“I believe we developed language because of our deep, inner need to complain.”– Lily Tomlin

Merriam-Webster’s Words of the Decade

What Do They Tell Us About These Last 10 Years… and What Does It Tell Us About Merriam-Webster? 

One of the grammar and vocabulary blogs I read each day is posted by Merriam-Webster. It’s generally smart and serious. It’s not as much fun as the idiotic Dictionary.com, with that website’s social justice agenda, but it is reliable and sometimes insightful. At least that’s how I always felt until I read their recent pick for 2019’s “Word of the Year.”

Here’s how it works: Once a year, they select one word for the honor – a word that they consider to be “significant for that particular year because of the frequency with which it was looked up compared to previous years.” Putting aside perennial favorites like affectand effect, they look for one that has had multiple spikes in lookups in addition to being more frequently looked up overall.

So in 2019, their Word of the Year was – are you ready?

They

Right. They. The new word for “a single person whose gender identity is nonbinary.”  According to the editors, lookups for theyhad been increasing so much over the last several years that they actually felt that it deserved the award. Here’s how they explained it: “When something so basic to a language as a personal pronoun takes on new meaning, the speakers of the language are going to notice – and they’re going to look to their dictionary for guidance.”

Oh, well.

There are actually two theories about the role of dictionaries in defining words. One theory, the prescriptive theory, argues that words should be defined as they should be used by intelligent, educated speakers. The other theory, the descriptive theory, takes the position that what matters is whether the word is commonly used, not whether it improves or degrades the language.

Take your pick. In either case, the exercise is useful for prompting discussions about shifting cultural values.

To provide fuel for your future debates on the matter, here are the nine previous Merriam-Webster words of the year, along with some of the rationale for their choices…

2010: austerity

“Economic recovery from the Great Recession was the big story at the beginning of this decade. (Indeed, the Word of the Year for 2008, in the immediate shock of the crisis, was bailout, so economic concerns even surpassed a presidential race in terms of public interest in vocabulary.)”

2011: pragmatic

“The word pragmatic seemed to catch the spirit of the times in 2011, at least in politics, where Congress passed measures to control the federal budget and President Obama oversaw explanations and rollout of the recently passed Affordable Care Act.”

2012: socialism and capitalism

“During a presidential election year, it’s no surprise that terms from politics dominated the list in 2012. For the first and only time, we named two Words of the Year: socialism and capitalism. The two words showed such a close parallel rise in our statistics that it seems likely that many dictionary users looked them up sequentially in order to compare them.”

2013: science

“[2013] was a year without a single big story like a presidential election or economic recession, and yet this word’s rise in our data accompanied a national discussion about big issues like faith in science, climate change, and Mars exploration, as well as more focused stories like identifying the DNA of Richard III and assessing the role of Malcolm Gladwell’s successful books in popularizing scientific research.”

2014: culture

“Culture conveys a kind of academic attention to systematic behavior and allows us to identify and isolate an idea, issue, or group: we speak of a ‘culture of transparency’ or ‘consumer culture.’ Culture can be either very broad (as in ‘western culture’ or ‘corporate culture’) or very specific (as in ‘postmodern culture’ or ‘Mexican culture’). It seemed that culture moved from the classroom syllabus to the conversation at large in 2014, appearing in headlines and analyses across a wide swath of topics.”

2015: -ism

“In 2015, a group of 7 words all sharing the same suffix – -ism– were looked up with significant frequency, resulting in the choice of -ism itself as the Word for the Year. Socialism was the most looked up of the seven, as presidential candidate Bernie Sanders’ identification as a ‘democratic socialist’ kept the word in the national conversation. The other six -ism words so prominent in the public’s consciousness were fascism, racism, feminism, communism, capitalism, and terrorism.”

2016: surreal

“The word surreal, defined as ‘marked by the intense irrational reality of a dream,’ was Merriam-Webster’s 2016 Word of the Year. Surreal is often looked up in moments of both tragedy and surprise, as people search for just the right word to bring order to abstract thoughts, emotions, or reactions. In 2016 lookups of the word followed the Brussels and Nice terror attacks, the Pulse shooting in Orlando, the coup attempt in Turkey, the Brexit vote, and the U.S. presidential election.”

2017: feminism

“Feminism, defined in this dictionary as ‘the theory of the political, economic, and social equality of the sexes’ and ‘organized activity on behalf of women’s rights and interests,’ was the Word of the Year in 2017. Although feminism is frequently a top lookup, 2017 was a banner year for the word: from the Women’s Marches in January to the ongoing revelations that fueled the #MeToo movement, the word feminism was in the ether that year – and in the search bar of dictionary users.”

2018: justice

“The Word of the Year in 2018 was justice, a term at the center of many of our national debates that year – debates about racial justice, social justice, criminal justice, economic justice. The question of just what exactly we mean when we use the word justice was part of the discussion. Particular technical uses of justice were also prominent, as references to the Justice Department (often referred to simply as ‘Justice’) were a constant in the news, and confirmation hearings for a new Supreme Court justice had the nation’s attention.”

“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.”– Henry Ford

Masterson’s Law: Why You Should “Fire” 10% of Your Customer Base 

You own a fledgling business. Let’s say it’s a donut shop. You’re renting a storefront with a work area, counter service, and table space for 30 customers.

