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Picking The Wrong Side Of A Fight

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Yesterday, I wrote about the two topics that are buzzing around the catalog vendor community this week (click here to read the blog post).

  1. Possible USPS postage increases.
  2. Possible requirement to collect sales tax.
Feedback on this article was distributed as follows:
  1. 100% of the feedback came from vendors in the catalog industry, and it was largely opposite of my point of view.
  2. 0% of the feedback came from actual catalogers.
Let’s address the feedback I received, in the Frequently Asked Questions (FAQ) format.


If catalogers are required to collect sales tax, annual sales will be hurt, that’s a no-brainer, correct?
  • Maybe.  Maybe not.  Time will tell.  I have measured the phenomenon for many retailers.  Retail brands open new stores in new markets all the time.  They will open a store in Omaha, and as a result, be forced to collect sales tax in all of Nebraska.  In the vast majority of cases (in fact, I cannot remember a case where this didn’t happen), the e-commerce side of the business takes a brief sales hit, then sales recover within a short period of time (often 60-90 days), and return to prior levels.  In other words, there is no long-term impact on e-commerce sales.  Your mileage may vary.
  • Remember, 85% of most sales still happen in stores … where customers willing pay sales tax.  Please keep that fact in mind – we’re in a world where you can get free shipping and no sales tax, and yet, 85% of sales still happen in retail stores, where you have to pay for gas, invest time, and then pay sales tax.
  • Did you stop purchasing MP3s from the iTunes store when Apple opened a store in your market?  Did you switch to Amazon, who offered the same item at the same price with no sales tax, or did you continue to purchase music through the iTunes store?  Be honest!

But if catalogers have to collect sales tax, at scale (i.e. everybody), then the result is different, correct?  When everybody has to do it, won’t annual sales take a 5% or 10% hit?

  • Maybe, maybe not.  When the depression started, back in Q4-2007, weak businesses were literally pushed out of business, while strong businesses (hint, Amazon) steamrolled along.  Issues do not hit all companies evenly.  If we assume that collecting sales tax will result in a dire outcome (retailers have suggesting the result is not dire), why will it happen evenly, across the board?  Might the issue push a weak business into the ground, re-distributing the demand from the weak business among strong business, thereby having no impact on strong businesses?  That’s what happened during the depression of late 2007 – mid 2009, right?  Weak businesses ceased to exist, strong businesses re-calibrated and moved on.
But sales tax collection is currently illegal, we can’t just let our laws change, we’ll damage society and hurt the consumer, right?
  • It used to be illegal for women to vote.  
  • Our response to change is more important than the change itself.
  • What will your response be?
  • Remember, you have a control group … states like Oregon that you’ll be able to measure results against.
If the USPS raises rates, won’t that cause catalogers to go out of business?
  • The USPS raised rates in the past, correct?  How did that impact your business?  Did prior rate increases cripple your business?
I don’t think you understand, Kevin.  The combination of sales tax and catalog rate increases is like an additional 25% tax on catalogers.  The impact will be fatal.
  • Is that a question?
  • This will not be fatal to catalogers.
  • This might be fatal to weak catalog businesses that sell merchandise that customers largely ignore.
  • Focus on merchandise excellence.
  • Identify channels that your target customer shops in, and take advantage of those channels.
Your blog is widely read, and you’re spreading misinformation out there to a large audience.  Why?
  • I am sharing actual project findings, based on actual customer behavior.  I have mail/holdout tests on my side.  I have e-commerce results from retail store brands forced to collect sales tax in markets where they previously did not have to collect sales tax.  I participated in the shut-down of a catalog division among a Jennifer-focused customer audience, and watched annual net sales increase on a $36,000,000 catalog ad cost reduction – think about what that does to the profit and loss statement?
  • I care deeply about my clients, and the catalog industry.  That’s why I share actual facts, not memes.
  • Let’s bring facts, based on actual purchase data from retailers, e-commerce brands, and catalogs, to the table.
Logically, it makes sense that these forces are going to destroy catalog marketers, right?
  • Since many of you are from New England, go talk to your friends at L.L. Bean (they are not a client of mine).
  • Ask L.L. Bean if their catalog business was crippled when they were forced to collect sales tax when they opened stores in new markets?
  • Ask L.L. Bean what impact the 294 prior USPS price hikes had on their catalog business?
  • Use L.L. Bean as a case study for how catalogers might respond to drastic changes.  They were not pushed out of business.  Give L.L. Bean Management a call, and have a discussion with them.  Get facts from somebody who has lived with the consequences of a sales tax burden.
Doesn’t the customer need catalogs to shop?  Sales Tax + Postage Increases = Fewer Catalogs and Fewer Shoppers, Right?
  • Ask Amazon if their customer (hint – that’s everybody) needs a catalog to shop?
  • Does Amazon’s customer in Washington State, where Amazon must collect sales tax, spend so little that it devastates Amazon’s profit and loss statement?
  • If your customer is June / Judy (age = 69-85, 52-69), yes, mail/holdout tests prove that this customer will shop less if you stop mailing her catalogs.  For this customer, sales tax increases and USPS postage increases could cause problems.
  • If your customer is June/Judy, ask yourself why you aren’t supporting the ACMA?
  • If your customer is Jennifer / Jasmine (age = 36-51, 20-35), mail/holdout tests prove that this customer will continue shopping with your brand, but at lower rates (Jennifer) or will be barely impacted at all (Jasmine) if you stop sending catalogs to her.  If your customer is Jennifer / Jasmine, go tell the USPS what to do with proposed rate increases … tell them you’ll stop spending money with them and you’ll reinvest your marketing dollars in the channels that Jennifer / Jasmine use.
  • If your customer is Jennifer / Jasmine, you are in a position of power with the USPS.
  • We need to stop acting out of fear.  We need to use the power we have to make a statement.  If the customer is Jennifer or Jasmine, we don’t have to send catalogs to her.
I thought you were a defender of the ACMA?
  • I am!
  • If you are a cataloger who caters to June / Judy, I don’t like the fact that you don’t support the ACMA!!!!!
  • But if you are a cataloger who caters to Jennifer / Jasmine, the world has changed, and your customer changed.  Print is no longer the driving force for Jennifer, and is close to irrelevant to Jasmine.  And I have data to prove it, via mail/holdout tests.

I know, some of you think I picked the wrong side of a fight.

I picked the right side of the fight.  I chose data, facts, analyses, and mail/holdout tests, to determine my position.

Ask yourself what happens to the co-ops if fewer catalogs are mailed, thanks to the USPS, thanks to having fewer current buyers due to sales tax increases?

Ask yourself what happens to printers if fewer catalogs are mailed, thanks to the USPS?

Ask yourself what happens to whatever is left of the list industry if fewer catalogs are mailed, thanks to the USPS and sales tax changes?

Now ask yourself how you will respond?  You won’t go out of business.  You will make strategic changes.  If your customer is June / Judy, you’ll make one set of changes.  If your customer is Jennifer / Jasmine, you are already making changes that the catalog vendor community is not thrilled about.

I’m just asking you to use data and facts to see issues more clearly.

Written by Kevin

April 23rd, 2013 at 3:15 am

Posted in Uncategorized

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August 2012 Google Webmaster Report

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Google Webmaster ReportIt is time for the monthly Google Webmaster report where we share all the latest Google SEO related topics of the past month and recap you on anything particularly new going on in the search results.

The ongoing WebmasterWorld thread has chatter about the PageRank update and then some discussion around weird messages about blocked pages in Google Webmaster Tools, and finally the normal ranking fluctuation chatter. Outside of that, the start of the month has been pretty quiet.

In terms of the most important Google SEO related topics, here they are in some order:

Updates:

Link Notification Debacle:

Google SEO Advice:

Google Webmaster Tools:

For the past month’s report, see the July 2012 Google webmaster report.

Forum discussion at WebmasterWorld.



Video Recap of Weekly Search Buzz :: July 20, 2012

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itunes-subscribe-video.pngFun week in search, led off by Google’s 20th employee after 13 years leaving Google to become the CEO of Yahoo, oh, she is also expecting her first child in a few months. Google released Panda for Japanese and Korean languages. SEOs cite Penguin as the reason for Google’s earnings being so high. There are web sites charging fees to remove links they have pointing to your web site. Google sent out a batch of unnatural link notifications the past day or so. Google added a download the latest links feature in Webmaster Tools. Google said, if they ignore links, it can confuse Google. Google also said, don’t make multiple sites for regions you operate in – put it all in one site. Bing added Foursquare to the Bing social bar. Google brought back author stats to Google Webmaster Tools. Google added previews to Google Webmaster Tools links. Google finally added a way to safely share access to your Google AdSense account. Firefox 14 launched with Google SSL on by default, get ready for more [not provided] in your stats. Finally, Google sunset the old Google Analytics user interface finally. That was this past week on search at the Search Engine Roundtable.

Make sure to subscribe to our video feed or subscribe directly on iTunes to be notified of these updates and download the video in the background. Here is the YouTube version of the feed:


For the original iTunes version, click here.

Search Topics of Discussion:

Please do subscribe via iTunes or on your favorite RSS reader. Don’t forget to comment below with the right answer and good luck!



Written by Barry Schwartz

July 20th, 2012 at 2:38 pm

Daily Search Forum Recap: July 19, 2012

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Here is a recap of what happened in the search forums today, through the eyes of the Search Engine Roundtable and other search forums on the web.

Search Engine Roundtable Stories:

  • Author Stats Returns To Google Webmaster Tools
    After a three month hiatus, Google has brought back Author Stats to Google Webmaster Tools.
    I personally noticed it yesterday when I was playing around with my Google Webmaster Tools account.
  • Google: Wouldn’t It Be Annoying If USPS Did Multiple Sites?
    One of the most common questions I get is, should I build a web site for each location I have a presence in?

    If I run a barber chain and I want to rank for barber in each city, should I just make a web site barber-cityname…

  • Safely Give Others Access To Your Google AdSense Account
    Finally, after years and years of requests from Google AdSense publishers, Google announced you can now control user access to Google AdSense…
  • Google+ “Share” Link Added To Google Search Results
    Now when you search in Google and you are logged in, you should see a “share” link when you mouse over Google search results. Here is a picture:
  • Google 404s The Old Google Analytics
    Google Analytics announced they have finally completely sunsetted the old version of Google Analytics.

    You can now only use the new UI (user interface) for Google Analytics. This is a really long time coming…

  • Bing Adds Foursquare Reviews To Social Bar
    Yesterday Bing announced they have added Foursquare data to the Bing social bar.

    It works pretty well.

    You search for something local, be it movie theaters, places to eat, barber shops and so on and if someone has something to say about it on Foursquare, Bing may show it…

  • Yahoo Gets Marissa Mayer A Baby Gift
    Just one day on the job and Marissa Mayer already got a baby gift for her baby, which she is expecting in October. Marissa left Googler earlier this week to take on the task of being the CEO at Yahoo

Other Great Search Forum Threads:



Written by Barry Schwartz

July 19th, 2012 at 8:00 pm

Google: Wouldn’t It Be Annoying If USPS Did Multiple Sites?

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One of the most common questions I get is, should I build a web site for each location I have a presence in?

If I run a barber chain and I want to rank for barber in each city, should I just make a web site barber-cityname…



Written by barry@rustybrick.com (Barry Schwartz)

July 19th, 2012 at 4:33 pm

Google: Wouldn’t It Be Annoying If USPS Did Multiple Sites?

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USPSOne of the most common questions I get is, should I build a web site for each location I have a presence in?

If I run a barber chain and I want to rank for barber in each city, should I just make a web site barber-cityname.com so I can rank well for each city? The answer is maybe, but Google would never tell you to go with that approach.

Google’s John Mueller gave one of the best reasons why you shouldn’t go with multiple domain names for each location. He said:

Focusing on a single website makes it much easier for our algorithms to understand your site, the services you’re providing, and the regions that you service. Splitting that into separate sites for each location that you ship to not only makes it harder for our algorithms, but also for users (imagine if the post office did that).

