Friday, June 16, 2006

Take Me to Your Loss Leader, Earthling

The National Review's current Star Trek-themed, online fund-raising campaign has proved an easy target for mirth and derision.

At Outside the Tent, Clif sees a betrayal of principle, arguing that the magazine
has kicked to the curb its free market principles and begun shamelessly begging for the money that the NRO website couldn't earn in the marketplace.
(Clif seems to be providing much of my material lately, which can only mean his blog is better than mine--go check it out.)

And TBogg has a few suggestions for reigning in the National Review's staff budget:
no more free hair care products for Byron York, eliminate the Nacho Cheese fountain in the lunchroom and make Jonah bring his own lunch, cancel the Derb's Panty-of-the-Month Club subscription, and tell Cliff May and Victor Davis E Pluribus Unum Hanson "no more Christian Fellowship Paintball weekend retreats."
(Apparently, TBogg received an inside scoop from noted prophet Pat Robertson, since he seems to think that William Buckley is dead.)

True: I also work for a nonprofit organization, one that grubs for donations to support the worthy cause of American literature. Nevertheless, far be it from my sense of decency to leave untouched the comedic material provided by the NRO's campaign. What nearly stills my poison pen from heaping scorn on their efforts, however, is the aura of utter pathos that emanates from the fundraising appeal written by the magazine's editor Rich Lowry.

I said nearly. Then I got to this sentence (emphasis added):
... if you read National Review Online regularly and don’t subscribe to the print or digital editions of the magazine, you are in a weaker position to rebuff our appeals for help.
Um, Rich: No I'm not. And, besides, what is the bastion of conservatism doing using the same technique honed by that menacing swindler I see every day on the 6 train? You know the one--the guy whose bum leg changes from left to right and back again every few weeks.

Rich continues by offering some expert business advice:
Because—let me be frank here—we lose money. NRO is a loss leader. And here’s what’s unfortunate—the print magazine is a loss leader too. We are surrounded by loss leaders. If we ever have ideas to further our mission, they are guaranteed to be loss leaders. If your business needs advice on how to develop a loss leader, come to us. We have it down. I assure you we can help you start to lose money almost immediately. It’s our specialty. We have been doing it for 50 years and hope to keep doing it for many more.
In case you didn't get the message, Lowry is admitting that the National Review is a loss leader. Which begs the question: what exactly are these losses leading their customers to? The Ninth Circle? Kool-Aid? A weird political cult?

In the real business world, a loss leader is designed to attract customers, who will then buy items that will make a profit; by definition, loss leaders only work as such if you make a profit on something else. For example, Wal-Mart uses "everyday items" as loss leaders, knowing that their customers, once in the store, might make some purchases that are steeply marked up. Even Amazon discounts some of their books as high as 60% in the hope that book buyers will add other, more profitable items to their shopping carts.

But how are the National Review's magazine or its site or its advertising "loss leaders"? Is Lowry really claiming that all the NR's business revenues are loss leaders for their fundraising? Or, as I suspect, does Lowry, the editor for a magazine that claims to represent business and conservative interests, have no idea what this term means?

As for the fund-raiser's Star Trek theme and the promise that "NRO will launch a line of Trek-inspired merchandise" if they reach their financial goal: it seems that several NRO staff members don't even understand the meaning of those pesky business concepts copyright and trademark.
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