesses, offering a less expensive alternative to Zoom and Slack: “Microsoft announced Wednesday that companies can now buy a standalone version of Teams — one of its most important products and a major player in work messaging and video chat, alongside Slack and Zoom. The product, called Microsoft Teams Essentials, aims to give small or medium-sized businesses a communication hub that costs less than its competitors'.”

• “Microsoft will charge small businesses $4 per user per month for Microsoft Teams Essentials, while Zoom’s cheapest paid plan is $14.99 per user per month and Slack’s is $6.67 per user each month, when billed annually.”

• “The free version of Microsoft Teams still exists, as do the various other Microsoft 365 plans that include Teams. Teams Essentials offers longer meeting times, larger group meetings and more cloud storage.” READ MORE

THE COVID ECONOMY

Covid 19 turned Americans into cash hoarders: “Over the past two years, households have socked away close to $1.6 trillion in ‘excess savings,’ or resources they otherwise wouldn’t have been able to save before the Covid-19 crisis, according to the Federal Reserve Bank of New York. The funds are well beyond the three to six months of emergency savings generally recommended by financial advisers.”

• “While the savings rate has dropped back to 2019 levels after four consecutive quarters of record high savings, financial advisers, money managers and economists say Americans are too nervous about potential worst-case scenarios to dip into their funds.”

• “And now, with the Omicron variant of the coronavirus threatening to disrupt stability once again, many of them expect the cash hoarding to continue.” READ MORE

Hiring slowed in November: “The U.S. added 210,000 jobs in November, and the unemployment rate fell to 4.2 percent. Slower hiring clouds a recovery that also faces new Covid uncertainties. The economy over the past couple of months appears to have rebounded from a summertime slowdown caused by the Covid-19 Delta variant and supply-chain disruptions. Now, the Omicron variant threatens to slow that momentum, depending on how easily it spreads and responds to vaccines, treatments and past infection.” READ MORE

Covid could cost the tourist industry $1.6 trillion this year: “The return of stricter covid restrictions to fight the latest variant, omicron, has already left some travelers stranded. For many tourism businesses, it’s also threatening hopes of an upcoming holiday boost this year — especially after last year’s shutdowns emptied out popular destinations from the Colosseum in Rome to the resort island of Bali. ‘There was a kind of sunrise on the horizon’  earlier this year, said Tobias Warnecke, the German hotel association’s economic adviser. Now, thanks to infections and rule changes roaring back, and fears over omicron, ‘we have a lot of cancellations, and we’re on our way down.’”

• “For Golden Tours, a London tour operator that takes visitors to the Warner Bros. Studio Tour — where fans can see the sets from the Harry Potter films — trips are still going ahead but cancellations have started streaming in, according to office supervisor Frank Jacobs.”

• “‘We had December completely booked up,’ he said. ‘But now since last week, everything is changing.’” READ MORE

BUSINESS TRAVEL

Foreign travel just got complicated again: “The Omicron coronavirus variant is triggering a fresh patchwork of national travel restrictions around the world, throwing up new obstacles to overseas travel just as it was starting to bounce back from last year’s Covid-19 measures. The U.S. is toughening testing requirements for inbound travelers, including U.S. citizens. Japan and Israel are now barring almost all foreign visitors. Countries across Europe and Asia have instituted new rules for international travelers—including additional testing and quarantine requirements.”

• “While short of outright bans, the new rules make trips harder to plan and more expensive if additional testing is required.”

• “Quarantine rules can make business travel, in particular, impractical.” READ MORE

Germany has announced a lockdown for unvaccinated people: “Unvaccinated people will be banned from accessing all but the most essential businesses, such as supermarkets and pharmacies, to curb the spread of coronavirus, outgoing Chancellor Angela Merkel and her successor, Olaf Scholz, announced Thursday, following crisis talks with regional leaders. Those who have recently recovered from Covid-19 are not covered by the ban.” READ MORE

FROM OUR SPONSOR: Headsets.com

Headsets for the office or work from home: Using a quality headset helps you sound better and hear better. Plus, if you go wireless, you can walk and talk. Headsets.com has 23 years offering only the best headsets to over 1 million businesses. 21 Hats readers can try headsets for 120 days without risk (twice the normal 60 days for everyone else). LEARN MORE HERE or call 1-800-HEADSETS (800-432-3738).

RETAIL

Retail theft is becoming more brazen: “Theft is an ever-present issue for retailers. As much as $68.9 billion of products were stolen from retailers in 2019, according to one industry group. But it has become more visible, brazen and violent in recent months, forcing an industry already buffeted by pandemic lockdowns and fights over mask requirements to deal with a new problem. ‘This level of violence has taken it to a whole new level,’ said Rachel Michelin, president of the California Retailers Association.”

• “Luxury retailers in Union Square in San Francisco — the site of several high-profile robberies this year — have boarded up windows to prevent more mayhem. Best Buy warned last week that theft was lowering profit margins and said it was using QR codes for checkout in some areas so employees did not need to unlock items right away.”

• “Home Depot has ‘hardened’ its stores, putting power tools and other valuables out of reach and advising employees not to film robberies with their phones because it could escalate the situation.” READ MORE

THE 21 HATS CONVERSATION

When Buying an Unsexy Business Becomes Sexy: This week, we talk to two people who walked away from promising careers to buy blue collar businesses. Long before search funds and sweaty startups became all the rage, Bob Schwartz left a Wall Street investment banking career to buy a chain of laundromats, SuperSuds, which operates in Delaware, Maryland, Pennsylvania, and Virginia. More recently, Mills Snell left a prominent private equity firm to buy a roofing contractor, Aqua Seal Manufacturing and Roofing, which is based in Columbia, South Carolina. In this conversation, Schwartz and Snell talk about what they were thinking, what they learned about buying a business, what they’ve learned about operating a business, and whether they’re looking for an exit.

• You can listen through the 21 Hats Podcast feed.

• Or you can read the transcript and WATCH THE VIDEO.

If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren