(Sign up for your free subscription at http://www.FederalDirect.net and if you like this, please pass this along to your colleagues. To unsubscribe, email me at amtower@erols.com). Past issues available at http://www.federaldirect.net/newsletterarchives.html)

1) Amtower Off-Center Observations: VAR Wars, part 2
2) Reader's View
3) The Good, the Bad and the Ugly: Security Mags Battle for Your Bucks
4) SmartPay Credit Card Update
5) One Minute Marketing Clinic
6) Events

Amtower Off-Center Observations: VAR Wars, part 2

A little historical perspective is in order before we watch and try to learn from the busy season. In the early-mid 1990s, CompUSA made a significant play in the government market. With a DC-based team (which included VP Bill Griffin, Jim Connal, Frank Araby and Randy Jacobs, among others), CompUSA ramped up to about $140 million in government sales in about three years or so.

Then, in what could be termed a less than brilliant move, CompUSA decided to consolidate everything in Texas. Few if any of their DC-based employees opted to go, and what was a robust public sector business turned into a trickle.

If they had left the Bill Griffin led team together here in DC, it is hard to tell where they could have gone. In the meantime, CDW-G has certainly filled the void. And as Groucho said, "Outside of the improvement, nobody knows the difference."

In another rocket scientist epiphany about the same time, CompUSA bought PC Compleat, a strong contender in the 1990s robust PC catalog market. The rocket scientist part came in when they immediately changed the name to CompUSA Direct. The results: death by branding.

Corporate ego killed two profit centers out of arrogance, pure and simple. Thinking CompUSA had a stronger name (brand) than PC Compleat, they assumed catalog marketshare would grow, not erode. So instead of having two shots at the same business (the market would not have perceived PC Compleat as part of CompUSA), they ended up with one.

Brand extension (as Trout and Ries pointed out several times) is difficult to manage successfully. It usually dilutes the primary brand and creates confusion.

Lessons learned?

First, growth is incremental, and is caused by work, not noise. Second, change should be incremental, and reversed if it doesn't provide results. Third, marketshare erosion occurs quickly, and there is rarely a cure.

What's this have to do with VAR Wars 2003? There are elements of this playing out today. Look closely.

Not that I have an opinion.


A Reader's View

ATandT aside: my comments from last issue struck home with my friend Michael Brown, president of Redwood Training Associates in Austin, Texas, who wrote:

"Some of my clients are former subjects of the ancient ATandT empire who have moved on to other things and adjusted their approaches accordingly. They lament their old colleagues for whom time stopped upon divestiture in 1984 and who still think and behave as if Ma Bell rules. They call this latter group "Bell-heads." Among the symptoms: arrogance ("40 million customers are excited to hear from us"), mass marketing in what never will be a mass marketing medium ... the telephone, and failure to consider much less adapt to changing business circumstances. We may pity them, laugh at them, but frevvins sake, don't buy anything from them."

The Good, The Bad and The Ugly: Security Mags Battle for Your Bucks

The Homeland Security magazines have hit the fan, I mean, mailrooms (see Volume 2, #16 for background). That means their reps will be on the phone punishing your ears with why they are the magazine that will survive, be read, and dominate this evolving niche.

Pennwell's Homeland Security Solutions tapped in at an anemic 24 pages (volume 1 #3), but was a pretty good read. The GDS International offering, BTS (Border and Transportation Security) came in with a massive 200 pages, but we don&Mac226;t know from the masthead or website what the frequency will be. It's too much to read, and it needs an editorial index and a wheelbarrow. It is probably a coffee table annual. They also followed the current issue with an email questionnaire and subscription form.

Then there is Government Security News (from the publishers of The Hill), which will be received by approximately 39,000 security-related integrators, resellers and government buyers of security products) - a nebulous number and statement.

And Homeland Defense Journal is "your number one source for homeland (vacation?) news and information." Well, these guys have at least applied for a BPA, but their media kit doesn't have any references to how many subscribers there are.

Government Security has a similar web look to Federal Computer Week (the online poll is an outright theft!), although it is published by Primedia, not 101. And Security magazine's (from Business News Publishing) web site seems to have disappeared. First casualty?

One, maybe two of these will survive. PennWell has a good track record and Primedia has other public sector titles. The Hill just recently located the Executive branch, so they are out. And GDS is based in the UK, so they will get confused about which borders they are talking about, and start talking about "neighbours".

Too much of the same from so many who know so little about the executive branch. But they each smell a quick buck, so what the heck.

What does Amtower say about this market? It is incremental, even for publishers.

Enough already.


SmartPay Credit Card Update

SmartPay statistics are in through May, 2003. With 50,000 fewer cardholders than last year at this time (331,000 vs 384,000), we are at $10.15 billion, with the busy season still ahead. This puts us $600 million ahead of FY 2002, with 400,000 more transactions through May. The growth thus far is not extraordinary, unless you consider the fact that there are far fewer cardholders.

Call me for information on SmartPay mail list rental or licensing.


One-Minute Marketing Clinic

Federal radio ads are up as busy season really gets under way, so a couple comments are necessary.

First, I would be remiss if I didn't point out that RADIO IS EXPENSIVE, and the return is difficult to measure.

Second, if you are going to run spots, especially short (15-30 second) spots, it is imperative to include response devices. I'm basically a response-driven marketer, believing that brand and marketshare follow sales. There are a few exceptions, where the brand is so well known that response device may be superfluous. But in all likelihood, your company is not Dell, Coke, or Lockheed.

A single rapid-fire mention of your 800 number doesn't count. Repeat it three times. If you give your web address and it is not readily apparent how to spell the company name - spell it out.

If you have that much money to spend, attend Government Marketing Best Practices when we announce the fall, 2003 dates.

Effective spending is often off the radar, but with real results.

And though it's not related, I got an email from a company selling talking toilet paper dispensers. The message is recorded in the TP holder, and runs when the toilet paper moves. Now if you can get the facility managers to use these, with your message, at major federal site. Think of it as marketing to a captive audience.


EVENTS

The Federal Business Council's "Federal Channels" (www.fbcinc.com) will be in Vienna, VA July 16, and in Boston (August, date tba) and Seattle (September, date tba).

The Second Annual B2G Catalog Summit will be in Chicago, November 11, 2003 at the DoubleTree O'Hare. Details are at www.FederalDirect.net. Seats are already selling for this - don't wait to reserve yours! And attendance will be limited.


As always, your comments, questions and suggestions are welcome.

Thanks
Mark Amtower

The Amtower B2G Market Report is published and copyrighted by Amtower & Company. It combines our former newsletters into a single, bi-weekly newsletter for companies targeting the government marketplace. Contact us at Amtower & Company, PO Box 339, Ashton, MD 20861-0339 (301-924-0058). This material is copyrighted and may not be duplicated, reprinted or otherwise replicated without written permission of the publisher. EMAIL subscriptions are free by request: sign up at www.FederalDirect.net.

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