Smart (Business) Ideas - Forward to friends, please...

Agilent Watch and Win!

2005-09-30T18:53:00.000-05:00

Very interesting way for Agilent to incentivize people to watch its educational video: give away an iPod after they watch the video (below the text on the web site).

One improvement could be to have a very easy set of questions at the end, to increase the likehood of the person actually watching the video: this is, by the way, the same idea that Seth Godin touts in his "Permission Marketing" book (he mentions his story with H&R Block)

Mau
************************************************************
http://eesof.tm.agilent.com/products/ads2005a_demo.html
*********************************************************
Enter to win an Apple iPod 20 GB and leather carrying case by viewing the video of new features in ADS 2005A.

Click to Watch Video . . .

* High Bandwidth
* Low Bandwidth

Every month until February 15th 2006, Agilent EEsof will give away one Apple iPod 20 GB and leather carrying case.

To enter the drawing, view the 8-minute video. When it finishes, you will be automatically taken to the entry page.

Winners are selected via a random drawing. It's our way of saying, "Thank you for watching."

Please see the links below for prize promotion rules and details.

Sky TV in Italy: referral campaign

2005-08-24T18:13:00.000-05:00

This pic comes from an Italian weekly TV Guide.

I was intrigued by the text on the bottom:

"Presenta un amico. Entrambi avrete un mese di abbonamento gratuito!"
"Introduce a friend. Both of you will enjoy a free month"

Interesting because it presents a benefit for both, the person that refers and the referred.

M

Impossible not to read...

2005-08-22T19:18:00.000-05:00

Now, tell me how you can avoid reading this...

Extra info: this was inside a snail mail insurance offering for a professional association.

Mau in Austin

SmartIdeas lite

2005-08-21T19:21:00.000-05:00

All,

I realized that the pressure to write lot of commentary for every posting is keeping me from posting often lot of interesting pictures I have about Smart Ideas I run into.

Countermeasure: from now on, I will make shorter postings, but more frequent than in the last period.

I hope this will continue to bring value and ideas to you.

Mau in Austin

A word about the recent frequency of postings

2005-08-20T19:51:00.000-05:00

Dear readers,

You surely noticed that lately I have been very unreliable with the frequency of my postings: while I had an almost daily schedule a couple of months ago, in the last month I posted very rarely.

I apologize for the disservice.

From now on, I will be posting at a more irregular pace: I am reviewing my personal goals for the blog and a daily posting frequency was way too much.

Thank you for your continued patronage,

Mau in Texas

How the Wall Street Journal maximizes renewal rate

2005-08-20T19:41:00.000-05:00

I love smart ways to optimize business returns.

In this post, we will have a look at a great example of optimization at work: how the Wall Street Journal (WSJ) got me to pay up 107$ for the renewal of the online subscription without me even noticing...

Few weeks ago I got an innocent looking email in my inbox (I paste it at the end of the post so you can see it in its entirety), with Subject: "Online Journal Renewal Reminder"

Of course I looked it over, opened it and said to myself "Sure, one day I'll go ahead and renew it: there is time". That was July 26th, almost ONE month ago.

Today I read thru it and saw one very interesting (and profitable) paragraph:

"As a reminder, on your renewal date, we will automatically renew your subscription for another year at the current regular subscription rate, which is now $99"

WOW! I totally forgot I gave the ok for auto-renewal one year ago ... And sure enough, on my credit card account, they debited 107$ (including taxes) on August 8th.

And most probably, I would have not even noticed on my credit card billing: there are so many items, I normally just give a glance and pay... What a fantastic example of a well architected strategy for renewal: I tip off my hat to the folks at WSJ.

Mau in Austin

Attached: the complete e-mail I received

Dear Subscriber: Your subscription to The Wall Street Journal Online is coming up for renewal in about two weeks.

I'd like to take this opportunity to remind you of just a few of the powerful benefits of your Online Journal subscription, as well as highlight some valuable recent additions to the site.

As always, the Online Journal provides you with Journal-quality news and analysis, updated 24/7, including: - Insightful, in-depth coverage of the biggest stories of the day, as they unfold - Exclusive online stories and columns - Powerful research tools- Personalized news tracking

Recently, we've expanded the length of our article archive from 30 days to 90 days. Only subscribers have free access to this valuable archive.

As a subscriber, you also have access to the Morning Brief, the latest addition to a suite of three news summary emails that also includes the Afternoon Report and the Evening Wrap. These emails, sent to your inbox every business day at 6:30am, 12:30pm, and 5:30pm ET respectively, deliver the Journal's take on the biggest stories of the day. Don't miss out on this very popular feature. Sign up now at:

Whether you're refinancing your mortgage, starting a job search, or choosing a health insurance plan, you'll find an array of helpful news articles and columns plus many more features in our expanded Personal Journal section.

Sign up for a daily Personal Journal Update email and choose from over 30 other email alerts and updates covering a wide range of topics at: In addition, we continue to expand our Quotes & Research section (also known as Briefing Books), our comprehensive source for news, profiles and financial data on nearly 30,000 U.S. and international companies.

Whether you're looking for basic company facts or conducting more detailed analysis, the Online Journal offers a wealth of information you won't find on other sites.

As a reminder, on your renewal date, we will automatically renew your subscription for another year at the current regular subscription rate, which is now $99 (or $49 for print subscribers to The Wall Street Journal). If you originally registered for the print-subscriber discount, a valid Wall Street Journal account number must be on file for your account at the time of renewal. If not, you will be charged $99, the standard annual subscription rate. If you are not a current print subscriber, and would like to subscribe to the print edition of The Wall Street Journal, please go to: http://subscribe.wsj.com/save$50 You will receive a $50 discount off your subscription to the Online Journal.

Please take a moment to make sure your credit card and personal information are still valid to avoid possible interruption of your Online Journal service. You may update this information by going to: If you have questions about your subscription, you can call Customer Service at 1-800-369-2834 or 609-514-0870 from 7am-Midnight ET, Monday-Friday. Subscribers calling from outside the United States can also find contact phone numbers by going to the following page:
http://online.wsj.com/cust_serv_contact_numbers

Thank you for your business.

Sincerely,

Todd H. Larsen
President
The Wall Street Journal Online

Airport version of Bulk Price

2005-07-28T21:31:00.000-05:00

I am always interested and appreciative when I see cross pollination between businesses.

Recently, I captured in London's airport these pictures: I like the point of offering an extra benefit to the prospect (a lower price on the books) if they purchase a quantity higher than one copy.

As usual, business is a numbers' game: even if just a fraction of the prospects will take the establishment up on the offer, it is going to be extra profit flowing directly to the bottom line for no risk and no additional investment.

Smart ideas can be found at every corner, even at airports...

Mau in Austin

Remind me, remind me, remind me

2005-07-20T08:42:00.000-05:00

ciao,

today we have an example of smart business idea from my recent trip in Italy.

Some words of introduction: in Italy, it is fairly common to purchase extra credit for your cellular phone account via calling cards, similar to those that AT&T or MCI sell in the US. There is a hidden code on the back, you scratch the card, call a special number and get your cell phone account boosted by the amount purchased. So far, so good.

Now, I am at a supermarket cash register and I notice that on the little metal separator, used to distinguish my stuff from the other persons' shopping items, there is written (see picture)
"Buy here your cell phone credit".

This is very smart! Pure profit added to the bottom line for the supermarket, all with a simple writing on the little metal object.

Does it work? It certainly does: I needed to recharge my cell phone and it surely did the trick for me: I shelled out my hard earned, cold Euro cash and got my cell phone fat with credit.

For me: convenience. For the supermarket: extra profit at no extra cost.

All in all, a pretty good idea,

Mau in Taiwan

Liked the Food? Buy the Accessories

2005-07-18T08:02:00.000-05:00

I was very intrigued by an article on the Wall Street Journal (here is the link for subscribers), published a couple of months ago, where the author described a recent strategy of some restaurants to increase their share of the wallet of their guests.

Let's see few lines from the article:

"At Chicago's Tru Restaurant, diners can pay $65 to $185 to get eight varieties of caviar in a foot-high, winding glass staircase.

Or they can order the staircase itself as a home-décor item (sans caviar) -- for $395.

Some restaurateurs are trying to leverage their signature dishes into another source of revenue, by selling unusual housewares they're served in. From polymer boxes for cooking fish to test tubes for mini-servings of soup, eateries are starting to make the items available in restaurants, stores or on the Web. "

What an interesting idea: it allows a business to increase its sales AND make the clients (or guests) even more satisfied.

And the idea can be easily extended to a variety of other occasions: flower shops could sell the vases where they hold their flowers; hair salons could sell not only the shampoos but also the professional tools they use to take care of their customer's hair; on a cruise, the cruise company could sell a souvenir from the cabin that hosted the guests (how about the number on the cabin door?)

As usual, imagination is the most important resource we have: let's keep using it.

M in Taipei

Book Review: “Priceless”

2005-07-17T09:18:00.000-05:00

All,

today I want to start something new: a book review corner.

Actually, it is not a formal book review: for that, I know you can just go to Amazon and access great reviews. Instead, I will share what I found interesting and what I jotted down in my personal notes from the book I just finished.

Today's book is “Priceless – Turning Ordinary Products into Extraordinary Experiences” by Diana LaSalle, Terry Britton.

The reference is to the MasterCard commercial, that uses the word "Priceless" to indicate those experiences that we can enjoy when we purchase the right products in the right moments. The underlying question of the book is: why so few companies take the pain to study how to make our interaction with them and their products "Priceless", meaning unforgettable, fantastic, life enhancing etc.

The book is a complement to “The Experience Economy”: it adds to it, but definitely it cannot replace it. If you have not read “The Experience Economy” I strongly encourage you to do so before reading “Priceless”

Here are my notes, in semi-random order:
Everybody just try to sell products; providing memorable experiences is still the realm of the few.

Memorable experiences on the other hand are those that create barriers against competitors and that allow to charge more. They are also the best line of defense against the biggest of evils: commoditization – the process through which a product becomes so common place that differentiation becomes difficult and the lower price rules.

Without a real experiential difference, people will flatten you to a price dimension. To have a more holistic, vivid impact, you need to provide a different level of service: personal, memorable and positive.

Companies still take the features/benefits view: almost never the experiential view: and in today’s market, providing memorable experiences is great business.

Don’t look at consumers as logical thinkers who make purchasing decisions to solve problems –someone needs to open a can so she buys a can opener – but look beyond the product to how it impacts consumers’ lives. For example, a professionally prepared tax return isn’t about complying with government regulations; it’s about peace of mind.

Delivering features/benefits impacts just the rational part of our minds. Moving to the experience level impacts the emotional (and less rational) side of the prospect. In this space, money is not that important… people very seldom remember how much they paid to enter DisneyWorld, but they know how much a pizza costs…

People will pay any price for something of incredible value. But only the customers can decide the value of something, not the manufacturer…

Even basic products like a candle or gasoline yield excellent opportunities to increase margins, by moving to an experience level. For instance, Illuminations (www.illuminations.com) is able to charge 8$ for a candle that is just a fraction more expensive to produce that the one we can buy at Wal-Mart. But because Illuminations focuses on the experience, rather than the mere feature/benefit dimension of a candle, it provides an experience to the shopper, that gladly pays 400% more for a that item.

I hope you got some value out of my note taking...

Mau in Taipei

Flying out to Taipei

2005-07-11T21:17:00.000-05:00

yep, your Italian hero never stops travelling...

Tomorrow I am on my way to Taipei, so black-out for the blog for a couple of days...

Thanks for your understanding,

Mau in Austin for few more hours

Here’s your dry cleaning, Sir. Would you like carpet cleaning with that?

2005-07-11T21:16:00.000-05:00

Kill the competition! Destroy your competitor! Become master of your marketplace by annihilating your enemies! This is the business mantra that most of companies practice and that they teach to their employees. Sad… so much energy, emotions and imagination devoted to destroying instead of creating…

I am a big fan of alliances, of creating value by putting together complementary services and products, and by inventing new markets instead of fighting to steal a slice of the pie from your current competitors.

Alliances… your imagination can run wild on this field. Let’s look at some basic principles behind how to harness the power of alliances.

Every time a service is rendered or a product is purchased, other products/services in related fields or in complementary fields can be offered to increase the satisfaction level of the client. For instance, when we go to a supermarket, a lot of other businesses (dry cleaners, key copies, etc) might be hosted in the same building to give us complementary services – it’s a great alliance between the supermarket and the smaller shops.

Another example: the company that does my dry cleaning has my good will. They render me a valuable service; they are very punctual and give a very honest price. Why don’t they forge an alliance with a complementary businesses and propose them to me? The first one that I can think of is carpet cleaning: I would love to receive a coupon for a discounted carpet cleaning from a company they trust and endorse. They could make a percentage of the deal and every body would be happy. Or how about lawn mowing or shoe repair? In the same way, the person running a lawn mowing service, after cutting the lawn, could propose a company to clean my pool, or check for termites…

Bottom line: there are more ways to grow sales and acquire new customers, excluding hating and fighting competitors: By using your imagination you can create alliances with complementary businesses and exchange referrals, with mutual benefit.

Mau in Austin

back in Texas, ready to start blogging again

2005-07-10T21:33:00.000-05:00

All,

thank you for your patience: after a 10-days cure of Italian food made by the loving hands of my mamma, I am back to my blogging duties.

Look for new stuff in the next days.

To your success,

Mau in Austin

Half Price Books At Amazon

2005-06-30T13:45:00.000-05:00

When I shop for books, Amazon provides me the best experience: I don’t have to move from my apartment, I can enjoy great discounts, and I can read the opinions of other readers before purchasing a book.

Let’s talk about this last feature: reading opinions of other readers. A brick and mortar establishment like Barnes & Nobles does not provide me any opportunity to read other people’s opinions, even if their cousins at www.bn.com have that information available.

Obviously the conflict of interest within the same company prohibits that: if I was at a Barnes and Noble store and found a book that I was interested in, but saw on www.bn.com that the same book is 15% off, I would definitely stop buying books from the actual store…

On the other hand, there is another book store that could use this weapon against Amazon. There is a book chain called Half Price Books, where people can find incredible deals. Books are half price or less: it’s not rare to find virtually new hardcover books at $2!

Half Price Books also has the advantage of providing immediate satisfaction of a great bargain to customers: the books are not shipped few days later, but available right away. I love to walk into their stores and look around for great deals. The problem: I sometimes find great looking books at super cheap prices, but I am not sure about the quality of the book... I would love to read the opinions of other readers before committing to a purchase.

And here it comes, The Idea: Half Price Books could put a few terminals in the store with Amazon as the homepage and invite people to read the opinions available there. At the same time, the prospect could see the price of books on Amazon, which is always higher than Half Price Books.

Bottom line: if Half Price Books installed internet terminals in their stores with their homepage set on Amazon.com, this would further allow customers to tap into a valuable source of information that would support their buying decisions, as well as many others for a very cheap price. It would also provide a price comparison with Amazon that would show Half Price Books being cheaper. The cost of this experiment would be minimal: take one store, install a pc terminal, and monitor the behavior of clients and sales.

Readers, what do you think about it?

Mau in Italy

Six Flags Talks Benefits, not Features

2005-06-29T15:51:00.000-05:00

Last week I took one day off and went to Six Flags in Houston: what a great day of fun. There were virtually no lines at the rides and me and my girlfriend had a fantastic time: I almost felt guilty about not having to wait at any roller coaster…

On our way to the park, a big advertising panel got my attention (see pictures).
Note: you can click on the pictures to enlarge them.

I was very surprised to see the benefits stated in such a clear way: no complicated lingo, no “features” listings, but a series of reasons in my interest for considering the purchase of the season pass.

Bottom line: I commend Six Flags for their marketing smart: what a refreshing example of intelligent communication. Too often the sentence “Features tell, Benefits sell” is used, but in this example, Six Flags put that principle really at work.

Mau in Italy

Vacation time !

2005-06-26T11:10:00.000-05:00

All,

I am taking some days off and going to Italy, chasing new blog ideas there.

I will update the blog irregularly till July 8th.

Ciao

Mau in Austin

Sleeping Beauty lives in your Database (part 2 of 2)

2005-06-23T21:19:00.000-05:00

And now the happy ending story...

A friend of mine bought a jewelry item on a web site few years ago: the company very professionally delivered the item exactly as expected. My friend was very happy about the experience.

Since then, he never bought anything anymore on this online store.

Now, out of the blue, few days ago, he got an email from them with Subject “Our way of thanking you, John” (John being the fictitious name of my friend).

The email was basically a special offer for customers only, with a discount on a specific set of products. I love this idea: it costed nothing, and actually brought value to the customers that received it. How do I know it brought value? Well, my friend really appreciated the email and actually bought 120$ of merchandise from the offer.

Think about the Return On Investment (ROI) of that email… spectacular: sent to a name that is already in the database (no cost of acquisition of very qualified name), offering a special discount on a specific collection (that maybe they had to move from inventory…) and all this using email and the internet.

I paste here a couple of screen shots from the email my friend received

(Note: click on the pictures to enlarge them)

Bottom line: your efforts in building the database of your clients are very smart and worthwhile. Not only they pay in the short term, but they keep brining value for many years to come.

Mau in Austin

Sleeping Beauty lives in your Database (part 1 of 2)

2005-06-21T22:55:00.000-05:00

This is a double posting, and we will talk about two stories: one is a sad and money losing story, that will probably wet your profit oriented eyes; the second one is a happy ending, money making and profit generating one.

I promise, at the end, they will all live happily thereafter.

All right, down to work.

I am a big fan of databases, of capturing with ethical discipline information about your customers. How do we do that? Simple, we give them a good reason to give us their names, addresses, email, phone number etc.? we will have soon a posting dedicated to this fine art of getting these information in a simple way.

The posting today will analyze one of the long term advantages of building a database of your customer base: the possibility of bringing dormant customers back to life.

As Jay Abraham says, people generally stop buying from you for one of 3 reasons:

They are unhappy about your product or service
They moved to a different job/position/situation and don't need you/your product/services anymore
They simply forgot to continue buying from you, for no particular negative reason: maybe they tried a different product and decided to keep using it (but if you asked them back, they would come), or they simply forgot to call for renewing the subscription to your service etc

Today we will talk about the third reason: people that do not have anything negative against you, but simply stopped buying from you.

In this case, very often, a simple solicitation, with a heartfelt letter or email and an incentive, can restart the relationship. For a very low cost: remember how costly is to acquire a new customer: in comparison, re-activate an old one is often dirt cheap.

But to be able to solicit a former customer, we need to know how to reach him/her: that's why the database is essential. But not sufficient: then you need a business savvy mastermind behind the database, that can use all its power.

I give you here the first story, the sad one (prepare your tissue: we will talk about many poor dollars of profit flushed down the drain... what a waste...).

For 4 years, every time I went to Taiwan for business I stayed at the same hotel: let's call it Number One Hotel. I was happy: good place, distinctive service and nice atmosphere. Last year our office moved few kilometers down the road (5 minutes by taxi, to put things in perspective).

Because now the office was further from Hotel Number One, I tried another hotel, Hotel Number Two, closer to the new office: I liked it, and now I stay always at Hotel Number Two.

The staggering thing for me is that Hotel Number One has all the information about my buying patterns in the past (I would stay at least once every 2 months), my personal information and never took the initiative to contact me. After one year of no-show, their computer could just bubble my name up and say "This is probably a lost customer: let's try to reactivate him". How? Eaaaaasssssy: propose me some special rates, propose me to pay my taxi expenses to go to the new office ($5 a day... big deal...), upgrade me in a bigger room when available.

Would I consider going back if asked? In a second! It was a great place, I was happy there ... at least this would put much more pressure on Hotel Number Two to continue to keep me.

Sad? I warned you, very sad story...

But don't feel too bad: tomorrow a happy ending story will follow

Mau in Austin

Disclaimer - I am Italian, please be patient with my English

2005-06-20T23:55:00.000-05:00

All,

tonight two entrepreneurs dear friends of mine gave me a very good feedback on the blog: they said (I paraphrase) "Mau, the content of the blog is good, but your English is not perfect. Do your readers know that you are not a native American and that your native tongue is not English? Can this hurt your credibility?"

Well, they are right... I realize now that I never told you, dear Readers... The secret has to be finally unveiled (drum roll please): I am not from Austin... I am from Italy.

So, I have to ask you a big courtesy: continue to keep a very critical approach to the content of the blog: make comments, share your ideas, agreements and disagreements with the concepts I present, attack them, support them, dissect and analyze them. It is all good, that is what I want.

But please go easy on me on my English: when I work with local entrepreneurs, they take care of turning my "Spaghetti-English" into real English and get the official writings on any marketing material right. What I write here is coming straight from me, no editing, no reviewing: pure and simple concepts in a raw format.

And hey, if you find some funny expressions along the way in my postings, laugh it up, I don't mind: actually, if I provide content AND good time, I am even happier.

Thank you for your continuous support while I keep working on this blog.

And keep the feedbacks and critiques coming: I love them.

Mau in Austin

The power of plaques

2005-06-20T23:54:00.000-05:00

I am fascinated by plaques. People love plaques. I do love my plaques: I got some at work and I display them with great pride in my cubicle.

I guess that’s because we are humans, we like to feel recognized by your peers or by somebody we respect.

Now, I am interested in extending the use of plaques in business to increase goodwill between two parties for a very low cost.

Plaques can be sent for the most original reasons: “circle of top partners” “best suppliers’ club” “Supplier of the year award”

And this last one is not invented: look at this link

(http://biz.yahoo.com/bw/050506/65073.html?.v=1)

I am sure this award cemented the relationship between Solectron and Spirent creating value for both parties: Spirent consolidated its name as authority bestowing awards to top suppliers (so next year other suppliers will compete to get the award), Solectron now has yet another plaque to show to prospect customers…both of them got some extra publicity thanks to the press release.

All this for the cost of a plaque…

Now, if you have a supplier that went the extra mile for you, why not sending a “Thank you for going the extra mile” plaque? Or if you have a distributor that sold above and beyond its quota, why not sending (along with the commission money…) a plaque to consolidate the relationship?

I wish you a prosperous week,

Mau in Austin

Ask and you shall receive + Testing: a story

2005-06-19T20:52:00.000-05:00

In many postings before we talked about testing.

If carried out in the right way, testing is a low risk, low budget way to try new approaches, strategies and tactics for your business. It has the potential to make your company virtually "error proof" when you deploying a new initiative to the general marketplace (of course, you already tested it and you know what the result will be...)

We also had a posting last week about "Ask and you shall receive": if we don't make a request, we have very little chance to get what we want. Very basic, yet very powerful.

I have a little story for you about me: I am a very avid reader. I invest about 1,000$ per year in books at Amazon.com. I enjoy the convenience of ordering online and the nice discounts I get on any book.

Now, last week I went to a local Barnes and Noble brick and mortar bookseller to pick up a book that I needed that same day. I asked to speak with a manager of the store. I gave my story and I asked for what I wanted:

“Madame, you don’t know me, but I can tell you that I spend about 1,000$ per year on your competitor Amazon web site: would you be interested in working out a deal to get my business? Of course the deal would have to give me more than what I get today from Amazon: either in discount, convenience etc”. I showed her the book I just bought at her counter: 32$ - on Amazon I can have it for 18$ (again, I needed it the same day for a gift).

The woman very professionally said “No, we are not interested in working such deals”.

Great! I failed! My little “test” ended with a big, sounding, clear “NO!”.

So? Big deal… I keep buying on Amazon, even more satisfied about the deals they hand to me.

So, was it really a failure my test? Of course not: it costed me nothing, it provided me with more information and experience and avoided me in the future to regret no having done it. All in all, I come out ahead, big time.

Mau in Austin

I tell you why you need to tell me why…

2005-06-15T21:56:00.000-05:00

It is fascinating to me the fact that some marketers still do not understand a cardinal rule of human behavior: people is more likely to do what you ask if you tell them why they should do it

Now, I am sure many of you are now thinking "Duh this is so basic that it is almost stupid". Please bear with me, I will show you that it's not that understood.

You can see it every day: messages saying "Make sure to specify our brand" or "Ask us about engine cleaning" or "Call for a free quotation on a steam carpet cleaning".

Why? Why should I do what I am asked for? People beg for reasons. Of course they should be reason based on truth: I do not condonete or condon the use of lies... I make now some imaginary examples:

"The average engine, if left unclean, breaks down after 50,000 miles. Ask us about engine cleaning" now I am motivated, I see why I should do it.

"The Federal Agency EPA says that your home carpet, if not cleaned by ultra high temperature steam, will host 1 billion parasite per square inch: they will contribute to make you and your family sick. Ask us about steam carpet cleaningÂ"

Sure sometimes there is no space: then make it ultra short "An unclean engine do break down: we can clean it"."Unclean carpets can make your children sick: we can steam clean them".

I finish the posting with a real life receipt got at the gas station: "Ask us about our service repairs". Why? Are they cheaper, faster, smarter, with longer warranty, made by more professional personnel, than others?

Till next time,

Mau in Austin

Do you want a chocolate bar with your gas (part 2 of 2)?

2005-06-15T08:46:00.000-05:00

The button would print an instant coupon with a discount on chocolate bars, candies, hot dogs etc, valid for just 5 minutes (this would exploit the Scarcity principle that Dr. Cialdini describes in “Influence” and in this article). What is the worst that can happen? The person would not walk in the store… big deal… He/she is not walking in the store anyway… so, there is only upside to this.

I can hear people asking “But how about the margins on chocolate and hot dogs?”… hmm, quick fix: just raise the price of the items by the discount you will provide… people don’t normally remember how much a Sneaker bar costs (quick, how much did you pay the last one you bought? Was it cheaper than at the station on the other side of the street?). The important thing is not to touch staples like milk and bread, as the interesting article “Mind your Pricing Cues” (link) on Harvard Business Review, explains.

The same principle for a car-wash 5-minute-valid discount. Ehi, probably just one person out of 20 (5%) washes the car: what if we could raise the percentage to 10% with a situational, time limited, mind-blurring, decision-altering, time-limited coupon (wow, what a long sentence…)? It’s free money in the bank… the washing apparatus has been bought anyway, best is to use is as much as possible.

And how about an instant coupon for windshield wiper liquid? I would love that: I always forget to buy it… a coupon would propel me into the store.

And a fresh bottle of Gatorade? Maybe “Gatorade + sneaker bar” at reduced price…

Bottom line: the Situation Permission that a gas station has can be elegantly leveraged to solicit more business from the clients, with low risk and good potential for extra, free profit.

Mau in Austin

Do you want a chocolate bar with your gas? (part 1 of 2)

2005-06-13T21:19:00.000-05:00

Here in Texas many gas stations are providing the ultimate convenience for the time-pressed modern citizen: pay at the pump with credit card.

It’s a delight: swipe the magic plastic rectangle, get accepted, prime the pump and speed away, toward new adventures.

But, alas, this is an unfortunate series of event for the gas station: they only can sell us gas in this way…

When we had to enter into the little store to pay with cash, they were able to put in motion the powerful Point Of Purchase sell mechanism: once you are about to pay, it’s very easy to sell you candies, mints, even hot dogs and coke (just ask… see previous posting “Ask and you shall receive”)

Now, the gas stations had to (reluctantly I believe) bow to the customer pressure and install the credit card payment option, which kills completely the Point Of Purchase sales opportunity and depletes the associated margins.

But they surely have an asset: me stopping at their station. As Seth describes it in his excellent “Permission Marketing” this is a Situation Permission: as I am there, they could try to leverage my time.

How could they get me to walk into the gas station anyway? Here is an idea: how about having a button on the pump (or on the touch screen after the pumping is done) that says “Push here if you feel lucky!” "Push here to see what you win today". I challenge any human being to resist pushing it…

Tomorrow we will see what this mysterious button will do…

Ask, and you shall receive

2005-06-12T20:56:00.000-05:00

This post will touch on personal development, without any intent of moving into the realm of Anthony Robbins or any other personal motivators.

I read the good book “The Aladdin factor” and I was immediately interested by the quote from W. Clement Stone: “If there is something to gain and nothing to lose by asking, by all means ask”.

This also connects to the biblical advice “Ask, and you shall receive”: which, to me, it means (among other things) that if I want something, I’d better start asking for it…

How does this connect to our marketing ideas? Well, I personally experienced several time how businesses lose potential revenue simply because they don’t ask for more sales.

For example: when we go to change the oil of the car or we get our lawn mowed, seldom we got offered a yearly subscription to the service

“Sir, I just finished to mow your lawn, as agreed. It’s cut at the desired length and it makes your yard look like a million bucks. It’s 35$.

Now, as in one month the grass will be high again, I can give you the opportunity to enroll in my subscription program: for the cost of 10 months, you get 12 monthly services to your yard, the day you decide. It’s only 350$, and you save 70$”

I did a very unscientific survey with some friends that just got their grass mowed by a neighborhood one-man company: if they were offered the deal, they would have taken it.

Think about that: just asking for more business (with a decent proposal, of course), it raises dramatically the chances of getting it.

What if your dentist offered you a yearly whitening service subscription? What if the carpet cleaner asked you if you were interested in a steam cleaning too? What if your dry cleaner asked you if you had shoes to repair?

Along this line, I admire this shop at the S. Jose airport, that eloquently ask for more business right there on the price sign:

So many opportunity untapped out there: as Einsten said in my previous post, “Imagination is more important than Knowledge” (link to post here)

Mau in Austin

Weekend ! See you on Monday

2005-06-10T18:55:00.000-05:00

We take our week-end off: see ya'll (yeah, I am in Texas!) on Monday.

Mau in Austin

“Obvious” ideas are not so… “obvious”…

2005-06-09T20:45:00.000-05:00

Once a disciple of Guerrilla Marketing comes up with an idea that is easy to implement and that looks like is going to generate some “easy” money, the recurring comment we hear is: “Oh, come on, if it was that easy, we would have already done it” or “There is no way something that trivial has not being done before” or “Ok, be serious: you would not really think that this is going to work? That we are going to make that much money with so low risk?”…

Evidently, we are trained to discount rewards that are too easy to reap: this comes from the common sense that every mom instills in her sons and daughters. But this also a dangerous path if we are not aware of its potentially negative influence on our willingness to explore new ideas.

I find fascinating the point of view of Jay Abraham (an excellent reading is his book "Getting everything you can out of all you have got") about "trivial" ideas.

Many objects that are common today are relatively recent: I am not just talking about cell phones and wireless internet (they could not exist before because the underlying technology was not available). I am talking about many other “trivial” objects that nobody thought about before…

For example: it is unthinkable to purchase a baggage without wheels today – wheels are such a natural part of the baggage. Right? Wrong! Ask your parents: when they traveled, 30 years ago, baggage did not have wheels… then one day a “genius” thought “Ehi, what about putting wheels under the very heavy bag so I might avoid getting a backache?” …

Another similar example is the snowboard: today easily 50% of the 15-30 years old skiers are actually snow boarders. Well, just 25 years ago nobody would imagine that: boards were reserved for sea (surf) or the street (skate board). Then another “genius” thought “Hmm, wouldn’t it be cool to try to put a surf on snow?” and voila, an entire “trivial” industry was born…

Morale of the story: don’t discount an idea because it looks too “trivial” – you might be on something big that you never thought about before… Great ideas don’t have to be necessarily expensive or ultra high-tech: there is still plenty to do in the domain of low-tech, everyday life.

Mau in Austin

The first baggage on the carousel is fake

2005-06-08T21:18:00.000-05:00

I saw this post from the Italian site [mini]marketing.it and it made me smile in delight: what a clever thought to get all the attention of the crowd we want to address (the post is here for our Italian speaking readers)

Airport. Baggage carousel. All the eyes are concentrated on the snake-like carpet, that start moving suddenly. We look at the carousel with great hope: we want our luggage to get the hell out of there and get back to our lives.

The first baggage is out: let me check if it's mine. Let me check very carefully.
Surprise: it's not a regular baggage - it's an advertising for a bank... and it surely got the attention of everybody looking at it.

"Everyone watched it go round and round." as bmann says...

The picture is here.

Mau in Austin

You probably are leaving the big money on the table… (Part 2 of 2)

2005-06-08T01:00:00.000-05:00

As promised yesterday, here we go with some money making ideas:

A rep from a car insurance company could be in the lounge offering a free insurance quote to the people waiting. What do they have to lose: if it results cheaper, they save money. If the quote is higher than what they currently pay, they would feel great for the good deal they are getting. Pay a smart and penniless student for a week to test it and give him/her 10% of sales: if you get a top producer, he/she will bring you a good check every week

Sell flowers for guys to bring back home to their wives: what a great convenience. Full wash: 20$. With flower: 25$. Hey, point of purchase sale, very easy to make.

The car at the end of the washing line is brought out and dried, then is handed back to the owner. Ahhh, what a waste of potential profit ! Render me another service please: check my tire, oil, washing fluid, anything. Then tell me how I am doing. If everything is fine, I feel great and love this place even more. If I need anything to be done (oil, tires too old etc), offer me a discount to a partner business. Actually, offer me to escort me there right now to fix the problem. The car-washing place could make a good percentage out of the business that it brings to the partners.

Now a wild idea: have a desk with a “Genius”: the “Genius” is a guy/gal with appetite for helping people and lot of creativity. The Genius sits in the lounge and has a “Genius” T Shirt and hat. The “Genius” has a pc connected to internet and a phone: he/she is there to (try to) solve ANY problem for free.

You need new toilet and want the cheapest on the market? Talk to the Genius and he will locate it for you.

Your pc needs repair? Talk to the Genius and he will get that setup for you

Need to do grocery shopping? No problem: the Genius can call another person that drives you to the grocery store.

The Genius would work for a percentage of the business he brings to a network of partners. After a while, I am sure it will be possible to figure out the most common requests: out of them, the network can be started

Sell me magazines, milk, bread, cokes, water

Teach me how to care about my car with special products: if I am hand washing my car, I do care about it big time. Why not having a tutorial running on a TV telling me which wax to use and how to keep the car shiny. And by the way, how about selling those products ?

Whoa, you got the idea… there is value to be created out of … nothing… and this makes me very very excited.

Till next time,

Mau in Austin

You probably are leaving big money on the table… (Part 1 of 2)

2005-06-06T22:21:00.000-05:00

I start today to talk about something that is really dear to my heart and to my profit-oriented mind: unrealized profits from hidden assets.

I am fascinated by a quote, attributed to Einstein, that says “Imagination is more important than knowledge”, because it holds the secrets to running circles around your competition: imagination allows you to make moves that your adversaries do not even fathom. And, best of all, before they can catch up with you, you are already changing again the playing field…

So, in business as in life, imagination can set us free: free to invent new source of revenues, free to explore unusual paths to equity creation, free to chart a different course for our enterprise, different from the ones everybody is fighting for. We can run a different kind of game, where we are the best players in the world.

When asked to list their assets, most companies would mention the usual stuff: our patents, our buildings, the machines we own, the cash in the bank, various investments etc.

But there is a vast amount of very valuable assets that cannot be found on the financial books: goodwill from the customer base, database of names, know-how on product design or service rendering, just to name a few of the most common ones.

Imagination, though, is the necessary tool to make a giant leap in a different dimension: that of inventing assets, creating value out of thin air. It is a little bit like magic: for the gifted in this “art”, a quick movement of the hands, some pondering about the situation and voila, the recipe to make more money is ready.

Let’s talk about some examples: few days ago I was at the car washing place. I do pay extra for getting my car hand-washed (ok ok, I am that kind of guy…). So I give the car key to the service representative and proceed to wait for 30 minutes in the lounge of the place.

I am sitting there and my profit-seeking brain is in full gear: “Wow, look at this: there are about 20 people sitting around, doing nothing. What a great asset for the car-washing company: the time of this people !”.

Tomorrow, in part 2, we will see how we can finally prove that “Time is Money!” with some ideas to generate value out of this hidden and impalpable asset: Time that people spend in your establishment.

Marketing Genius adds us to its family

2005-06-05T20:52:00.000-05:00

Another blog added us to its blog-roll.

The folks at Marketing Genius from Maple Creative are now linked to us: it is a great honor for smartideas. Thank you: we bow in respect and gratitude.

Also, Skip and his friends (Marketing Genius is a the brainchild of several contributors) have been nominated at Marketing Sherpa as Finalists at 4th annual Readers' Choice Blog Awards. You can read about it here.

Please take the time to check out their blog and cast your vote here. In our current family, they are the only nominated, so, naturally, we want to support them. Voting ends June 8th, so please hurry in supporting them.

Go Skip-Andy-Emily-Jason-James,

Mau in Austin

Scarcity Scarcity

2005-06-05T20:25:00.000-05:00

(Let's rewind the tapes one week and, thanks to the magic time machine, we go back in time to when I left Taipei. Let's close our eyes, we are there: I wrote this posting while at the airport.)

I am at the Taipei international Airport, Gate A9, waiting to board my plane to Tokyo.

Besides the fact that I still cannot understand why they only write in Chinese all the airplane information (see picture), I was fascinated by one yet another intriguing display of Social Proof and Scarcity at work ("Social Proof", "Scarcity" are 2 of the 6 principles of influence that Dr. Cialdini describes in his excellent book "Influence")

So, I am sitting and waiting, it is 10 a.m. and the plane leaves at 10:45. Boarding is at 10:20 (see picture above). All of the sudden, and for no apparent reason, a couple of people approaches the boarding gate and start a queue: my social psychology spider-sense starts to tingle – What is going to happen now? I start observing.

Another person looks around and gives up to his mental pressure: he joins the queue. Now the pressure is even higher on the rest of people (me included…) to join, to secure a fast-disappearing decent place in the queue.

Things get out of hand: the line gets super long in no time (see pic).

This is very fascinating to me because there was no reason to do that: no announcement, no request and no particular gain (other than the priviledge of standing rather than confortably sitting in the waiting chairs). But the social pressure and the scarcity principle easily bent the will of the entire group of people waiting, including the 80-something Mr. Chen sitting close to me, on his way to Dallas to visit his son. After few moments studying the queue with a Yoda-like expression, mr. Chen stands-up with the help of his cane and marches to join the crowd in the useless-line.

Marketers that can create this potent mix of social pressure together with scarcity have a very powerful device at hand: seeing the members of the crowd capitulating one by one under the pressure of the social mechanisms, one more time, left me awestruck.

Mau at Taipei airport, greeting Mr. Chen that now stands in line aided by his cane.

A Smart Idea (pun intended...)

2005-06-01T20:52:00.000-05:00

Ah, I am back, after a very good Memorial Day weekend.

Stefano (the same one of the Rentalps posting we published sometime ago: to review it, click here), sent me this interesting idea.

It comes from a brochure for Smart Car (for our non-European readers, you can find more info on this cute and trendy car here).

This idea deals with one of the biggest problems of mankind: postponing.
I like the clever way they counteract the tendency to say "yeah, I'll write down somewhere that I have to call these company": they put a Post-It note right into the brochure. Cannot get easier than that...

I don't know how much extra cost this adds to the brochure, but it surely makes it more effective.

Be Smart,

Mau in Texas

The Awesome Power of Testimonials (Part 2 of 2)

2005-05-31T08:38:00.000-05:00

So, how we do it? How do we create a little army of testimonials marching over the competition? Oh… you should not have asked… you are opening the Pandora’s box…

There are many ways to ethically employ and exploit testimonials for the good of your business: let me give you one of my favorite, that I still did not see put in practice.

If I was still in sales, I would start carrying with me a “Success Binder”, a very precious book with transparent folders that I would fill with testimonial letters. See, every time I would get a letter, I would print it (from email) or just photocopy it and put it in the binder. Then, when I am meeting my prospect, even before starting to talk about my products, I would go thru my “Success Binder” with him/her, showing how many other people I already made happy.

Of course not only text works: pictures would add to the effect. Imagine you sell cars and you go thru your pages where you have pictures of happy families jumping in their new car you sold them, pictures of a student proudly taking possession of his first automobile, and then testimonial letters.

I am telling you, if anybody pulled this technique on me, I would be sold before even starting the sales pitch.

Why nobody does it? Hmm, not sure, maybe it requires too much discipline…

Happy collection of testimonials: we will talk more about this fascinating subject in the future.

Oh, by the way, if you like this blog, feel free to write your testimonial in the Comment field :-)

Mau in Texas

Safely arrived home

2005-05-30T10:32:00.000-05:00

I made it home ok.
Today is Memorial Day: I take the day off and rest.
Back tomorrow with postings: I got some new interesting stuff to share with all of you.

Ciao

Mau in Texas

On my way back to Texas tomorrow

2005-05-26T05:35:00.000-05:00

It's that time again: finally, I can enjoy one more time the subtle yet profound pleasure of jet lag...

For one week I will be having coffee with Batman at night, watching infomercial of Ron Popeil in industrial quantity and wondering about how airplane pilots can survive past 50 years old.

Next posting will probably be from the other side of the Pacific: bye bye to Asia, Howdy to Texas.

Mau Taipei

The Awesome Power of Testimonials (Part 1 of 2)

2005-05-26T05:30:00.000-05:00

Today we start talking about a subject very close to my heart: testimonials.

Why do I like testimonials so much? Very simple: they allow me to sell my product, service, ideas faster and with less effort. This is enough to put testimonials squarely in the category of “good things in life”, together with slinky, Seinfeld DVDs and Tiramisu dessert.

As Dr. Cialdini explains in his book “Influence”, about 95% of people, in one aspect or another of their life, are imitators: only 5% are initiators. That does not mean that 95% of us are just amoebas going thru an insignificant life: it means that, if we talk about food, 95% of people would be OK with going to the same restaurant, 5% are those exploring new places. But talking about books for example, a different 95% are the followers, and still a 5% minority (albeit composed by different individuals) will be the pioneers.

Having established this interesting aspect of our societies, it becomes easier to explain why the astute marketer loves testimonials: anything that supports the impression that the rest of the population is already using that product, agreeing with the idea or using that product, will exert a magnetic pull on 95% of the population (imitators) to start doing the same.

For this reason it makes great business sense to take the time to diligently collect testimonials from your happy customers and start leveraging them as a low-cost, high impact weapon of influence.

The letters that a business receives from satisfied clients can then be put to work, like little indefatigable soldiers, attacking and demolishing the resistance barriers in the mind of the prospect (End of part I).

Mau in Taipei

Thank you - Grazie - Xie Xie for the link

2005-05-24T09:57:00.000-05:00

As it is now tradition, we send you a wave of positive thoughts and good karma to the blogs that link to us.

Today is the turn of >ilMorso<>

Grazie

Mau in Taipei

Ikea is great - Amen !

2005-05-24T09:35:00.000-05:00

(Credits: Stef in Rome sent in this story: he is the same Stef that sent us the deliciously sad Fendi story we published last week)

Stef and Alex wanted to renew their living area in their Rome apartment. They went shopping in several places not finding the good compromise between price and comfort that they were looking for. After a while they ended up checking out Ikea. In Ikea they found inexpensive solutions and bought two leather couches with delivery included in the price.

Ikea customer service kept Alex and Stef informed about their purchase, and the leather sofas were delivered in the expected time. Everybody happy.

However, the leather couch had a very strong smell: kind of like the BBO of Seinfeldenian memory.

After a coupe of days Alex called Ikea toll free customer service asking for advices. An Ikea customer center representative promptly and professionally reassured Alex. She was told that she had the choice of either returning the couches and to be reimbursed 100% (no penalty fee applied), or to order a new set (of any given model) of sofas .Having said that, the sales representative, suggested also maybe to wait few extra days to see how the “smelly” situation evolved.

Few days later, the bad smelling was still there, so Alex called Ikea again and decided to replace the couches with 2 new ones of the same model. The customer representative quickly organized the pick up, and again reassured Alex that she had the right to be satisfied or reimbursed.

Independently from the quality and price of Ikea products, that sales representative (and Ikea sales procedures) literarily sold Ikea to Stef and Alex who were extremely impressed by the professionalism of Ikea people and Ikea post sales support.

Now, thanx to that, they are getting all this good word of mouth for free…

Isn’t being nice good business too?

Mau in Taiwan

PS Today the weather in Taipei was very humid: so humid that it rained most of the time… the number of motorbike in this town is really impressive: I wonder how they could sustain the traffic if everybody was to buy a car…

I was also the victim of a gang of very dangerous Chinese criminals, that surrounded me with threatening postures... fortunately, your hero escaped safely from this most dangerous situation

Hampton Inn Gets It !

2005-05-23T07:34:00.000-05:00

Several times in the past we talked about Money Back Guarantee (or Risk Reversal), as a smart approach to make sure we get feedback from unhappy customers.

I remind you that only one person out of 25 (4%) takes the pain to contact a business to let it know about his unhappiness: the other 24 just silently walk away, bringing their money elsewhere.

So, it makes very good sense to have a mechanism with teeth that allows for these problems to surface and be dealt with.

I was positively impressed by the Hampton Inn posting on the Marketing Genius Blog (here): now I add this very nice example of Money Back Guaranteed policy (see picture below)

Think about it: for the cost (potential) of one night, they get very useful feedback from a customer that otherwise would never patronize the company anymore. What a good deal !

Thank you very much to GiuseC for the picture and the blogpost idea.
Keep thinking smart,

Mau in Taiwan

PS yesterday I was on top of the world ! I went all the way up on Taipei 101, the tallest building in the world !

So simple yet so effective

2005-05-22T10:59:00.000-05:00

In the Seoul airport in Korea I saw this elegant application of the principle of scarcity.
In the duty free area they simply notify the passing prospects that this is the last chance to do shopping before getting to the plane.

Simple, yet very effective

Mau in Taipei

Interviewing your Best Customers

2005-05-20T08:46:00.000-05:00

As Stephen Covey eloquently describes in his book The 7 habits of highly effective people, it is important to position our actions in 4 quadrants, depending on 2 variables: Important/Not Important, Urgent/Not Urgent.

The most important quadrant for the long term is the Important/Not Urgent: basically, the planning of strategies and tactics that will allow for the development of our project or vision.

Well, this is the theory then in reality we are caught living in the Urgent/Important quadrant, which is also called Emergency

Anyway, this long discourse is to bring the attention to one activity that should be in the regular planning of companies but that seldom appears: interviewing the best customers.

I give right away a very specific example: I travel a lot for work, and 99% of the people, I tend to stay in the same hotels when I go back to the same town. I spent literally hundreds of nights in the same establishments, and they know it, thanks to their database.

Or maybe they dont know it: I mean, the information is surely in their systems, but they probably are not aware of it... which basically is the same thing as not knowing it.

Now, a guest spending 100 nights in a hotel is worth about 150$ per night x 100 = 15,000$. Not shabby at all. I think it would be interesting for the hotel manager to have a 10 minutes conversation with somebody that knows so intimately his or her hotel: what would he want to see in the future, which services, which amenities etc.

Probably if hotel managers did this regularly, the widespread availability of high speed internet in the rooms would have started way before. And not as a competitive catch up with the other hotel chains, but as a competitive advantage: any traveling business person has been dreaming of high speed internet since the inception of broadband. And we were willing to pay for it!

And who knows, maybe you are even going to become friend with your best customers

Mau

the Chinese Approach: Simple and to the Point

2005-05-19T09:38:00.000-05:00

I love elegant solutions, that communicate in clear and concise way.

So when I saw this one on Saturday at the "Fashion Market" in Shanghai, it got straight into my posting planning.

Enjoy,

Mau in Taipei

Landed in Taipei

2005-05-19T09:31:00.000-05:00

here I am, landed in the island.

My flight Hong Kong to Taipei was cancelled but the Cathay Pacific agent was ultra corteous and got me to wait in the First Class lounge... whooooo

Mau

On my way to Taiwan ...

2005-05-18T08:23:00.000-05:00

all,

after a much more human day in Shanghai, tomorrow I am on my way to Taipei via Hong Kong.

Only few hours of easy flight and tasty (...) airplane food stand between me and the tallest building in the world, Taipei 101.

And you can be sure that I will be on the outlook for innovative marketing ideas from the island.

I got some good stuff from Shanghai that I will post in the next days: stay tuned.

Ciao ciao Shanghai, Nihao Taipei,

Mau

Come on Fendi, you could do money back more easily...

2005-05-18T07:49:00.000-05:00

(Some Hollywood-style dramatization)
This posting is based on a true story.
(Silence...)
it happened to my dear friend Stef in Rome (thanx Stef for the material!).

In a beautiful afternoon in the spring of 2005, Stef walks with his wife Alex into the Fendi store in the eternal city, Rome. After a brief (or not so brief...) interval, his wife chooses a beautiful leather purse, that perfectly matches her style and contributes to enhance her beauty. It is a classic model, produced in limited quantity with the serial number recorded in an internal silver plate. Stef, seeing his partner so visibly happy, does not mind shelling out the 1,050 Euros (about 1,400 USD) that it costs. Ahh... what we do for love...

So far so good, everybody happy: birds are chirping and life looks fantastic.

However (and when you hear “however” you know that the real story is about to start) 4 weeks later, in a Saturday afternoon the precious purse shows signs of poor quality control and, alas, the belt bag breaks.

Stef brings back the purse and the "Proof of Purchase" to the store asking for an explanation and expecting a quick replacement, especially due to the price paid in the first place...

We know this is a Critical Interaction Moment (CIM): customer in need of help, very vulnerable and sensitive. How does the store react? To Stef bewilderment, the lady (manager in duty) in the shop refuses to do anything to help out immediately, saying that he would have to keep the purse the way it was for the moment, and to come back in the afternoon.

After lunch the same lady accepted to keep the purse "to be checked" in the Tuscany factory and still refused to replace it.

In complete shock, Stef leaves the shop, vowing to never ever buy anything from Fendi and to make sure no friend will ever consider spending any money on that brand. On the way to home, Stef (which is a top manager in a multinational company) calls the Fendi office in Milan to report the incident: he is put in touch with a professional lady, the Milan shop sales director, who apologized profusely and offers to replace the purse right away with a new one, at absolutely no cost, no question asked.

With this information he goes back to the Roman shop where the local manager still refuses replace the purse (ehi, she surely is perseverant in her approach)

Fortunately there is a happy ending: the following Monday the same Roman manager experiences a sudden about face and replaces Alex's purse with large smiles , and apologizing profusely for the misunderstanding.

Now, how much damage this behavior brings to astore? Not only it makes customers like Stef and Alex run away, but my friends started actively bad mouthing the company, putting all his energies in trying to hurt their sales… why creating such an enemy in order to save few dollars?

Episodes like this make me smile and look to the future with anticipation: there is still lot of work for guerrilla marketers!

Till next time

Mau in Shanghai

Your Local Restaurant Is Getting your Name (and You Love It)

2005-05-17T10:53:00.000-05:00

Subject: Building a database of your customers
Principle: Get the names of your customers to communicate with them.
Who should be read on: Every business that is not yet asking personal information to its customers.

There are 6 billion people in the world, and only a little handful is giving you its money Wouldn't you want to know who these kind people are...

To my great delight I found a restaurant that is doing something about this: it still is not perfect, but at least they are moving in the right direction.

La Madeleine is a chain of French casual restaurant in Texas. The atmosphere is cordial and people are friendly: a good place where to go for a calm but not formal meal.

At the counter, they now have the form you can see in the picture: Join our Café eClub. Hmm, cool name, dandy and trendy.

Notice that they put an incentive very self serving, in my own interest: a certificate for a soup or Cesar Salade.

Very elegant the fact that they will send the certificate to the email, and not give it on the spot: in this way they are sure you are providing a real email address.

Nice also the remainder that the email could be appearing as bulk (=trash/spam): that should allow a certain percentage of subscribers to avoid losing it.

And the best for last: they ask for the birthday date !!!!!!!! They are my new hero.

La Madeleine, cest parfait !

Mau in Shanghai

PS Weather here: very hot and humid. I have been visiting customers today and I was sweating like a pig. It feels almost like summer in Texas...

They keep building everything everywhere: they build highways 7 days a week, night and day.

They are breaking ground for the biggest building in the world: last year Taiwan got it thanks to Taipei 101, but now Mainland China wants the number 1 spot!

Gabetti, a Real Estate giant using Guerrilla techniques

2005-05-15T09:17:00.000-05:00

Subject: Targeted direct mail hand delivered
Principle: Analyze where your target audience is. Reaching it can be simple and low cost.
Who should be read on: Every (new) business with a geographically defined customer-base

Large companies can be surprisingly nimble at times: it is refreshing for a guerrilla marketer like me to see huge corporations running low cost, highly effective initiatives, far away from the regular “institutional” advertising.

The example we check out today comes from Italy: Gabetti is a nationwide Real Estate company, similar to Century 21 or ReMax.

My mom (ehi, she is becoming the co-star of this blog… she brings so many interesting example to my attention…) passed me the attached flyer.

For our non-Italian speaking audience (this must be a rare blog: English language with reference to Italian stuff :) ), here’s the translation verbatim “Gabetti is looking for houses here. We have several potential customers in this area. If you have a house to sell in this building or around here, get in contact with us right away!”

I love it: the idea is crisp and simple, the delivery effective and to the point. The flyer was hand-delivered in the mail box, probably by a cash-strapped student working for 10 Euro/Dollars an hour or so.

This technique can be easily used for any business that wants to kick start revenues or revitalize a flagging season: imagine a local restaurant offering a special discount to the neighbors (maybe on a rotating basis: one block this week, one block next week), or a copy center or a dry cleaning company.

Adding a personal touch in the text of the message would make it even more effective: something sincere and wholehearted about the business and the desire to serve the neighbors in the community would strike the right chord in the bulk of the recipients.

And what’s the investment? Maybe 100$ of cash for the student working 10 straight hours delivering hundreds of perfectly targeted messages… Even less if the astute entrepreneur can use the century-old (but still very modern) art of bartering… (more on this in the future)

Mau in China

Change of name to Mau

2005-05-15T08:55:00.000-05:00

All, I decided to change my name to Mau, much closer to my real name.

Sorry for the confusion that this can create: for some time, I’ll keep signing the postings with both names.

Mau (aka Kramerilio)

Seth Godin's list of "What Every Good Marketer Knows"

2005-05-14T04:45:00.000-05:00

I found very informative the post from [mini]marketing.it (here) about Seth Godin's list "What Every Good Marketer Knows" (here on Seth's blog, here in PDF").

It is the final comment that, to me, shows that Seth really has experience "Obviously, knowing what to do is very, very different than actually doing it."...

Seth, you are so right !

Kramerilio in China (under the rain in Shanghai)

Flying to China tomorrow -

2005-05-13T09:25:00.000-05:00

Tomorrow I am on my way to China, hopefully finding tasty and interesting local new mktg approaches.

Bye Bye Korea, Hello Shanghai !

Kramerilio in Seoul

Again on Residual Value of the Customer

2005-05-13T07:39:00.000-05:00

Subjects: Lose a little in the short term, make big money in the long term
Principle: When you got a misunderstanding with your customer, be flexible, concede to gain good will and referrals

I was not sure what to blog today about and my mom come to the rescue with the perfect story about business myopia, obtuse mind and lack of big picture perception. Interested in hearing about the perfect customer relation screw up? Then read on…

My mom lives in a condominium with some 25 other families. As the sun shines on the balcony for long hours during the day, she decides to install shades to get some relief from the heat: she goes, together with another neighbor family, to a shade-shop that was referred by a friend (referrals!!!!). So far, so good: now let’s enter into the twilight zone of bizarre business behavior.

The owner show them several shades and they (my mom and the neighbor family) decide for a specific type: they then sign a contract for the installation. As the owner is with them all the time, they just get a glimpse on the contract (about 1,200 Euro or 1,500 USD of value), sign it (big error) and leave 100 Euro (130 USD) of deposit.

The day the installers show up, my mom realize they are installing a different kind of shade: right away, she calls the owner of the shop to clarify the misunderstanding. And here the trip to fantasy-land starts.

The owner, in this CIM (Critical Interaction Moment) asks (with rude manners) my mom read again the contract and make her realize that she signed to get exactly what the workers were installing. “But this is not what you showed us: we trusted you when signing the contract” “Sorry Madame, next time you should read what you sign”.

Sure, he is going to probably save some tens of Euro, refusing to concede to my mom…

But let’s see how much this Einstein of business is going to lose

My mom and her neighbors will now do anything possible to void the contract

They will never, ever consider any upgrade to the installation

From this moment on, my mom + neighbors will do anything possible to make sure he does not get a single dollar out of any family in the building. As the building is new, potentially all 25 families need shades… they are all now unreachable by this Machiavelli of shades

What could have been an alternative, saner, outcome?

Well, how about this: the owner answers in a polite way, recognizes the error in the procedure, fix the issue and get all the goodwill in the world from my mom.

My mom tells everybody in the building about this incredible person and he gets lot of extra referrals. Everybody would have been happy, very happy.