Yea, can you imagine if the post office did do that? It would be hard to find what you need and make it confusing for the user.

Google strongly recommends you stick with a single site with pages for each location, and a location finder tool.

If that is the approach you should take depends on your strategy.

Forum discussion at Google Webmaster Help.



Written by Barry Schwartz

July 19th, 2012 at 1:10 pm

Inventory Management Startup Stitch Labs Now Offers Shipping Through ShipStation

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stitch labs

Founded on the premise of making it easier for independent creators to interact with their customers, Stitch Labs launched to offer a cloud-based solution for small businesses that wish to manage CRM, product orders, and inventory management. Now it’s taking that a step further by helping SMBs complete the full cycle of sales transactions through an integration with Austin-based startup ShipStation to handle shipping and order fulfillment for customers.

Stitch wants to be the connective tissue between multiple sales sites and platforms, giving independent designers, makers, and manufacturers the ability to reach customers and manage supply and demand regardless of where they sold their goods. Since most of those businesses sell across multiple channels, Stitch allows them to manage inventory across all of them. To do that, it has integrated with major sales platforms such as Etsy, Shopify, and BigCommerce, allowing customers to sell across multiple sites.

Now through its partnership with ShipStation, Stitch Labs will help SMBs close the loop with customers, taking them all the way through shipping and order fulfillment. While Stitch handles all the inventory management for its customers, ShipStation will ensure that products get to SMBs’ end-customers.

Shipping options through ShipStation include FedEx, UPS, and USPS, depending on how soon products are needed and how much customers want to pay for shipping. ShipStation will also handle stuff like order import and batch label creation, as well as customer communication around tracking numbers and the like.

Stitch Labs just raised a $1 million seed investment from True Ventures in February. It’s been using that money to grow headcount, which has increased (see below) from the four cofounders to six full-time employees, with another two interns. It also plans to add even more shopping cart and marketplace integrations as time goes on.

From L to R: Robert Navarro (Lead Back-End Developer), Brandon Levey (CEO/Developer), Michelle Laham (Designer), Willo O’Brien (VP Marketing), Jared Fleitman (Data Analyst), Jake Gasaway (Director of Business Development), Camille Brenkwitz (Marketing/Community)



Written by Ryan Lawler

May 29th, 2012 at 3:00 pm

Vibrant Conferences

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You probably already know that The Forum for Cross-Channel Merchants (click here) was recently cancelled.


I’m going to go old-school on you, for a moment.

Lands’ End … 1993.  Our marketing management team (not me) attended the Catalog Conference.  This was a big deal, back in 1993.  Meetings.  Parties.  All the leading ideas … stuff like alternative delivery (i.e. somebody other than the USPS delivering catalogs to your front door), neural networks designed to optimize name selection for catalogs, best practices for negotiating great rates on list exchanges.  More Parties.  Drinks.  Stories of industry leaders consuming several drinks.  Food.

Cataloging wasn’t just at a local maxima, it was at an absolute peak of industry power!  And the place you went to partake in catalog marketing was the Catalog Conference.  Heck, it was at a point where you didn’t even go to learn anything, you just went there because it was fun and all the other people you worked with in the industry were there, too.

The Catalog Conference was eclipsed by Shop.org, Shop.org was eclipsed by Internet Retailer, and Internet Retailer will be eclipsed by something that skews mobile.

Humans want to be entertained.  They will go to any conference where they are entertained and are with like-minded colleagues.

Examples?

OneKingsLane, for instance (a Jasmine-based business with a Judy-based subset demographic, click here to learn more), has buzz … how many businesses in our industry went from $0 to a projected $200,000,000 in 2012 net sales in just three years?  We want to learn just how the heck they did that?!  One can hear those stories at vendor-based conferences (see hashtag here).  Heck, this example is from a vendor claiming to be “multi-channel”, and they created buzz!  It can be done.

When I talk about entertainment, I’m not talking about getting Conan or Colbert to speak at a conference.  No, attendees seem to want, as one conference attendee recently told me, “the next big idea”.  And they don’t want to be put to sleep while being told what the next big idea is.

