Marketing logic

Over the past few months, my mom and I have discussed switching cell phone plans.


It's been an on-again, off-again conversation. Originally it came about when Tim needed some form of PDA. We considered a smartphone, since we could get a discount by signing a new contract. That, however, became moot when a kind and generous reader gave us her old PDA.


Since then, the discussion has surfaced from time to time. Tim's RAZR was giving us fits, and we wondered if it was about to shuffle off this mortal coil. But we went to a T-Mobile store and, after installing a new SIM card, the phone is functioning relatively well again. (Though Tim maintains its ability to get a signal is continually degrading.)


We discussed the option in depth when, for the first time in four years, we had an overage. A severe overage, to the tune of about $60 -- doubling our usual bill. Since I was suggesting AT&T for rollover minutes, this did seem to be the universe urging us to get on with the switch already.


Then Mom made a point: Did a once-in-four-years overage of $60 really make a new plan (costing $10 more a month) worthwhile?


Technically, no.


Rollover minutes seem like a great option. We rarely use all of our minutes, yet we pay the same rate regardless. So, the marketing logic goes, let's keep those minutes for up to a year. Then, we can be less careful, since we'll have a buffer in place. This would be great, since we have the lowest minutes plan (500) and are thus pretty strict about usage.


I was getting pretty enthused about this idea of "saving" minutes from one month to the next. The commercials were right -- I pay for the minutes, I should get to use them. Right?


Uh, maybe not.


At some point in this process, I stopped and asked myself, "If we rarely use all of our minutes, how likely is it that we'll actually use these rolled-over minutes?" It's pretty unlikely, actually.


You can argue (and I certainly have) that we could be less strict in our usage. This would allow us to take advantage of rollover minutes. Much like belongings swell to fill available space, our use could grow to fit our allowances, rather than our actual needs.


But once again, real logic has gotten lost in the shuffle. If we get used to using more cell minutes, won't that necessarily mean fewer minutes are left to roll over? Either way, it means these rollover minutes probably won't get used. The fact is, if we do change plans, we're mostly going to be paying for a perceived need, rather than a real one.


Perceived needs are how wireless companies make the big bucks. They try to convince us we need to be able to surf the web or check email anywhere for just $25-35 per month. They offer us 4 channels of TV on a 3" screen for only $15 a month. Or GPS for $10/month. (Because, if you're paying that much for the Web, you wouldn't want to just use Mapquest!) Whatever the latest technology, commercials tout it as the most convenient, conveniently forgetting to mention it's also the most expensive. But those bells and whistles get us into the store, if only out of morbid curiosity, and customers leave with far more than they thought they wanted -- and a helluva lot more than they needed.


But that's marketers' specialty. It's how they earn their pay. Their job is to create a need where there is none. If cell phone sales drop, they just add more gadgets and convince people to trade up. And that requires, not just skill, but their own brand of logic.


They've gotten us used to the idea that phones should do more than receive calls. They should have cameras. And play music. And sync to your computer. And have a day planner. And surf the web. And compare prices. And give directions.


But maybe the biggest coup is that they've convinced us that we need cell phones. The average person doesn't need a cell phone. Few folks do.


Okay, resident managers find it very useful. And salespeople who are in their cars a lot. But for the average person? It's a convenience. A very alluring one. And marketers have gotten so far inside our heads that now we almost do the work for them.


Think about it: Do you buy so many minutes because you need to make calls? Or do you make calls because you're already paying for the minutes?


Even if you're not willing to give up your phone, here's a trick that might get you to at least rethink the value of your rate plan:


First, add all the used minutes together -- including nights, weekends and mobile-to-mobile. Divide this sum by your monthly fee. You have an overall cost per minute used. Chances are, this comes out to a pretty good deal.


But, here's the catch: How many of those calls would you still have made if you were watching your minutes or didn't have a cell at all? Probably quite a few less.


Now, think about the fact that you may be using a lot of mobile-to-mobile and night minutes simply because you have them.