Sometime it’s too difficult to be smart…

Kramerilio in Seoul, Korea

The N3W BMW S3RI3S 3

2005-05-12T07:41:00.000-05:00

This is a funny and creative one, from Yahoo!

Few days ago I was checking my stocks to see how far I am from Bill Gates (full disclosure: I am very very far) and something bizarre happened.

After few seconds that I was looking at the Yahoo! Finance page, I saw some letters change... I knew I did not have any alcohol yet that morning, so I was supposed to be still sober: what was going on?

I reloaded the page and the same effect happened few seconds later: the letter -e- became a number -3- in many words... and it was underlined...

How can I resist? As Claude Hopkins preached, curiosity is one of the strongest forces to motivate human behavior... I approached my mouse to the -3- and clicked...

It actually did work: it was the advertisiment for the New BMW 3 Series...which sports the tagline "SHARP3R than any corner"...

Before "Allucination"

After "Allucination"

Enjoy the rest of the day,

Kramerilio in Korea

Can I have your name please?

2005-05-11T03:33:00.000-05:00

I continue to wonder why so few companies ask for my information and then use it to create a stronger bond with me.

Having somebody coming to your shop, jewelry store, tires shop, car hand-washing place is good: but knowing where he/she lives is way better: one can start a communication, can send special offers to boost short term results, can make alliances with other companies to cross promote products that will be of interest for the clients.

Of course a valid self-serving reason has to be given to the prospect: but just receiving special offers reserved to customers is sufficient to convince a large number of people (me included) to sign up.

Next, a database will be needed to store the organized information: we'll talk about it in the near future.

Kramerilio in Tokyo airport, on my way to Seoul

Carrefour action and communication

2005-05-09T19:20:00.000-05:00

Subjects: The customer will not appreciate what do but you don't communicate
Principle: If you are doing something for the customers, tell them. Otherwise they will not be able to value it.

Many times businesses provide great advantages to the customers and don't reap any reward: why? Because they don't tell the customers about it...

Companies sometimes live in a parallel universe, where they think the only think a customer does all day is to look for them, for their products, for their logos, for their news... Hmm, sorry, that's not the case: we are busy, very busy, so if you want me to notice something, you got to tell it to me very clearly.

I like the initiative of one Carrefour center in Italy (Wal*Mart competitor) where they managed to lower the prices of a group of products.

The interesting things is that they take the pain to let the customers know about it: very smart, indeed. That little flyer you see did a good job: now I know that Carrefour worked hard and lowered my cost of grocery shopping (at least in Italy...)
(ups, for Non Italian speaking readers, the flyer says:"Carrefour beats the inflation. We don't keep the prices stable: we lower them. Since 8 months, you spend less than one year before")

We'll see more example of this pre-emptive strategy in the weeks to come

Kramerilio in Texas

Flying to Korea tomorrow - Back online on Thu

2005-05-09T19:17:00.000-05:00

Tomorrow I am flying out to Korea: I'll surely be on the lookout for some tasty local marketing ideas.

K

Increase your sales with some extra ink

2005-05-08T22:49:00.000-05:00

Subjects: Use of quotes to increase chance of success
Principle: If an authority is endorsing a product, we agree to purchase it faster
Potential Worth: Extra sales at no extra effort
Referenced Reading: “Influence: The Psychology of Persuasion” Robert B. Cialdini

I was literally in awe when I saw this exemplary example of use of Power of Authority.

As Dr. Cialdini explains in his excellent book “Influence”, there are few principles that the professionals of compliance use to short-circuit our rational thinking patterns and get us to “Yes” right away. One of these principles is the Power of Authority

For example, if I am evaluating which one to hire between two lawyers, for all other things being equal, if I see that one is Texas-Bar Certified I will definitely go with that one. This is not because I did a long and extensive analysis of the careers of the two individuals: simply I trust the Authority of the State of Texas, follow their advice and move on to my next decision for that day.

Same thing for toothpaste: if one has the approval of the ADA (American Dental Association) I am generally sold.

One more note of introduction for today’s example: David Ogilvy is one of the most influential and respected advertising personality of the twentieth century. Founder of the agency Ogilvy and Mather, he is responsible for the creation of many of today's best known brands, like Dove soap, and they are in charge of clients like IBM, Motorola Cell phones, Nestle etc

Let’s get back to our example today: check out the cover of the book before and after the sentence from Mr. Ogilvy has been inserted. Compare the persuasive power on the prospect that the extra ink is exerting.

I personally did my very unscientific surveys: I show the book to a marketing colleague first covering the sentence and ask “If you see this book in a book store, between 0 and 10, what is the probability of your purchasing it?” As Hopkins is (unfortunately) a relatively unknown author, I normally get a “Hmm, maybe 1 or 2”. Once I uncover the sentence, a staring look appears on the marketing colleague and he/she proceeds to change the answer to “Ok, now I will buy it right away”.

The sentence is "Nobody should be allowed to have anything to do with advertising until he has read this book seven times. It changed the course of my life" - David Ogilvy

Wow, one sentence… few extra dots and lines… so powerful…

Kramerilio in Texas

Thank you, Grazie, Merci, Gracias for the links !

2005-05-06T20:49:00.000-05:00

The blogosphere is treating Smart (Business) Ideas with great kindness: two blogs linked to us in the last few days.

[mini]marketing and giusec&frienz mentioned our blog: we bow in respect and gratitude and link back to them.

For our Italian-speaking readers, I surely advice to check those blogs out: they have useful information not only on the business arena, but about life in general.

Grazie ragazzi,

Kramerilio in Texas

Recruit an army of sales people for free

2005-05-06T20:37:00.000-05:00

Subjects: Turn your customers into sales people on commission thru referrals
Principle: Give incentive to your customers to sell your stuff to friends

Potential Worth: Extra sales at no extra effort

As you know by now, I am a great admirer of elegant ways to create extra value in a relationship between two or more parties.

One method I like is to give real incentives to the other parties to do what you want them to do. Sure, even without doing nothing, some random kind soul will send their friends your way. But why depending on good fortune and not putting in place a solid, well structured referral method?

I love referrals (see the other postings on the subject): referred customers are, statistically, the ideal crowd – they negotiate less, purchase more and more often.

So, how do we turn our customers into active referral machines? How do we turn them into evangelizers of our business? There are many methods of course: today we take one specific example.

I take this example from one of my favorite authors, Claude Hopkins, from his book “My Life in Advertising”. On page 87 he describes how he transformed the clients of his shoes business into an army of sales persons. How did he do it? Simple: he shared with them the benefits of any sale they would bring in.

Basically, he sent coupons to his customers saying “Look, for any extra pair of shoes you sell to your friends, you get 10% off on your next purchase. So, if you sell 10 friends, you get a free pair of shoes”. I love it: so simple, linear, clean and sincere.

How can we apply it? Well, let’s say you have a truck rental business, or a termite removing business or a go-kart racing place. Just make to all of your customers the proposition “Ehi, dear XXX, if you liked the experience, why not sharing with a friend? And on top of that, you get free – blank -(fill the blank with: truck-rental, termite removal, go-kart race day etc). For every friend you bring, you get 10% off. Bring 10 friends and get it free”

The beauty of this model is that you pay only for results: no base salary for your army of sales people. The more they bring results (real new customers), the more you pay “commission” to them, but the more you get business at no marketing and sales cost!

Sure, you have to give up part of your pie, but I prefer 90% of a bigger pie than 100% of nothing…

Happy recruiting of sales people,

Kramerilio in USA

I crave Points: Hallmark, give them to me! (Part 2 of 2)

2005-05-05T22:34:00.000-05:00

Subjects: Points-accumulation programs
Principle: How to use points to increase sales via returning customers

So now that I applied for my Hallmark membership, I expected something great to happen: as the Hallmark people now knew me (they have now my address, name and even phone number), they could start communicating with me.

And they surely did: few days after my signing up, they sent me the welcome package – I am a very happy member!

In the welcome package there was a diabolically effective and smart item: a keychain version of my Hallmark Card, with my Hallmark Id and bar code. How irresistible: I immediately integrated it in my key ring, together with my mailbox and house keys.

So, now it’s always with me and there is no chance for me forgetting it. What a smart idea from the folks in the marketing department of Hallmark. Kudos to them for having the idea or even for just imitating it.

Lesson for the guerrilla entrepreneur: make sure you create a keychain version of your points program - it works great!

Kramerilio in USA

I crave Points: Hallmark, give them to me! (Part 1 of 2)

2005-05-04T23:28:00.000-05:00

Subjects: Points-accumulation programs
Principle: How to use Points to increase sales via returning customers
Referenced Reading:

Permission Marketing by Seth Godin

As discussed on Monday, there are 3 ways to increase business

Increase the number of clients
Increase the Average purchase they make
Increase the frequency of purchase

Today we talk about a way to increase both the second and the third one: Points.

As Seth Godin describes on page 98 of Permission Marketing, there are 5 levels of permission and Points are the second-highest level, just after Intravenous (or Purchase on Approval, like the book of the month club, that chooses and purchases books for you)

Using points helps with soliciting returning business and increasing average purchase: people tend to buy more and more often if the see they are accumulating points toward a reward. I am amazed by how few companies use this extremely powerful mechanism.

It is so easy to set up: Get a point card designed by your nephew, print 1,000 at the local Kinkos (open 24 hours, so you can do it even after work hours) and start handing them tomorrow to your clients.

I cant believe my Dry cleaner is not doing it, and my cleaning lady, and my local small Pizza place

So, after American Airlines, Hallmark got me: they proposed me in their store to register for their point program: hey of course I sign up, I want to see what happens !

About 2 weeks later, I got my personal card from Hallmark: now they know me and they keep a direct contact with me.

And every time I think about a card, I think Hallmark store first: they reward me, shopping there is in my best interest

Kramerilio in Usa

How to write a great headline

2005-05-03T00:20:00.000-05:00

Subjects: How to create a good headline
Principle: With the right headline, you can attract attention

I see headlines that are so boring and uninspiring that I wonder why would anybody read the rest of the advertisement… “Institutional Advertisement”, with the big budgets associated, is difficult to track, as far as results are concerned, so the pressure to use only effective headlines is low.

But for the budget conscious entrepreneur, it is imperative to get maximum bangs for the bucks. For this reason the headline has to capture the eyes and the attention of the greatest possible number of readers.

Just searching on Amazon for “Headline marketing” gives me back 34.153 books: any of them would probably make a good read for the guerrilla marketer-entrepreneur.

But for a super quick recipe for a decent headline, just get this: start your headline with “How to…”.

How to create a great headline, How to solve your house financing problem, How to send your son to Ivy League College with less than 100$ a month, How to find the cheapest car on the market etc

“How to“ headlines are curiosity-arousing and very self serving for the reader: they show why the reader (in his/her best interest should keep on reading). And that’s the best way to persuade people to give you their time and interest.

Kramerilio in USA

The Amazon Gold Box

2005-05-02T07:59:00.000-05:00

Subjects: Increasing Average Sale per Visit
Principle: Once you got the customer in the door looking for something, what else can they buy from you?

As Jay Abraham says, there are only 3 ways to grow a business:

Increase the number of clients
Increase the Average purchase they make
Increase the frequency of purchase

That’s it…

Today we talk about the second way: increase the Average purchase a client makes, and we talk about Amazon.com

I really love that company: their web site is a neve- ending source of ideas on how to efficiently run a business, optimizing every aspect of the purchasing experience.

Since some time, Amazon has a little icon in the top of the screen called “Your Gold Box”. At the beginning I was puzzled by it: it’s basically a series of special offers tailored to you, time-limited (60 minutes), that you can take or lose forever. Hmmm, not exactly a life changing concept...

Now I understand… every time a visitor to the web site clicks that icon and goes thru the series of special offers, Amazon has the opportunity to increase the average sale they make. Yes, because all the stuff they show me during the "Gold Box little parade" is something I would not have bought anyway… if they can sell only 1% of people, it’s 1% extra sales at no extra effort (Amazon does not have to hire extra sales people to do that… it’s a piece of code, perfectly scalable and that repeats an algorithm to propose with extreme consistency an optimized sequence of offers, tailored to the specific viewer).

Amazon in this way is capitalizing a great asset they have: the fact that a viewer is on their web site. Since he/she is there, they try to get maximum return.

Kramerilio in USA

Tests Time! (Part 2 of 2)

2005-04-30T12:44:00.000-05:00

Now let's have fun with a little game: I will put here 3 examples of real tests that have run on newspaper advertising, with 2 different Headlines (this is called “Split-Run”: the newspaper/magazine prints half of the copies with one version and half with the other and distribute uniformly both of them on the territory). Only what indicated changed, nothing else in the advertisement: same pictures, same text, same offer.

The idea is for you to guess which version did better: Case A or Case B? Solutions at the very end of the post (ehi, don’t look at the solutions right away, come on!):

Example 1: Advertisement of a Retirement Income Plan

Case A) Headline: A vacation that lasts the rest of your life

Case B) Headline: How you can retire on a guaranteed income for life

Example 2: Advertisement of a Home-Study Course in Business

Case A) Headline: To a $25,000 man or woman who would like to be making $50,000

Case B) Headline: Here’s proof that this training pays financially

Example 3: Advertisement of The Wall Street Journal subscription

Case A) Headline: How 27$ started me on the road to $75,000 a year

Copy Plot: the story of a man who sent $27 for a trial subscription to The Wall Street Journal. Later he became a regular subscriber. Reading the Journal helped him get an income of $75,000

Case B) Headline: Some $75,000 jobs are looking for applicants

Copy Plot: there a e a number of jobs paying $75,000 or more that are available to trained men and women. Reading The Wall Street Journal will help you train for one of these jobs

Results at the very end of the post.

Surprised? You are probably not alone. You got all of three right? Congratulations, you are better than the majority of advertisement professionals.

Now, imagine if Case B in Example 1 is yielding 50% more than Case A: not running the test and sticking to Case A would mean not getting a good part of the responses. And for no cost difference…

What is the philosophical bottom line of this posting? Maybe that the only thing that really counts is imagination, the ability to think new things, new solutions to be tested and improved. As Mark Victor Hansen, co-author of “Chicken Soup for the Soul”, says “The only asset a company really has is human imagination”.

These examples are taken from the classic advertisement book “Tested Advertisement Methods” by John Caples, that I recommend to anyone involved in promoting his/her company.