I know, it’s not easy to run a conference.  I ran a series of failed conferences in 2001 and 2002. They were the most boring, information-filled conferences in history.  I know what it takes to put on a conference that is poorly attended.

The catalog industry can put on good shows … just ask the folks at NEMOA.  But the format, the content, the buzz, and the entertainment factor must be different, must be relevant for modern times.  We need to create vibrant conferences, ones that speak to the concepts of being “cross-channel” without ever mentioning the phrase “cross-channel”.  We need to market ourselves to our own industry.  Why can’t we do that?

Maybe, in our quest to build a bridge from the past to the future, we’ve forgotten how to market ourselves to ourselves?

Written by Kevin

April 18th, 2012 at 3:15 am

Dear U.S. Postal Service: Please Stop Encouraging Direct Mail!

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direct mail expensive introductory3

Yesterday, CNNMoney published an article reporting on a new U.S. Postal Service campaign that has made some of us here at HubSpot a little queasy. Calling all inbound marketers: it’ll probably make your stomachs turn a bit, too.

In a nutshell, the campaign is a push to encourage small businesses to send more direct mail (AKA junk mail), in an attempt to boost the suffering U.S. Postal Service’s revenue stream by ‘hundreds of millions of dollars.’ More direct mail? As a marketer, this is the phrase that’s supposed to make you feel a little nauseous.

USPS’ ‘Every Door Direct Mail’ Campaign

The ailing U.S. Postal Service, which reported a $5.1 billion loss for the year ended September 30, has put a year-old online tool at the forefront of its new campaign, entitled ‘Every Door Direct Mail.’ The web tool supposedly helps small businesses micro-target direct mail by allowing companies to target customers by neighborhood or zip code — no names or addresses required!

describe the imageThe program, which has been around since April 2011, charges small businesses 14.5 cents per mail piece sent and generated $153 million in revenue through December 2011. The direct mail program is estimated to raise $750 to $800 million of revenue in 2012.

The Postal Service is reported to be releasing three new television commercials to promote its new direct mail campaign starting this week, airing on CNN, local news, CBS’ “60 Minutes,” and during certain sporting events. We’re told one even features a dancer dressed in a chicken costume.

Without even getting into the obvious environmental implications of USPS’ new campaign (we’ll leave that for the eco-centric blogs to criticize), let’s chat about why USPS’ campaign isn’t the most respectable move for the Postal Service.

Direct Mail Is No Longer the Most Efficient Marketing Tactic

Direct mail, a form of outbound marketing, doesn’t exactly have a great reputation these days. Consumers are continuing to ignore these interruptive communications, and much of the junk mail people receive ends up in their trash bins. The fact is, traditional marketing strategies that businesses have long adopted — including direct mail — are less effective now that the internet has changed the way people research and shop; it’s the other marketing tactics that adapt to these changing buyer behaviors that are gaining traction among marketers.

Just consider the less obtrusive, less expensive, and more effective marketing alternatives that have cropped up under the inbound marketing umbrella. We’re talking things like search engine optimization, content creation/business blogging, and social media marketing — these tactics all leverage the ways buyers naturally research and make purchasing decisions these days, rather than interrupting them with marketing they don’t want or need. HubSpot’s recently released 2012 State of Inbound Marketing Report, which analyzes the effectiveness of various marketing channels, highlights this very discrepancy.

When asked about the average cost per lead of both inbound and outbound marketing lead channels, only 34% of marketers surveyed indicated that direct mail generated a below average cost per lead, compared to inbound channels such as blogs (52%), social media (45%), and SEO (38%).

below avg. cost per lead resized 600

Furthermore, when survey participants were asked which sources of leads had become less important to them over the last six months, direct mail topped the list, with 51% of marketers indicating it had decreased in importance, followed closely by other outbound-based channels.

direct mail less important resized 600

While we support an integrated marketing strategy that connects offline and online marketing, it’s hard to support a government organization in its attempt to coerce businesses into sending more and more junk mail, considering the fact that many smart marketers are understanding its inadequacy to help them effectively and cost-efficiently generate leads compared to other marketing alternatives.