So now take only daytime minutes (no night, weekend or mobile-to-mobile) and divide that by your monthly fee. My bet is this is a much closer representation of your real use of your cell phone. And I bet it's a lot more than the last figure.


Of course, I'm presuming here that all those other calls could be avoided -- which isn't probable. But do consider how many of those calls could have waited until you were by a landline, and just how much you could be saving that way. (This is the last math exercise, I promise.)


Add up the minutes of your local calls. Multiply that by the last per-minute rate you found. Now compare that to a no-frills (no caller ID, no call waiting, no nuthin but a ringing phone) landline. Here in Seattle, that costs about $15-20 after taxes.


Still, that doesn't help you on long-distance calls. But, for around 4 months before our wedding, I was on the phone with my best friend/maid of honor in Florida at least twice a week, each call a minimum of 30 minutes, and our phone bill was still only $33. That included local service and a $6 monthly charge for a cheap long distance plan.


Okay, so if we were all perfect frugalists, we'd toss our cell phones out the window right now. But judging by the lack of clattering noises, I'm going to say that most of you are hugging your phone, telling it you won't let the mean blogging lady hurt it. And that's fine. Well, all except talking to your cell phone.


I'm not saying you have to give up your cell phone. Mom and I may still switch to AT&T for the simple fact that a) $10 isn't that much to pay for peace of mind and b) the reception has to be at least marginally better than what we're getting from T-Mobile.


What I am saying, in fact, is that we need to start thinking realistically about our spending, especially on things like cell phones. We've been immersed in marketing logic. We've been trained by marketers to think of all the value we can get from our plans.


All those 'unlimited' minutes on nights and weekends? All those calls we can make to other folks with our carrier? To paraphrase my favorite, ranting, cartoon squirrel, "If all this stuff is free, why are you paying $70 a month?!"


We're trained to think of all the items we get to have at our disposal, instead of what we're actually using. And it seems to me that marketers go to great lengths to keep us from figuring out the actual cost per use.


For example, Tim and I don't text. We don't particularly like texting and see no need to pay for it. No one ever remembers this. (Once, we even got a "Merry Christmas" text from a relative that we were due to see two hours later!) And so, with forgetfulness and spam, we pay anywhere from 20 cents to $1.80 a month in text charges. Yet whenever we mention this to someone, usually to remind them not to text us, they advise us to just get a texting plan (starting at $5/month) to avoid the headache.


For the record, I actually have a friend that got so sick of trying to budget for the random texts, he actually decided to pay the extra $5 a month. Now, of course, he told me, they're getting their money's worth, since his wife has become addicted to texting. Talk about marketer's math!


I guess the real question here is whether we're paying these prices because the value is there, or whether we're finding the value because we've agreed to pay the prices. It seems like we rationalize an awful lot of things -- always with the help of commercials, telling us what new technology we need -- in order to feel okay about paying $50-100 a month.


How many people would text at the same levels (or at all) if they were charged 10 cents a pop? But since you're paying for an unlimited plan, you figure you may as well get your money's worth. Except, and maybe this is just my eternal question, if you wouldn't normally use it, are you ever really getting your money's worth?


Or is it just marketing logic at its finest?

Of strippers and snow

Not the most obvious pairing in the world, but today has included both.


Tim's friend Seth -- met through Friday night Magic -- turns 20 on Sunday. Kyle, another Magic player friend, turned 18 on Thursday. And Tim turned 30 on Friday. Quite a motley crew.


Once I found out Kyle was turning 18, I pointed out to Tim that it was his duty to take the kiddo to a strip club. Which is when we discovered that Seth had also never been. Later, Seth's friend Chad was also added to the strip-club-virgin roster.


Unfortunately, we've had quite the bad (for Seattle) weather around here lately. It snowed a little bit earlier in the week. The temperatures stayed below freezing, though, so the ice stuck around.