Keep thinking smart,

Kramerilio in USA

PS Results of the test

Example 1) Case B

Example 1) Case A

Tests Time! (Part 1 of 2)

2005-04-28T08:08:00.000-05:00

Subjects: Testing
Principle: You don’t know what works best: the only way to discover is to test
Potential Worth: Extra sales at no extra effort
Referenced Reading:

“Tested Advertisement Methods” by John Caples
"Failing Forward" by John Maxwell

This post deal with a major factors in the success of any marketing or sales activity (not only for big multinationals, but also for small companies, 2-people shop etc): Testing.

If you are relatively new to marketing, let me share with you the worst kept secret in the industry: in marketing nobody knows in advance exactly what is going to work best and what will fail... Now that you know this, as Jack Burns in "Meet the Parents" would say, you are in the "Circle of trust" ;)

Nobody knows with certainty beforehand: not the managers, not the advertising gurus, not the sales people. Sure, people with experience in the field will have gut feelings, suspects, suppositions, hunches but the reality is that there is only one entity that will be judge and jury: the Public.

As a consequence, the only way to really see if the advertisement (or email, or fax, or small ad in the Sunday paper… anything you use to communicate with the world) version that you prefer will do better that the one your friend/colleague/business partner prefers is … to try both and compare the results. This is called Testing.

So, your mom was right: tests do not end when you finish school. “Life is a never ending test” would say mine.

It is the good, old “Trial and Error”: that’s the way we learn to walk, to talk, to ride a bike. We try, stumble, fall, try again, correct, cover more ground, fall again etc. But without the feedback mechanism, we would never improve our performances. A good book on how to learn to fail in life and move forward is "Failing Forward" by John Maxwell (you can see it here)

Basically, different versions of the same advertisement (or offer, headline, sales pitch, proposal) are tried in the same conditions and the results carefully collected and farmed into an all-powerful Excel spreadsheet to see which one is yielding the best results for the same investment. It looks simple, right?

The biggest obstacle is to actually start the procedure: it can be boring to continuously work on testing new combinations, new ideas, and new approaches. But the payout can be really consequential. Actually, this could be one of the highest return you get for the time you invest in any sales and marketing operation in your company.

For example, if you are a small entrepreneurial company providing car repair services and you are putting the same ad every week in the Sunday paper, you are missing a big opportunity to get more bangs for your bucks: Testing different headlines, different offers, and different copy plots could bring your response rate dramatically higher, even doubling or tripling your inquiries.

(Continues in the next posting)

A Price so Low that it is Illegal

2005-04-27T06:13:00.000-05:00

Subjects: Pricing Presentation
Principle: Presenting Payments in Daily Terms Instead of Lump Sum
Potential Worth: Extra sales at no extra effort

With this Smart Idea we fly back to Germany: our good friend Stefano is providing this suggestion. Danke Stefano !

The Deutsche Post (National Postal Service in Germany) is offering small loans of 5,000 Euros (about 6,500$) to be reimbursed in super small 2.9-Euros-a-day (3.5$) payments.

Wow! This looks very interesting; the daily repayment is so low that if you don’t have the money, you can ask your son or daughter to borrow some from them…

The truth of the matter is that the payments have to be for 72 months and the resulting interest rate is 7.99%!

The principle behind this is very smart, so smart that it is illegal to use it in some cases. Payments are presented in daily terms instead of a lump sum: in this way, according to researcher John Gourville (1998), the prospect is more likely to consider the expense as another trivial daily expense instead of a major expense. This is true even if the expense has to be paid in a lump sum: the principle is to show the prospect the “daily amount” angle instead of just the big, scary lump sum.

“Thinking of payments in terms of daily amounts rather than annual amounts is so effective, that civil courts in some jurisdictions do not allow lawyers seeking punitive damages to express to the jury their sought-after compensation in daily amount terms.” says Noah Goldstein in her interesting article on this subject (for the complete article, click here).

So, from tomorrow, you can think twice about the cost of your cappuccino: for just one cappuccino a day, you could fly to Hawaii for your next vacation…

Till next time,

Kramerilio in USA

Interesting Tactic to Increase Attendance

2005-04-26T11:27:00.000-05:00

Subjects: Residual Value of a Customer
Principle: Investment to acquire a Customer
Potential Worth: Your average sale per customer x the new acquired customers

It is very interesting what we receive thru email these days: I am always fascinated by the opportunity to study what other marketers use as techniques, in order to learn and redeploy them in other businesses.

Case in point: yesterday I got an email soliciting my participation to a conference call. The body of it said the following:

“The Ticket Price is set at $1,295 per person - but I've arranged a very, very special deal just for you. Instead of paying $1,295 per ticket, you just have to 'reserve your seat' with a $100 'seat deposit'.

And the best news is - that $100 is refundable once you show up -- making the event totally free!!”

So, the final objective of the initiative is not to make money in the short term, obviously: they want to get people to participate to the conference call. I like the fact they point out the “commercial” value of the conference call ($1,295) and that the price for this time is a rock-bottom $100. Great deal. But wait, there is more! We will get the money back.

So, where are they going to make money? I can already hear your answers… Residual Value of the Customer (sure, "Customer": they paid already $100…).

They know that, statistically, maybe 3% of the participants will purchase books, classes, courses, seminars whatever they will propose, and they know statistically, how much each one will purchase. So, it makes good business sense to invest the cost of the email offer (zero $), of the phone conference call (some hundreds of $) to reap the statistically quasi-certain benefits.

Till next time,

M in USA

Is my Steak Ready ?

2005-04-25T08:10:00.000-05:00

Subjects: Residual Value of a Customer
Principle: Cost of losing a customer, Critical Interaction Moments (CIM)
Potential Worth: 1,000$ of lost profit per customer lost

Yesterday evening we went out for dinner: we decided to give a shot to a new steakhouse, where I could enjoy our position on top of the food chain and honor in the best way a great New York Strip.

After sitting and ordering, my steak arrives, and its lukewarm, not sizzling the way I like it. I tell it to the waitress: she takes my steak away and come back couple of minutes later with the same steak still tepid. She asks me Is the steak way better now? I reply with an unconvinced Hmm, ok. And she leaves. And I mentally leave that place for ever. Amen.

I am intrigued by the Critical Interaction Moments (CIM) in a transaction. These are the moments in which the relationship between a person and a business can move to the next level of mutual trust. And when the customer has a problem, it surely is a CIM.

The waiter did not replace my steak: great, she saved money for the company. Well, in reality, there is a cost associated with that. Because I was not fully satisfied, now I will not go back there anymore. Lets run some basic math

2 person party x 2 times a month x 3 years I live in a place = 144 dinners served that the restaurant will not get from me. If they make, say, 7 dollars of profit on each dinner, we are talking about 144 x 7 = 1,008$ of future profit that went in smoke.

Replacing the steak and make me a life-time customer would have costed probably 5$...

Hey, invest 5$ to get 1,008$: I am down for that kind of investment...

We just briefly analyzed the Residual Value of a Customer: few companies think in terms of future revenues potentially lost when they deal with problems. If they did think about those future dollars, I guarantee our complains would be addressed much faster.

But the reality is that a short-term view of the commercial transaction (How many dollars can I get now? Is it worth to replace that item?) prevails in the majority of cases, and this makes people shop around and leave a business

My dream is a lifetime relationship with a customer: the cost of acquiring a customer is so high today that it makes sense to go almost to any extent to keep them from going away. And on top of that, it is a great satisfaction to deal with a circle of customers that now become your fans.

And remember, "You don't sell the steak. You sell the sizzle."

K in USA

Ok, I will upgrade you, dear Friend…

2005-04-24T10:39:00.000-05:00

Subjects: Creative offers
Principle: Leveraging to full extent your assets
Potential Worth: Around 30 M$ additional profit per year

We talk again about Airline Industry today. I am a big time flyer: I fly so much that pilots greet me when I board the plane " Hey Kramerilio, long time no see on this route How's going buddy?". Just kidding... But I do fly a lot.

One area of business (and life) that fascinates me is the amount of assets that a company has that are unexploited. Those assets are not on the books but they have a clear commercial value. For instance, what is the value of a clients database? And how much more a very good database (with all kind of information collected, like Amazon does) is worth versus a mediocre one (where just name and last name are present)? Difficult to quantify, but we know that this difference can become worth real dollars, if the asset is entrusted in the hand of a savvy business person or a guerrilla marketer.

Along these lines, we talk today of a very creative way that American Airlines (AA) found to create some extra money: I love these examples because they create wealth and value out of thin air.

A word of introduction: When a person flies a lot, she accumulates 500-mile upgrades, that allow for that person to upgrade to First Class on domestic flights (if seats are available). Now, these upgrades are non-transferable: I got hundreds of them and they sleep unused in my account because I cannot humanly fly enough to use them all.

Now, instead of just allowing this upgrades to be passed to a friend, AA decided (smartly, may I add) to see if they can make some cash out of the transaction Ehi, what's the downside? People not taking advantage of the offer big deal...

So, now I can make friends, family, colleagues happy for just 15$ transfer fee: they are happy, I get big hugs+recognition+love+friendship and AA gets some money.

Lets run some basic math about this: if I transfer just 2 times per year, AA makes 30$ out of the transaction at basically zero cost and zero risk. If 1 million travelers do that per year, that's about 30 millions in pure profit that AA gets, every year, forever, amen. (remember, upgrade is subject to availability, so they are not putting first class revenue at risk: if first class is full of paying customers, no free upgrade is allowed).

Oh, I love smart and elegant ideas like this one: just upside, no downside.

Have a great Sunday, fly safely!

Kramerilio in USA

What's inside this envelope...? Let me open it...

2005-04-23T09:59:00.000-05:00

Subjects: Direct Mailing
Principle: Optimizing the opening rate of Envelopes

I am big on Optimization: if I do something, I love to get maximum yield from it. Especially if the price I have to pay for mediocre results or great results is the same ... "I was not put on this planet to lose money" as my millionaire friend Mike reminds me.

So, when we talk about Direct Marketing (basically, the letters sent to people directly in their regular mail box), we have several critical hurdles to clear (it's like playing a video game: there are obstacles along the way that we must pass in a certain order: if we fail even just one, we lose and our letter is trashed)

The first one is to get the envelope to be looked at: it is cute to see how much money businesses waste with direct marketing, creating a fantastic brochure or sales letter and putting it into a completely uninviting envelope. The result is that the envelope (with the content and the stamp) is sent straight to trash. What a great way to burn money...

There are a couple of main strategies to get the envelope looked at:

a) Make it look very personal, to encourage the receiver to consider it of high importance. Tactics in this case require the use of the personal name of the addressee (yeah, there are also letters sent to "Resident of": they go straight to trash), personal looking envelope (white, no company logo), return address of a person. The best result is obtained with hand writing: as this is pretty labor intensive, there are now sophisticated programs that can simulate relatively well human writing: this will surely increase the opening rate. Here the stamp should be a regular one, better if unusual, but surely not metered mail

b) Make it very interesting, forcing the receiver to open it out of sheer curiosity. This requires the use of smart headlines (see posting on March 27th). The receiver knows it is for commercial purposes, but the headline is so enticing that he/she cannot avoid opening.

An extra tactic in this case is to put, instead of a 37 Cents stamp, say, 7 stamps of 5 cents and 2 of 1 (5x7+2x1=37c): imagine the recipient, with an envelope with so many stamps, with great headlines on it How can he/she not open it?

Another tactic is the one depicted in todays posting: to glue a coin inside the envelope, to elicit even more curiosity: the tactile sense will be stimulated, adding to the curiosity. In this case is a coin: it could have been a plastic card as well, for instance.

As Claude Hopkins says, curiosity is a very strong motivator for people: if we are able to fuel the desire to know more, we are on the right track.

Thats it for today: I got to go throught my mail. There are a couple of envelopes with a bizarre looking content I want to check out...

Kramerilio in USA

May I have the check, please?

2005-04-22T17:31:00.000-05:00

Subjects: Referral, Returning customers
Principle: Lead your customers to the behavior you want

By now you start knowing me: I am really passionate about making as much money as possible for the same effort, providing a better service.

Along these lines, I got some pet peeves: one of my biggest is at restaurants.

After a great dinner, I ask for my check and duly pay (leaving a tip: how much? hehe, there will be a post in the future on "How to increase the tip amount using social psychology": amazing stuff, so easy to make more money that way, knowing the right principles...).

Then something really disappointing happens every time (actually, it does NOT happen...): the waiter/waitress brings me back the receipt and that's it... Whoa ! They are wasting a golden (and free) opportunity to hand me 2 or 3 business cards of the restaurant, asking me, with politesse, "Sir, we truly enjoy having guests like you. If you loved our food, we would appreciate if you could pass our business cards to your friends: in this way, we can invest more of our money into great food and a great environment, instead of paying for advertisement".

Nice, short, sincere request: it would work on me like a charm.

Downside: nothing, zippo, nada.

Actually, half an hour later, I have been asked about that restaurant, and I was unable to provide the phone number to the person asking me... One new customer lost...

The principle is often unknown to business owners: People are silently begging to be led, people want to be, in a courteous and respectful way, educated about what to do next. Sure, some guests will still look for the business card and go out of their way to get it, but why making their life difficult? Why not helping them making you a favor?

Did any of the readers ever found a restaurant doing this? If yes, lets give some free advertisement to the smart restaurateur on our little forum !

Enjoy your dinner,

K in USA

Home, Sweet Home…

2005-04-21T00:04:00.000-05:00

Subjects: Mailings, Headlines
Principle: Headlines and outline of the card DO make a difference

Today we talk about Real Estate Investing. No, we will not go into the details of how to compute your monthly payment for a mortgage or how to choose the best house in the neighbors: we will analyze a sales card I got in the mail from a Real Estate Investment “guru”.

The card uses a lot of the smart-ideas-approved techniques to increase yield with no risk: the card has been designed well.

First of all, it’s a card, not a letter. The marketing letter has advantages: we can put more details, a brochure, a sales letter etc. On the other hand the use of an envelope adds one extra step to the marketing process: getting the envelope opened…

This is such a fascinating field in itself that we will have a posting in 2 days on “How to make somebody open your envelope”. But for now, we just have to remember that the advantage of the card versus the letter is that the card will be read: it’s already open… the person cannot avoid getting a glimpse of it.

