Monday, February 27, 2006

Why Is Marketing So Threatening?

It's funny how marketing as a tool is threatening to some people. First they have a very superficial understanding of marketing and, as a result, view it as superficial.

It doesn’t help that many marketing people use it superficially. Maybe marketing has an image problem. ;-)

But it’s as though some people worry that, if they admit the existence of image and perception as a problem (though in a different dimension than reality), it will somehow divert energy away from real civic problem-solving, change and improvement.

The answer, as with many things, is both/and, not either/or.

Civic improvement is crucial, in every ingredient of “place” (cultural, natural and built). It’s more important than marketing…but while improvements may generate some short-term buzz, it’s been long proven that they don’t result in a change in image or perception.

It’s because the two areas are driven by two different forces.

Image and perception are often driven by word of mouth or consumer-generated marketing. The word of mouth is often fueled by prejudice, peer pressure or ignorance and intolerance. These powerful forces often have little basis in reality.

Take racial or gender discrimination. Do we really believe they were justified by reality and they were overcome because the reality changed? These powerful forces were grounded in image and perception. Both conditions have been greatly eradicated (but not completely) by the use of good marketing techniques…yes, the sit-ins were not just defiance, they were tools to leverage awareness. The foundation of feminism began in books and articles.

Nothing replaces the need for civic improvement and problem-solving. But left unchecked, forces that fuel a poor image or perception will outweigh the impact of those improvements and threaten investment, residence, corporate citizenship and the tax base crucial to funding the civic improvements themselves.

Image isn’t about hiding the negative and promoting the positive. It’s about the balance all along that spectrum. Marketing is a tool that works hand in hand with “reality” to better define a community’s image.

Tuesday, February 21, 2006

Riding the Line

In destination marketing, there are a lot of thin lines. Articulating what Carl Sauer at UC Berkeley called "the essential character of a place," something he termed cultural landscape, is very tricky.

There is a thin line in destination marketing organizations between capturing the essential character of a destination and then branding and promoting it in a "deliverable" way to travelers for whom it will be a highly valued, satisfying experience and dumbing it down into a simulation, cute caricature or tag line.

There’s a thin line between what Dr. Dan Schilling terms as the "poetry" of civic tourism (or DCVB’s role) and the "politics" (or development of place).

There is a thin line between funky (lots of personality) and seedy. There is a thin line between a generic, manufactured sense of place and places true to their soul, like the American Tobacco Campus, West Village I, Brightleaf Square and even The Streets at Southpoint, which have all gone to great lengths and expense to retain an authentic and genuine character.

There is a thin line between being a growing, dynamic community and one that loses its soul in the process of trying to be all things to all people.

There is a thin line between being a caring, tolerant community and one so overrun with litter, poor curb appeal, aggressive panhandlers and loitering it appears unsafe.

There is a thin line between open and passionate public discourse and hostility, mean-spiritedness and political theater.

Friday, February 17, 2006

Punishing the Innocent

Years ago a friend of mine gave me a plaque with the “Six Phases of a Project”:

  1. Enthusiasm
  2. Disillusionment
  3. Panic
  4. Search for the Guilty
  5. Punishment of the Innocent, and
  6. Praise and Honors for Non-Participants.

But “Punishing the Innocent” is so pervasive it's not really funny.

Take the State’s Local Option Prepared Food Tax for instance. It was shaped by the General Assembly working with the N.C. Restaurant Association. Like the room occupancy tax, it was very well-thought through.

Then a few of the first counties to be approved for a Local Option Prepared Food Tax began to fudge on the rules. So the General Assembly pulls back and essentially puts a moratorium on additional approvals, and the Restaurant Association rescinds support under any conditions, even the 10 previously agreed upon.

So who gets punished and learns a lesson? Not the local governments that messed with the system…but all of those counties who hadn’t even been given an opportunity.

This isn’t the only example of this happening or even the worst. But it happens more often than we think, and it's unfair.

Tuesday, February 14, 2006

Cost to Taxing Visitors

For years more than a few elected officials across the country could be heard to quip that taxing visitors is painless because they can’t vote.

Recently, some business people have chimed in, but notably they almost always represent businesses that don’t collect or pay taxes, e.g., media, lawyers etc. I’ve even heard non-profits propose some businesses be taxed then turn around, when a tax is proposed on their customers, and cry foul.