Then, Thursday, it snowed for a few hours. Tim and I were out celebrating his birthday a day early (so he could be down in Sumner with his family Friday). And the mall had decided to close at 5 p.m. (4 hours early) because of the snow. Some of the stores didn't even open that day! Mind-boggling.


The movie theater was staying open, after which we planned to go to Cheesecake Factory, but I was worn down. Tim was a little bummed but insisted I not push myself. Luckily, Tim was basically getting a 3-part birthday: Thursday in Seattle, Friday with family, Saturday with the boys.


As someone who grew up in Anchorage, I spent most of Thursday marveling at the city's annual reaction (read: panic) to snow. People get snowed in (I guess shovels don't exist down here), businesses close, accidents pile up. And most years we only get a couple of inches.


But every so often, we get a nice long cold snap (cold, here, being a relative term) and the snow comes several times, along with lots of ice. That's what this last week has been: snow or ice. So I avoided driving around as much as possible. I also spent the week before that feeling exhausted and worn down, which kept us off the roads.


As a result, Tim and I have saved a surprising amount of money. Rather than go grab some groceries to make dinner, we scrounged around in cupboards Granted, we didn't eat terribly healthy food -- but, then, we never do. A couple nights with nachos or some canned soup. Anything to avoid being out and about. It was a good reminder that we don't always have to spend money for food. We have odds and ends throughout the house.


Another way we saved was my energy. Based on the weather and random drivers' behavior, Mom decided she didn't want us driving down to Sumner. She was sure we'd get rear-ended and leave her without a car and with higher insurance rates.


Instead, Tim's mom sent his brother to pick us up. This meant that I didn't have the stress or fatigue that comes with driving 50 miles. We came down yesterday evening and mostly just chilled out. Tim spent some time chatting with his parents, I didn't feel so hot, so I lay down with a book.


Today at noon, Seth, Kyle and Chad showed up. I had been on the fence about going to the strip club with them. But I had a good night's sleep, and I decided it was worth it just to be a spectator at this event.


The real tipping point, though, was that they were going earlier rather than later. My energy tends to flag in the evenings. And we all agreed to start out mid-afternoon, since a big storm was predicted somewhere around 8 to midnight.


So at 3 p.m. we piled into the car and headed on over to the club in Tacoma. I spent a lot of the time laughing, as I watched the boys watch the girls. I swear, they were hypnotized.


I should actually stop and say that the girls were surprisingly good. I had heard enough about these joints so that I didn't expect much. But these girls were good dancers and definitely knew their stuff. And I have to say that a few of them impressed me with some gravity-defying pole work.


The deal was that, as a birthday present, Tim would pay for Kyle and Seth to get in, plus get each one a lap dance. But when they found out Kyle was newly 18 and at his first strip club, some guy bought him a dance. (Men seem to get awfully generous around naked women. I bet we could balance the national debt if more of us were willing to strip down now and again.)


Overall, I have to say that it was a hilarious and vaguely educational experience. I can't say I was nearly as into the entertainment as the men were. But they, themselves, were quite entertaining in their own right.


By the time the boys were ready to go -- none of us were exactly wealthy, so the money ran out quickly and several of the dancers left early, worried about the weather -- it was snowing pretty steadily.


In getting back to Tim's parents, Seth's little car was slipping around quite a bit. And the windshield refused to fully defrost. So we insisted the guys stay here, rather than have Seth risk life and limb to get to his parents' (normally a 5-minute drive, but only via a very steep hill).


So, as I type this, the boys are playing Magic the Gathering, the snow is falling pretty steadily outside, and I am still awestruck by the fact that men will pay so much money for women to sexually frustrate them. (Okay, and still slightly impressed by their moves, I'll admit it.)


Seriously, I know it's a right of passage and all, but I have never understood men that regularly go to strip clubs. I think most women can affirm this: There are lots of women out there who will sexually frustrate you for dinner and perhaps a movie.


Granted, man is a visual creature. So there is something to be said for spending money simply to look and not touch (as far as the law is concerned anyway). But it's just another way in which men and women are pretty darn divided. Most women just don't get it.