Now, the glimpse is a fraction of a second: the good marketer knows that this is all she/he has to capture and retain the attention of the prospect (Steven Scott calls this step “the hook” in his good book “Millionaire's Notebook”. For more information, click here). And key words like “Secret”, ”Money-Making”, “Wealth building” do work: we can smile at them, we can scorn them, but they do work in retaining attention.

Together with the use of the word “FREE” for the tape “hand written” (which got my attention), I enjoyed the very elegant way to make people read the second page: the first page ends with the sentence “Here’s how” (see other side). DIABOLICAL! Still Steven Scott calls this technique “salting”: adding “salt” to the description to make the reader thirsty for more. To quench my thirst, I did turn to the other side.

This second side reserves a couple of pearls for us. One is the use of highlighting to direct the attention to specific areas. Another one is the picture of the tape: this add dimension to the promise, it make it more real. Last but not least, the Toll Free number, which is surely coded to understand which kind of card works best. I am pretty sure, in other part of the state or of the town, they received different versions of the card, and the results are monitored with discipline by the marketers behind this direct-mail campaign.

All right, that’s all for today: I gotta go check for a new house that I want to buy soon…

Till next time,

Kramerilio in USA

Nobody loves me...and I am getting older...

2005-04-20T22:48:00.000-05:00

Subjects: Creative offers
Principle: Recognizing Birthdays' value for businesses
Potential Worth: 2-5% of additional sales and profit

Once again we talk about one of my favorite unexploited source of revenue and profit: birthdays.

If a business has 1,000 customers, statistically, 3 of them have their birthday each single day. What a fantastic opportunity to reach out, bind more closely with customer and make some extra sales in the meantime...

Case in point: last week it was my XXth birthday (ehi, I need to keep some mystery around my persona...). Of course, I was in spending mood: what better way to silence the inner voice the reminds me that I am getting old than spending money? I was really in the mood, I really wanted to spend, go out for a gargantuan dinner and drag with me an army of friends.

Can we imagine an easier target for a marketing mailing? I was a sitting duck, a cow waiting to be milked. I was eagerly awaiting for a cascade of coupons in my snail mail inbox, for a never ending stream of e-mails coupons eager to get the lion share of my easy money.

But the sad reality was different: nobody loves me… nobody even wants my money…

I did not get a single targeted offer at me, nothing, nada, zippo. What a pity…

Imagine the owner of a restaurant that is smart enough to start collecting the birthday (day and month, not year…) day of his/her customers. How? Just asking with sincerity, as Claude Hopkins and Jay Abraham advocate in their books. “Dear guest, we would like to extend you, for your birthday, every year, a special gift. But in order to do that, we need to know the day and month of your birthday: would you please share with us that information?”. Downside: nothing (how can somebody get angry at a request made with tact and politeness?). The worst that can happen is to get a “No, I prefer not to give you that information”. Big deal…

And the restaurant would be sure to get a bunch of extra customers: actually, why not suggesting me to bring a party of 5 or more to get a 20% discount? And if the party is of 10 or more, extra discount.

And we can go on and on… what about my hair stylist: don’t I want to look cool for my bday? Car wash, sir? New clothes, of course ! Banana Republic, The Gap, where are you guys? I got money, I want to waste it (ehhmm , spend it…), just come and get it.

The Bible (best selling book of all times, we can quote it right?) says “Ask and you shall receive”. What a great formula. And in our marketing world, it seems that nobody is asking for the money of the birthday-boys (or girls). Why? Because it requires the discipline (and understanding) in building a database, one step at a time, one name at a time. And obviously this is not considered important, valuable by close to 100% of businesses...

Some basic math to evaluate the business impact: if I go to a restaurant twice a month, that is 24 times a year and the birthday offer gets me one extra time, that increases by 1/25=4% the business a restaurateur can get from one guest. Not life changing, sure, but not to be laughed at: remember that there is no risk associated...

That’s all for today: next time, maybe, we will have a posting on anniversaries… wedding anniversary, graduation anniversary… keep them coming…

Till next time,

K in USA

Keep on Yodeling: check out Rentalps.com

2005-04-19T12:00:00.000-05:00

Today is our Swiss day: after my lunch fondue, I am going to have a big Toblerone to make my day a sweeter day. And who knows... Maybe I will add some Swiss Cheese to my pizza this evening...

Ok, back to business.
Today we talk about a web service exclusively dedicated to renting apartments in the Alps: rentalps.com (full disclosure: Rentalps.com is owned and operated by a friend of mine).

I am glad to bring some attention to this site for his interesting risk-reversal policy for Owners:

In two simple words, no risk. The site allows to post the ad about the apartment or chalet in few minutes for no cost (no cost = no risk)
Owners can receive 3 free contacts from prospect renters, so they can actually see the service at work, delivering results.
There is no time limit: the owner can leave the ad posted with no cost till results start coming.

It does not get much better than this: checking a service at work delivering sample real results without even paying a single Euro...

Ok, now I go to look for my next ski trip house: do I prefer Moleson or Verbier?

Kramerilio in USA

Pay first, get your money back - The SwissCom idea

2005-04-18T10:53:00.000-05:00

Switzerland... The name alone is enough to evoke great memories of ski trips, tasty chocolate and great Ricola herb products ...

But Switzerland, together with the Swiss Army knife and the Swatch brand, gifted humanity with another great idea, from the country Telecom operator: SwissCom.

(By the way, this idea is contributed by Stefano from Germany. I love that our readers are now contributing to the blog, this is great! Thanx Stef!)

It's an offer to increase the adoption of ADSL technology for Internet access.

Let's see how the offer works (for our non-Italian speaking readers).

First, the prospect commits to become an ADSL user signing a contract
The contract allows for 2 months of "Trial period": in these 2 months, the prospect-now-turned-into-user can rescind the contract in any moment and get the FULL money BACK.
After 2 months, the automatic condition is for the contract now to be fully valid
SwissCom encourages the prospect voiding the "Set-up costs" of 149 Swiss Francs (about 125USD)

This is a very clever spin of the "Money-Back Guaranteed + Free Trial" idea: in fact, there is NO free trial... Basically, the Trial Period allows for the contract to be rescinded, but it does not provide for 2 free months... The subscriber pays for the 2 months, with the understanding that the money will be fully reimbursed in case of dissatisfaction. But still, he/she pays !

I love this, very well thought-out: it provides risk reversal but without the necessity to give away free months.

Ok, now I go to eat: we'll probably have some fondue in honor of the great country of Switzerland. And don't forget to yodel !

Till next time,

K in USA

Just Married... And some other smart ideas

2005-04-17T10:32:00.000-05:00

Springtime... Perfect weather for weddings.
Birds are singing, temperature is mild, nature as a whole is waking up from the winter sleep: we all agree it's the perfect moment to tie the knot and start a new life with your loved one... To live happily thereafter...

Ok, now back to business.
I went yesterday to the wedding of 2 very dear friends and it was a great experience. But while enjoying the reception afterwards, with great food served at elegant tables, my business mind - marketing-oriented machine was cranking.

There we are, 8 guests sitting at a table waiting for food to be delivered. After few pleasantries, the expected moments of odd silence start descending upon us: in those moment, I would do anything to look busy, I would read anything... So, why not having something on the table promoting the catering company?

If you are the catering manager, think about it: 8 people per table, 15 tables, a total of 120 guests for a very captive audience. They are already experiencing the service and products your company can provide. They are in an excellent position to take your business card and pass it along to friends or to use it for their events.

Surely the pitch has to be done with tact: and about this, I refer again to our great teacher Claude Hopkins. Why not just being sincere and write some good copy to entice the crowd.

How about "Dear Sir/Madam, we are 3 friends that started this catering company, for 2 main reasons: we love food, and we adore helping in making happy events become reality. We don't have much budget for marketing: we prefer to invest our profit in making better food, choosing the top ingredients without compromises. So, it would be great if you could help us out in staying in business: if you found this food tasty and it made your palate delighted, please take some of our business cards and pass them to your friends. Or just give us a call for your next happy event: a wedding, graduation, Christmas banquet, Thanksgiving, Birthday parties or your wedding anniversary. We will make sure to make you a hero for your guests."

As usual, what do they have to lose?

Of course, the couple might object to that: great, in that case they should refrain from doing it.
But hey, if that's the real story, who would not want to help a young company with goodwill and high service ethics? Does it hurt to ask?

A little more basic math: if they cater today to 3 weddings a week, with 100 people each, it's 300 people seeing the "ad". If they cater for 3 months a year, that's about 13 weeks x 300 people = 3,900 people exposed to the ad and the services for zero cost ! ZERO !

But it requires to think about it, and that's the tricky and difficult part.

Till next time,

K in USA

The Performance Guarantee from British Airways

2005-04-14T02:37:00.000-05:00

Oh, flying over the oceans, seeing the clouds below while the quiet buzz of the airplane engines keeps its hypnotic effect on the passengers… what a beautiful sensation of lightness and comfort…

www.ba.com/sleepwellguaranteed

Ok, now down to business. Today we will talk about the aviation industry and about one initiative I found publicized on this week’s edition of “The Economist”.

British Airways (BA) is now pushing a “Sleep Well Guarantee”: wow, what a concept.

How do they dare risk that people can take advantage of them and claim that the night was spent having nightmares and with the eyes open wide watching the ceiling? Would this initiative from a crazy marketer inside BA bring the colossus of world aviation in the brink of collapse? And, most importantly, should I use my BA miles before they fold?

I think we can literally sleep tight… the Guarantee is architected in a very clever way, helping both BA and the customers: our beloved BA will not go bankrupt because of it.

Basically, they promise a free upgrade to First Class on your next flight if you are not satisfied with the quality of sleep in Business (ups, the “Club World Business Class” as they call it).

Now, for the “risk” of giving away a Free upgrade to First, let’s see what BA gets in the deal:

Increased willingness of prospects to prefer them: ehi, after all I noticed it. If I had the choice between BA and Air France, all things being equal, which one would I purchase? BA, of course! They took away the risk from me (Risk Reversal, as we described in the “Office Max” posting few days ago). If Air France would tell me “Monsieur, our Classe Affaire (Biz class, I would guess) is as good as BA, we don’t need to guarantee it”, I would say “Very well, au revoir Air France then. Hello BA!”.,
They get something incredibly important: feedback from a dissatisfied customer. This is a very precious commodity in today business world. To give you a better perspective on how difficult is to get feedback from disgruntled clients, here are some interesting statistics regarding unhappy clients from a study done by the Research Institute of America for the White House Office of Consumer Affairs:

The average business will hear nothing from 96% of unhappy clients who experience rude or discourteous treatment.
Only 4% of unhappy clients bother to complain. For every complaint you hear, 24 others (6 of which are “serious”) go not communicated to the company – but not to other prospects or clients

And this is hardly difficult to understand: we can easily relate to this… when is the last time that, if the food was not satisfactory at a restaurant, we took the pain to get in touch with the manager via email, phone, fax, smoke signals, flying pigeons to let him/her know about the worrying trend of the quality of the food at his/her establishment? Well… probably never… we vote with our feet: we just go somewhere else. And we take with us the very precious comments and insights about the potential cancer that is eroding the profit of the restaurant…

Hence, from BA it’s a very smart idea to pay a small price (an upgrade to First Class) for such a precious opportunity: getting the opportunity to talk with a client that otherwise would leave the company forever
They are not even risking to lose the potential money of the upgrade… if we read the small print, the upgrade is “Subject to availability”: basically “Sir, we will give you a seat that otherwise would go empty anyway”. They are not promising to give up a paying customer upgrade…
They can stop the initiative at any time. There is no law that says that once they start, they cannot stop… if too many people take advantage in bad faith, just to damage BA, the company can stop the initiative just pulling the website down.

This initiative falls into the category of “Catalytic mechanisms”, very eloquently described in the fine article of Jim Collins “Turning Goals into Results: The Power of Catalytic Mechanisms” published by Harvard Business Review (for more information, click here). Basically this mechanism forces the organization (BA) to notice a failure in their operations because it creates an incident that cannot go unnoticed. In their reporting systems, that request for Free Upgrade will bubble up in the statistics and they will know that one extra person was unhappy. Then they can decide whatever course of action they deem appropriate to deal with the problem at the source.

I am at the Tokyo Narita airport now waiting to board an American Airlines flight. I will be in business class, but AA does not have a guarantee… I can only say “I wish I was on BA to sleep tight”

Au revoir, a la prochaine,

M in Tokyo

One Referral Here, One Referral There...

2005-04-12T10:00:00.000-05:00

Ok, you guys are starting to know me: and you know I got a weak spot for referrals. Referrals are, statistical, better customers, buying more, more often and asking for lower discounts. Basically, they are the dream customers. I love the idea of a friend suggesting a product/company/service to another friend because he/she is happy with the interaction he/she had with the company.

Now, left to his/her own devices, the average person will NOT go out of his/her own way to voluntarily provide names of friends... That's why the Bible say "Ask, and you Shall Receive" is so great. ASK ! What a fantastic formula: if you ASK, you shall RECEIVE. But you need to ask to start the receiving process...

So, here we have a very clever company that, on the back of the envelope, uses a space that would be useless otherwise, to ASK for a referral. Just one? NO! They are very smart: they ask for TWO referrals ! Ehi, what do they have to loose...

Oh yeah, of course, if you have friends interested in this stuff, please send them the web address of SmartIdeas Blog !

http://smartideas.blogspot.com/

K in Taipei

Newsweek: an example in subscription cards

2005-04-10T01:04:00.000-05:00

The well respected advertising authority Claude Hopkins writes in “My life in Advertising”: “Ad writers learn more from mail-order advertising than from any other form.”. I agree: mail-order is ruthless in issuing a feedback on the investment.

It’s very different from the institutional advertising that many large companies do: that one is not traceable in its results. And John Wanamaker famous say "I know that half of my advertising is wasted—I just don't know which half.” applies perfectly to institutional advertising…

Today we analyze an excellent example of mail-order advertisement: the subscription card to Newsweek (that I got on the Hong Kong version of the magazine traveling to Taipei).

There are so many interesting points in this piece of mailing; let’s start our discussion right away:

“75% OFF” big in capital letters to catch attention right away. The use of capital letters has to be very judicious: not only Hopkins, but also David Ogilvy, in his excellent book “Ogilvy on Advertising” are very clear in saying that capital letters are good to attract attention but very bad in keeping it: a sentence written in capital is difficult to read as our eyes are not trained.