People like me have always cringed and--given the opportunity--objected if for no other reason than it is so blatantly disrespectful and because we know this bit of conventional wisdom couldn’t be further from reality.

There is simply no such thing as a painless tax. Part of the reasons why occupancy taxes fund visitor promotion is to offset the drag from the tax and grow and protect revenues, then leverage greater revenues through other taxes paid by travelers such as general sales tax.

Visitors may not vote, but a tax impacts local spending and therefore jobs, personal income and even tax collections, and the local people impacted by this can vote.

But let's be real; travelers do vote…just not at the ballot box. They vote with their feet and pocketbooks by shortening trips, shifting to less expensive purchases, traveling less frequently, selecting alternate destinations and, for some at the margins, not traveling at all. Some are even beginning to lash back on principle, with websites popping up to help travelers identify where they are being gouged by taxation unrelated to tourism.

The impact is not just on the specific business being taxed. For example, travelers feeling the weight of a tax on one business, e.g., hotel rooms, will shift spending in ways that impact others like restaurants, retail stores, entertainment, sports etc.

Economists like Dr. Charles de Seve have long been able to compute the impact of a tax and specifically how much can be passed on to the consumer vs. absorbed by the business, its revenues, employees and tax contributions locally.

It's time for business leaders and elected leaders alike to demand greater respect for tax payers, whether they are local or not, whether they vote or not. Because it's respectful and because it's good business.

Thursday, February 09, 2006

DCVB Like Duke

I've always been puzzled why more than a few people resent the success of Duke University. It may be in my head, but I don't think so, and it goes beyond basketball rivalries. In this respect and hopefully some others, DCVB experiences this same reaction. Most are positive about both Duke and DCVB with positive public opinion ratings, more than a few accolades and strong stakeholder support.

My gut tells me that, for those who resent this success, it's all about money, and here's why. Both Duke and DCVB seem to engender envy and maybe jealousy over funding. Duke is exceptional at raising development funds.

DCVB is self-funded from a special tax on visitors, thanks to the late North Carolina Senator Robert Swain of Buncombe County, who worked with tourism officials in the early 1980s to pioneer a local option tax on overnight visitors. Local option means the State Legislature grants the authority to each County on a case-by-case basis with stipulations.

This special tax was created specifically for the purpose of self-funding convention and visitor bureaus and to relieve the general funds of cities and counties from that traditional responsibility. Win/win, right? Visitor promotion pays for itself, new business is drawn to the businesses collecting the tax and local governments not only benefit from the freed-up general funds but also reap a 6 to 1 return in other visitor-generated tax revenues from general sales, property and fees.

So what is there to resent? The room occupancy and tourism development tax pioneers must have believed it would serve as a template to inspire other groups and needs to wean from the general funds of local government by proposing, along with closely related and willing businesses, other special tax/self-funding solutions. This would also free up significant amounts of local general fund revenue to redirect to core services and infrastructure.

For a few this has sparked true admiration. Maybe it's human nature or maybe they are just more vocal, but it seems more than a few are gripped by resentment and jealousy accompanied by the customary back-handed compliments. A few have even tried to undermine the original intent, devise work-arounds or diversions, all of which caused the State Legislature to tighten down definitions of promotion and marketing and embed stipulations. A special sub-committee was even formed to monitor compliance.

Maybe, like some people say, this is about politics and turf. To me that's still disturbing. I prefer to believe it may be more lack of understanding or philosophical disagreement.

What's truly puzzling is the lack of energy among other groups and related businesses to replicate the model. More often energy goes into trying to cannibalize the room occupancy tax and increase the burden on travelers in other ways, instead of identifying more closely related businesses and partnerships.

What’s wrong with this picture? Instead of rewarding and emulating innovation and win/win proposals, there are grousing, snide comments, back-dooring etc. The result is cynicism instead of continued innovation of funding sources at a time when some local governments truly are strapped.

It's time to move past resentment and challenge those so tempted with the spirit of Senator Swain and those who worked with him. It's time to insist on accountability... If people feel strongly about funding for other than core services and infrastructure and there isn't a sustainable way to do it with private funding, then they need to jump in and follow Swain's model.

It's time, rather than resenting successes like Duke’s fundraising ability or DCVB's funding formula, to closely examine them as best practices and model similar solutions.

Local governments need to put a sign on the door: If you want funding, come with a self-funding solution.