Whether you think it's degrading and another way to keep women down, or whether you're the jealous type who can't stand your man wanting to see other women naked (in which case, you better have a Power Bar because you have a long road ahead of you), or whether you're like me and just simply don't care and figure these girls gotta make a living too... Women just generally don't see the appeal of strip clubs.


That said, it's an excellent reminder that, no matter what you do well, chances are you can market it. Just a thought -- however sleazy -- for all you would-be entrepreneurs out there.

5 reasons being rich sucks

I was reading The Personal Financier's piece about accepting that he'll never be rich. It's an interesting piece that you should definitely check out. I think he makes some good points about there being certain prerequisites.


Most of us don't have the drive to be rich. We're not willing to take the risks; we don't have anything to prove, etc etc.


Okay, fine. But I have to wonder: What's so great about being rich?



Just not my style

Aside from the occasional daydream about winning the lottery, I have never really had any interest in being rich.


I know that's practically heresy in this country, but it's true. There are a lot consequences to being rich that people don't consider.

1. Your life becomes public property. Look at celebrity gossip. It's not just about actors and singers.
   
2. Never-ending pleas for money. Your mailbox would be crammed with credit card companies wooing you and charities appealing to your sense of humanity. For every charity you do donate to, there's two or three more (minimum) that you have to turn away. Would you ever stop feeling guilty about the causes you're not supporting?
   
3. Money strains friendships. Think nothing can come between you and your buddies? Try a couple million bucks. You'll lead very different lifestyles. There's awkwardness and guilt aplenty there. And if the friends are good people, you can't just be grandiose and buy them houses. That would just make it worse.
4. You'll never know who your real friends are. Once your old friends have vanished, you may have trouble knowing who likes you and who likes your money. Besides being surrounded by would-be sycophants, even other rich people probably wouldn't be friends with you if you weren't rich. (Back to having things in common.)
5. What do you do with your time? Anyone who's been unable to work for a significant amount of time knows: Being home all day, every day is bo-ring. You can travel, but eventually you'll get homesick. I love reading, but even I get sick of too much reading after a week or so of dedicated bookworming. You can't (or shouldn't) spend all your time shopping. And it's not like you can really volunteer at the local library without causing a lot of awkwardness and maybe crowds. So instead you, what, throw fund-raising luncheons? What a party.
   

I don't know... It just seems like an awfully hollow existence.


Not to mention that lots of people who are supposedly rich end up bankrupt -- Ed McMahon, Mike Tyson, etc -- because they still spend more than they earn: designer clothes, new cars, huge houses, etc.


If being rich doesn't even mean you're financially safe, what's the point?



I'm sure it's fun

I'm not saying there aren't benefits.

1. Picking any house, not worrying about price and downpayment.
2. Help keeping the place clean
3. Having a cook so we never had to worry about meals
4. Buying Tim a fully equipped Selene Mustang. Heck, this is a fantasy: Buy him an Astin Martin, a Viper and a Ferrari!
5. Travel on a whim, wherever we want.

But weighed against all the other stuff? It just seems easier to scale back a few of those fantasies and live comfortably, without so much hassle and guilt.


And I have to wonder how much healthier our country would be, economically, if more people had more modest (aka "realistic") goals. Would we have this subprime mess, or would people have bought only as much house as they needed? Would we have this credit mess, or would people care less about having ostentatious shows of expense?


Do we even know why we place such an importance on wealth? It seems so natural that I bet most people haven't actually stopped to consider why being rich is ideal.


There are obvious benefits, such as freedom from mundane money worries. But most people find ways to afford a house (the last few years notwithstanding) and a few nice things. So it can't just be about materialism. In the U.S., being rich is practically transcendental.


I'd like to put it to you all. Why does being rich have so much more meaning beyond simply having ample money?


For my part, I agree with the whole Max Weber/Protestant Worth Ethic deal. It's quite a tangent, so I won't go into it unless someone specifically wants to know. Otherwise, I'd really like to hear what your theories are.