After month one, you see a trend. About 80% of your customers come in from 7:00 to 9:00 am. And during those hours, every one of the 30 seats in your shop is taken.

Since there’s no room to add more seats, the arithmetic of your business is simple. If you want to increase profits (and you should), you must find a way to maximize the spending of those 30 peak-hour customers.

Following strategies used in other donut shops that you visit, you begin offering two-for-one deals on your highest-margin items to ratchet up the donuts-per-customer spending. You give even steeper discounts on take-out purchases to increase traffic from customers that won’t be occupying those valuable seats.

Sales go up by 20%. You feel good about that. Additional efforts give diminishing returns. The obvious option is to rent out the store adjacent to yours and expand into that. But you don’t have the cash to do so. And anyway, you aren’t sure you’d get enough extra business to justify the added rent.

It feels like you are stuck. But then one day you notice something.

Six of your “best’ customers, nice gray-haired ladies that arrive every morning after early morning church services, seem to be spending noticeably less than other customers. And they are staying longer.

You take note of their purchases for a week and discover that their buying habits are extremely regular. As a group, they order three inexpensive “old fashioned” donuts and six small coffees – one coffee and half a donut each. And since they are among the first to arrive, they occupy the most desirable table by the corner window and remain there, chatting happily, until 8:30.

You know from analyzing the overall spending during those hours that your average peak-hour eat-in customer buys one medium-sized coffee and 1.75 donuts for an average cost of $6. Furthermore, these average customers stay for only 15 minutes.

In other words, the clacking church ladies are spending half what they “should be” spending and staying six times longer. That’s a huge difference!

In dollar terms, it’s astonishing: $18 versus $216 for the table!

Nice as they might be, you realize that the church ladies are robbing you blind.

Pareto’s Law – also known as the 80/20 rule – tells us that 20% of a customer base will provide 80% of a business’s profit. I’ve owned or run or consulted with hundreds of businesses in dozens of industries in my career, and I’ve yet to encounter one in which this doesn’t apply.

However, I have observed that there is another percentage that is equally reliable and yet rarely discussed: Ten percent of every customer base is costing the business money.

Let’s call it Masterson’s Law in homage to Michael Masterson, an earlier pseudonymous incarnation of yours truly.

How does this come into play?

As Jay Abraham used to tell me when we worked together 30 years ago, there are only three ways to increase profits: 1. Increase the number of customers. 2. Increase the number of purchases they make. 3. Increase the amount they spend per purchase.

The valuable space the church ladies are using for 90 minutes a day is having a significantly negative impact on all three of these potential ways to increase profits.

This is not a minor problem. It is hurting your business and limiting its growth, costing you access to customers that will put dollars to the bottom line. You can’t ignore it. You have to do something.

But what can you do?

You might try to get rid of the church ladies by treating them poorly or by imposing new rules that are aimed directly at them – maybe a prohibition against “sharing.”

But implementing such measures will likely be seen as “unfriendly” by all of your customers, including the golden 20% responsible for 80% of your profits. If they see it that way, they might take their business to another donut shop. And that you definitely do not want.

The solution is to find “friendly” ways to discourage your profit-draining customers. One way to do that is to put up a carefully worded sign suggesting that during peak hours customers should be considerate of their fellow donut eaters and refrain from occupying a table for more than a half-hour. Since the stated objective is to improve the experience of “everyone,” such a request should have the desired effect.

If the church ladies are socially conscious, they will decide to find another, less-busy donut shop to enjoy their morning ritual. If they don’t, you could try something more radical, such as implementing a minimum charge for table seating. So long as it is a bit less than the average customer spend ($6 per person), there shouldn’t be any fallout.

An additional and slightly more radical tactic would be to raise prices across the board. Bump up the prices by 10% or 15%, but then offer your  good customers VIP discounts that keep their cost of coffee and donuts to the level it has always been.

With that corner table open for good customers, you’ll be making an extra $200 a day. Then you can go back to improving the customer experience for the top 20%, who will no doubt reward you with additional spending.

We’ve been talking about a donut shop, but Masterson’s Law applies to every business. And the larger the business, the more profound the effect.

My main client is in the middle of a campaign to renovate its marketing strategies towards a philosophy of customer acquisition that favors the top 20% while discouraging the bottom 10%. In this case, we are gradually raising prices for our premium services while ending advertising campaigns that are inadvertently drawing in customers that don’t have the financial resources to benefit from those services.

It’s not snobbery. It’s quite the opposite. It’s being considerate of would-be customers that can’t benefit from our best services. By revamping our advertising, we can discourage them from spending money with us that will not ultimately get them what they need – a basic financial education that they can get from the library or the internet.

Putting up a higher barrier of entry will reduce our revenues and perhaps even our profits for a year or two. But in the long run, it will enable us to provide more and better services to customers that those services can truly help.

How does this apply to you and your business?

Some percentage of your customer base – and you won’t go far wrong by assuming it’s 10% – is costing you money. They are slowing down your sales process, clogging up your customer service lines, demanding refunds almost reflexively, and ratcheting up your chargeback rates because their credit history is bad.

They aren’t bad people. But they are bad for you. By keeping them away from your business, they will find another one more suited to their wants and needs. And your business will be able to grow more profitably while serving your best customers in the best possible way.