Now, we get it — the postal service industry has obviously suffered greatly from the rise of the digital age. But surely there are better strategies to employ that adapt to the changing ways people and businesses are communicating rather than pushing adoption of an increasingly inefficient marketing method.

On the other hand, I don’t know about you, but I certainly can’t wait to find out what a dancing chicken has to do with USPS’ new direct mail campaign. While you’re using your DVR to fast-forward through the commercials between your favorite programming, be on the lookout this week.

What are your thoughts on the USPS’ direct mail push?

state-of-inbound-2012b

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Written by Brian Halligan

March 22nd, 2012 at 1:00 pm

More on the Future of Cataloging

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On Monday, we talked about the future of cataloging.  Here’s my thoughts, once again, positioned via the “Judy / Jennifer / Jasmine” persona framework:

  • In 2001, we made a decision.  Instead of allowing the online channel to grow and thrive as an independent entity, we elected to integrate it with our core business, and by doing so, we homogenized the experience, causing the online channel to reflect the core buyer we already possessed.
  • Since 2001, we decided to embrace co-ops as our primary method for acquiring new customers.  The models employed by co-ops selected 55+ rural customers, as they should, given their job is to optimize response within catalogs, catalogs preferred by 55+ rural customers.
  • This dynamic (catalog + website appeals to a 55+ rural customer … co-ops deliver 55+ rural customers that will shop online after receiving a catalog) fueled a feedback loop that, eleven years later, resulted in a customer file that is fundamentally disconnected from the average consumer in America (a person in her early 40s).
  • Now that we are disconnected from the average customer, anything new and trendy we try, stuff appealing to a customer age 18-49, simply doesn’t work when marketed to a 55+ rural customer.  This fuels the feedback loop.
  • Long-term, this feedback loop is unsustainable.
  • Toss in USPS challenges, and short-term sustainability is questioned.
  • The secret to sustainability, over the next decade, is for the catalog brand to follow an age band (50-59 year old customers) instead of following a cohort (59 year old customers that will become 69 year old customers).  This means that the catalog brand must become proficient at speaking to “Jennifer”, the current 43ish year old e-commerce / Google maven.
  • As the catalog brand switches from Judy to Jennifer, there will be a consistent reduction in catalog advertising dollars, as Jennifer buys from you for reasons largely independent of catalog marketing.
  • The catalog brand that tries to jump the bridge from Judy to Jasmine is likely to struggle.
  • The catalog brand that sets up a separate, unique brand tailored to Jasmine might experience success.
  • The catalog brand that rides Judy into the sunset may experience nice levels of profitability for a period of time, prior to an erosion of all business metrics.
  • The transition from Judy to Jennifer won’t be without struggle.  Jennifer demands free shipping, and likes discounts.  In order to fund these activities, catalogers will have to cut back on catalog housefile marketing activities to Jennifer.
  • It may be possible that the catalog brand can mail more catalogs to Judy.
The wisdom of this pivot is mentioned in this article about L.L. Bean.  I recall working at Eddie Bauer in the late 1990s.  There was a groundswell of momentum to appeal to a “younger” customer.  So, we attempted to do just that!  We swapped out images of durable forty-eight year old men standing in streams wearing jeans with shirt-less twenty-five year old men holding a canoe over their heads.  Well, that got us “younger” from a creative standpoint, but it hurt sales, significantly.  We pulled back.

That was 1998.  You didn’t have much choice back then, you were a “brand” that spoke to everybody pretty much the same way.

Today, it’s 2012.  You have a nearly infinite number of channels to play with.

The key, of course, is to not stuff a channel that Jasmine likes down Judy’s throat.

In the old CRM days, there would be a customer manager responsible for each persona.
  1. A Manager/Director responsible for growing sales among people like “Judy”.
  2. A Manager/Director responsible for growing sales among people like “Jennifer”.
  3. A Manager/Director responsible for growing sales among people like “Jasmine”.

Maybe that’s not such a bad idea today.  Put a merchant/creative/marketer in charge of each persona.  Develop independent strategies for each persona, based on the channels each persona utilizes.


It’s worth a thought, isn’t it?

Written by Kevin

March 14th, 2012 at 3:15 am