“*75% OFF”: again the little *… but at least this time it’s clear the explanation: this is true for the 108 issues offer

108 Issues then 80, 54, 30: why not stating the subscription choices in the opposite order? Is this order random? No at all: it uses a principle called “Anchoring”: the first figure that is mentioned in a given situation will “anchor” our mind to it. Then another powerful psychological effect “The contrast Effect” kicks in: once we see the cost of the 108 issue choice, all the others will seem much cheaper in comparison. So, purchasing the 80-issue solution will not look too unreasonable: actually it will “feel” very reasonable, as our mind in anchored to the cost of the 108-issues, which is higher. If the card used the opposite order (30, 54, 80, 108) almost nobody would purchase the 108 and the 80-issue option

“Best buy”: as marketing master Jay Abraham says “People are silently begging to be led”: as Jim McCann of 1800 Flowers was doing in yesterday’s posting, here Newsweek is leading us with good information: the 108-issue truly is the “Best Buy” and it makes sense to let the reader know it (and it increases the chance of people choosing that option…)

4 FREE ISSUES: again, very judicious use of the capital letters and the word Free.

e-mail: Newsweek is taking the pain to collect emails: this is a very smart move, as email allows for free communication in a fast and very intimate way with the customer base

“Offer expires in July 2005”: you are now champions of the Scarcity principle: just putting a time limit on an offer it increases the chances of getting readers to action

“Your signature”: this is a very subtle one. Most probably that signature has no legal power, no legally binding commitment is made by signing. But, as dr. Cialdini explains in his excellent interview (click here), commitment/consistency is very strong principle of behavior in our society. So, having signed a card creates a public, voluntary and visible act of choice, that will increase the chances of us complying with it (ehhmmm, paying the invoice…) in the future

“I do not wish to receive promotional material from other companies”: by default, it is unchecked. So, Newsweek is silently getting, by inaction of the reader, the permission to sell the name to other companies. Which, in many cases, it is a business more lucrative that selling their main product… this little box might very well be the most important box in the entire card

“Pass this card to a friend”: Referrals – the source of free advertising at no cost, no risk

“HT IC260-N”: a code! I love it! They will know exactly which issue of which magazine I found that card in, and they will be able to understand which magazines work best

Whoa, today it was a long article, but I am confident you found at least one interesting idea in it.

Now I got to go and post my Newsweek card: I should probably get the 108-issue and pass the card also to a friend

K in Taiwan

1800Flowers.com: a quick way to raise some cash

2005-04-09T08:34:00.000-05:00

Flowers flowers flowers: it's spring time, just after Valentine day (well, couple of months...) and my soul still screams for more flowers...

And our friend Jim McCann obliges: as existing customer of 1800-Flowers, I got the attached in my email inbox

Very well architected: let's dissect the specimen to fully enjoy each nugget of marketing expertise hidden into this fine message.

"I love surprises": this guy is great. He flashes right away in our mind a suggestion for a flower gift: a surprise !
"This weekend only": time restriction ! It elicits the power of scarcity (see Dr. Cialdini's article in another posting few days before): as "we want more of what we cannot have", having a time limit statistically increases the percentage of people that will take action
"Exclusively for our e-mail customers": Exclusivity ! This is not for everybody: just for YOU, my dear e-mail customer. Again, scarcity: we appreciate more the offer because it's not of public availability
"Promotional Code": great for tracking the effects of the campaign: they will know perfectly how many people actually took advantage of the offer
Now a negative: "save 15%*" - I hate the little * after the 15%... What does it mean? It's not specified in the email anywhere. I did not like it.
"Send that belated birthday gift to your best friend, an anniversary arrangement to your folks or simply give that certain someone a reason to smile": again, he suggests us reasons for taking advantage of the offer. And those are damn good reasons: who does not have a forgotten a birthday lately? Anniversary with spouse, anyone? Very clever to suggest mental images rather than leaving the reader to his/her own devices in figuring out if he/she wants to send the flowers to someone
"Surprise someone special and save money too!" One more reason to do it.
"Offer valid through 4/10/05": scarcity at work again
"Send this email to a friend": Referrals again

Now, after this long description, let's look at the economics of it.

Cost: zero, nada, niente, nul - just an email to the customer database
Upside: all the people that will buy
Upside 2: the referrals, hence new people becoming potential customers
Downside: Permission erosion. I mean, if they start sending me these emails every week, I will revoke the permission I granted them to send me emails. So, they surely have to walk a fine line (as Seth Godin, in the fine book "Permission marketing" very eloquently describes). So far, so good

Whoa, this was a long post, for sure.

Now I gotta go: I have to send flowers to my friend - her birthday was last week and I forgot it...

K in Taiwan

A moment of Relax: China is Different !

2005-04-09T07:54:00.000-05:00

After so much description of business stuff, one moment of relax and enjoyment.
I got this little rarity from China yesterday: when I saw it, I immediately took action and captured this rare example of "Mystery Advertisement" with my faithful digital camera.

It's very clear: China is different from the Western world. Where would you find in Paris, Rome or London a similar Ad, with a baby together with ...with ... whatever it is...

Enjoy your expanded marketing horizons :)

K

A smart Idea from INGdirect - Referrals !

2005-04-09T07:36:00.000-05:00

All right, let's move with our business scope to the fantastic world of banks.
One might think that, with all the money they have, they would not need smart little ideas to boost profit... You are dead wrong, dear reader.

We got this Idea Suggestion from GiuseC, a great blogger friend of mine (thanx GiuseC). He just opened an account at INGDirect and received an email telling him very directly that:
1) You introduce us one of your friends that does not have an account with us yet
2) You will get a better interest rate on your savings for 4 months.
3) Here is the unique Id code that he/she has to specify when opening the account: XXXXX

Let's look into the dynamics and economics of the situation:

Cost: nothing. It's an email... not even the postage stamp
Risk: nothing. If it does not work, no investment has been made, so no money will be lost.
Upside: the ING people know very well the "lifetime net worth" of a new client. They run their numbers and they know how much a new client will bring to them in his/her lifetime: paying 4 months of extra interest on GiuseC account will be small money for what they get
Upside 2: even if GiuseC does not bring a friend in, he will still feel good about the offer. The goodwill that GiuseC has toward ING will increase, and with it the probability that he will not switch to a competitor

Wow, so much gained with a little, cute and cheap email: this surely qualifies as Smart Idea!

Till next time,

K in Taiwan

You Got Idea!

2005-04-03T06:10:00.000-05:00

By now you all know how romantic I am: “You got Mail!” immediately brings back my memories to the sweet comedy with the same title. Oh, so nice: Tom Hanks and Meg Ryan, two people from different walk of life meeting over the net and joining their lives…so sweeeeeeeetttt.

Ok, back to money making techniques: after all, that’s why you are reading this pages…

I stumbled upon the attached AOL CD sampler at a Blockbuster: nothing major there, just the CDs we are used to receive in the mail from our good friends at America On Line.

But alas! My attention is captured by a good idea: once they grab the attention of one person, for no extra price, they can have the chance to grab the attention of one of your (mine) friends! Ohhh, I love these money making ideas at zero cost!

I can already hear you guys thinking “Yeah, no cost… they have to have to generate twice as much as logins available, twice as much as passwords… their computers will start frying their electronic brains in the superhuman effort… Free…”.

And here comes the second strike of genius: every CD has the same 2 logins (yeah, your Kramerilio personally checked for you: I walked back in the Blockbuster to get a second and a third one…). So it really is a free hook for a second person, which will receive a recommendation from a friend (very powerful and cheap).

Oh, these guys are good, real good.

K in China at 28k

Minimum Risk at Office Max (aka: Risk Reversal)

2005-04-03T05:59:00.000-05:00

I love places like Office Max and similar: so much great stuff useful for home business operations: envelopes, paper, printers etc. I would buy so much of that stuff…

But hey, how do they keep making money? Let’s have a look at one example.

I brought some stuff to print at Office Max and they gave it back to me in a box with the attached writing: “On time or it’s FREE”. This is called “Risk Reversal” and it’s a very powerful business acceleration principle.

The theory is pretty simple, yet profoundly effective: every time two entities have any kind of relationship (business but also friendship, sentimental etc) one is asking the other to assume part of the risk, all of the risk or more of 100% of the risk of the transaction.

Let’s see, for example, in the case of copy service at OfficeMax. If I have to make copies, and I bring them to Office Max I am taking a risk: what if they are sloppy? What if they are late in delivering it? This might be for a work presentation… In this case, Office Max is actively working to take 100% of the printing risk: if they are sloppy, they will absorb the cost.

Is this mechanism effective? Absolutely yes. If I have the choice between 2 printing centers and one is offering “Risk Reversal” like Office Max, they get my business.

This is just the first example we analyse of Risk Reversal: many more will come to these pages in the future.

For those of you that are avid readers, you might want to pick up the great book from Claude Hopkins “My Life in Advertising”, where he talks about the many successes he fostered based on this principle. Surely the book is somewhat dated (beginning of 1900) but it is still incredibly modern: as Mr. Hopkins himself writes, human nature does not change, these principles are immortal (although their application will have to adapted to the current media).

Till next time

K in China at 28k modem

Stop and Smell (Sell) the Roses

2005-03-31T17:22:00.000-06:00

Flowers... nothing more appealing to my delicate and romantic soul than a rose... the smell, the colors, the delicate thorns, symbol of love and hate, the perfect image of a sentimental relationship...

Enough of that: let's talk biz and money.

I love this guys at 1800flowers.com, very smart. They grew their little mom and pop shop into a multimillion dollar public company.

And if you are curious about how they did it, click here for the autobiography of the founder, Jim McCann: easy to read, funny at times, surely instructional.

Now, let's do some disecting of this marketing specimen: first of all, I got it thru Amazon.com, in my little delivery box. Great idea: strategic alliances.
But what I like the most is the trackability of the results: notice the inducement for the customer to enter code "24V" to get a discount when purchasing on the web.

Fantastically done: they will be able to compute exactly the ROI (Return On Investment) of their partnership with Amazon. And they gently persuade the user to help them out, giving a discount: as we were anticipating in a previous post (the Birthday card one), with the right inducement, appealing to the self interest of the prospect, smart marketers can get us to do pretty much anything they want.

Notice also the 1800 number: it is NOT a special one (it's 1800 FLOWERS), so NOT trackable.

Hmm, does it mean they are inconsistent in tracking results? Nahhh, simply using this number builds their brand in the name of the client (would I remember next time to call 1800 FRTGKFD?). And I bet my best pair of used gym shoes that when a person calls that number, the first question they ask is "Do you have a promotion code so you can get a discount?". Bingo ! They got the cake and eat it too: they got brand and phone number recognition AND track results.

Enough for today: let me call 1800IAMVERYHUNGRY to get something to eat.

K

Le Cirque du Soleil: these guys know marketing...

2005-03-31T06:51:00.000-06:00

I don't know you guys, but I love Cirque du Soleil: it is such a great group of people, performing with passion and bringing the ancient art of Circus back to the modern times.

Ok, enough with the romantic stuff: let's talk business.
And here too, the Cirque is second to none: we will talk in a separate posting about their e-mailing techniques, very sophisticated and well orchestrated (do they work? Hmmm, yes... they got me to buy the tickets...)

What I love is that, paying via credit card on the web, they capture the address of the guests and use it for future, very targeted and relevant, emailing.

So, when they came to town few years ago, I decided to "invest" my hard earned cash in a ticket for the Cirque. And, alas, this year, they invite me to check out their new show in town... One postcard (cost of probably 25 cents or so) and they get people to purchase a 60$ ticket.

Let's see: the ROI (Return On Investment, for the normal people out there) is a meteoric 24,000% (that is 240 times the money put in). If they only get one person out of 100, they still make a very respectable 2.4 times ROI...

All this because somebody was smart enough to collect the names and organize a database... ups, databases again...(see previous posting, on birthdays).

Alles les gars, on y va au Cirque du Soleil.

K

The Birthday Cash Cow

2005-03-30T16:46:00.000-06:00

Ohh, beautiful and always anticipated with joy... the day that marks your being one year older...
A nice occasion for friends and family to throw you a surprise party with a lot of nice gifts ! Enjoy !

In my yearly calendar, few dates are so emotionally important for me as my birthday: I am such a sucker for birthday wishes, I love people remembering about my special day.

I am surprised so few business caught on this human quirk: why not more people send me special discounts/offers for my bday? I am very prone to check them out, because it's my special day... Oh, I can hear the most professional of you wispering the magic word: Database...database... yeah, that's the point and we will come back to it in the next postings. Creating and maintaining a database is a pain in the neck, and it pays off only in the medium long term. But the returns can be colossal.

Not a single restaurant in my life ever asked me about my bday: oh, I can hear you "The privacy, people would not give their info that easy"... ahh, in one of the next postings I'll show you that we are all so ready to give all the info we are asked, provided there is a good reason... come back to learn more in the next days.

In the meantime, I paste for you an example of smart business, that uses the bday idea. A friend of mine, living in Texas, passed it to me (thanx S. !)

Notice also the expiration date: smmmmaaaart guys, they put some time pressure on us, using the scarcity principle (interested in more info on Dr. Cialdini persuasion principles: click here and here).

Ok, enjoy your day and, as usual, think: more profit is just few thoughts away.

K

Headlines, Headlines...

2005-03-27T16:30:00.000-06:00

All right, I knew it: my first post would be about headlines...

It still amazes me how so few companies have any clue about the power of headlines.

It's cute to see professionals struggling to compose the best text/copy for their ad, and not paying attention to the headline.

"Hmm, Sir, if the headline is boring, nobody will read your ad/article/posting"...
The answer is usually "Oh sure, you are right" and for few seconds they seem to understand. Then, back to usual...

So, I really enjoy when I see professionals of headlines at work. Check this one out:

Now, only a person that lived in seclusion in a cave for 20 years would not know the people listed in this headline. And they way it's proposed, it is almost impossible NOT to open the envelope.
Which is the function of the Envelope headline... getting the package open...

Ok, it's all for today: little Headline, you did your job on that cute yellow envelope: you got me curious and you got me to take action and open it !

Till next time

K

Hello World! and God Bless GiuseC

2005-01-27T11:59:00.000-06:00

This is my first posting on the Blog and I want to dedicate it to thank GiuseC for helping me out: GiuseC , you rock !