Gary says it like it is. Please stop doing that.
Many
of you out there may have a negative view of capitalism, but I’m willing to bet if you’re business minded, this is not the case. My inspiration for today’s post came from one of my favorite teachers. Last week we were presenting in one of my finances classes and the topic of the health care reform bill came up. One of the students asked the professor, “What do you think of the bill?” His quick and witty (yet honest) response made me appreciate and remind me of why I was in his class. He said, “I don’t know, I haven’t read it yet, but I’m sure I’ll figure out a way to make money off of it.” Genius!
This opened my eyes a little more to the fact that we need to be constantly thinking creatively (coincidentally he also teaches a creative thinking class). I’m pretty sure he didn’t have that response waiting until someone asked that perfect question. It was just a second nature reaction. This is what we as business people should be aiming for. We should constantly be thinking of everyday things that we can turn into profit for ourselves and our companies.
So What?
The so what of this post has basically already been stated, but I hope you can pull a deeper 
meaning from it. Often times, when a person brings up a subject such as a new bill or anything really having to do with politics, they more than likely want to strike up a conversation, maybe for boredom’s sake or maybe for plain debating. But we need not be suckered in and miss the bigger picture. As a capitalist, I want to be able to have the Midas touch; that is turn every situation possible into a profitable outcome.
I’m no expert on selling, however I have worked my fair share of sales jobs. And really no matter what industry you are in, you’re more than likely trying to sell some product or service to an end user. You and your company are battling against others to try and convince consumers why your “whatever” is better than the next guys. But it’s not that simple. You must do more than just sell a great product (there obviously are a few exceptions). The following paragraphs will seek to highlight a few of the things that great companies do to increase and keep customers.
Sell an Experience
Like I said earlier, few companies have products that are so good that they sell themselves. Most of the time a company must sell itself to consumers in order to sell its actual product. When a customer is contemplating where to purchase a particular item, and price is the only difference, they will most often select the store with the lower price (as one of our bloggers Zach did when purchasing his new Flip camera – read his post here). If a company wants to make any sort of profit, they probably will not do so by trying to compete for the lowest price (unless they are the mega store Wal-Mart). So what must they do to make their more expensive product worth while? Sell an experience.
How?
Selling an experience isn’t easy, but when done correctly can be great for both the company and the customer. Many times when I go to a store to buy a product, I want to talk to someone who is an expert on the product and can reassure me that it is a good purchase decision. I want to be greeted at the door, remembered from my previous visit, be offered add-ons that I might actually need, and have some type of frequent shopper bonus. This would be a great “experience” for me as a shopper. One of the biggest elements I just mentioned (from an employee standpoint) is customer recall. A friend of mine told me recently that every time he goes into Starbucks, the barista on duty greets him by name and asks him “hot or cold?” That’s amazing to me. Starbucks has done such a great job at this element that of all the customers seen each day of the week, the barista can still remember a single customer’s order. Amazing.
Nice SHUs
No not shoes, SHUs (Super Heavy Users). A super heavy user is pretty self explanatory; it’s someone who uses a certain product or service often. McDonald’s definition is someone who eats at their restaurant at least SEVEN times a week. I would consider myself a super heavy user of electronics. I use them all the time, never get tired of them, love talking about them, and love buying them. So i would be perfect for a store that sales electronics. What I’m trying to say is basically that companies should hire super heavy users of their products to be employees. Who else better to talk to a customer about a product they love than someone who uses it every day. Some examples of companies who do this are Best Buy (look at all the geeks who have worked there, myself included), various clothing stores (where the employees are only allowed to wear that specific company’s clothes), Nike (who many times hires athletes to sell and develop its products), and many more. Having an employee who loves what he is selling and has actually used it before, compared to an employee who only has book knowledge of the product, makes such a big difference.
So What?
If you want to sell a premium product (or any product for that manner) and not be competitive with price alone, you must do something better – offer something more appealing that competitors are not (an experience). And have the people that are selling the product actually be interested in the product and willing to tell the world how much they love it. I believe these few simple changes could make any company that much better.
What is a wallet?
Several years ago while living in the dorms at college, a few friends and I had this idea for a product. It would be slightly smaller than a piece of paper, and maybe a half inch thick. The thing would be a touch screen and you could do all sorts of things with it… Sadly, we thought of the iPad about 5 years AFTER Apple starting making it. We knew there was no way to make it happen any time soon so we just sat back and watched.
About a year later I got an iPod touch. Every time I would see one of my friends I would talk about the core functionality that it was still missing that we had talked about. Then the iPad came out… Basically the product we were thinking about and about a thousand times better. Yet, it was still missing several of the key functionalities. Yesterday I got an email from Starbucks that delighted me to no end.
I knew there were a handful of stores on the west coast that allowed you to pay with your iPhone / iPod touch, but honestly this is what I’m talking about. I salute Starbucks, Target, and Apple for being awesome at what they do. I’m tired of carrying around Starbucks membership cards, gift cards, etc. The idea that I can whip out what’s already in my pocket for yet another task in my daily life means I can save some time, energy, and thought.
So What?
I’ll tell you so what. If you don’t see this as a huge, blinking arrows pointing towards the future, let me help you out. The iPhone / iPad / iPod will replace our wallets, period. Wallets will most certainly be a thing of the past. If you make wallets for a living… sorry. Your time is limited! If you code for a living, there is lots of money awaiting to be made. Here is a list of what’s in my wallet:
- Student ID
- Credit / Debit Cards
- Business Cards
- Starbucks Gold Card
- Drivers License
- A $1 dollar bill
- AAA card
Imagine for a second when Visa and Mastercard produce an app. When checking out at a Target or Wal-mart you will no longer have to swipe a card, you’ll just click your Visa app, enter your password, and maybe press your thumb print to the screen and then put the bar code over a scanner like you do with products at the self checkout.
Ever have a situation at a store where you want to use $50 from your bank account and use $15 on your credit card? The Visa App can do that. Ever have a friend go to the store and how him $5.03? I can send you $5.03 from my Visa App. Now all of your accounts can become one, giant bank account.
Business cards you say? Imagine being able to store all the business card you ever got into a clean, easy to use categorical system. Also imagine that you can never run out, no matter how many you have given away at the conference you are at.
Do I really need to continue with this? Before it’s all said in done, Capital One won’t be able to ask “What’s in Your Wallet” because none of us will have a wallet. We will just have our iPhones or iPads or iSomethings. I imagine there are great companies out there right now figuring this stuff out. Will you be in on it? Either way you’ll enjoy the benefits of what’s to come. Here is a salute to Starbucks, Target, and Apple for pushing us into the future.
Zach
The economy is down, but should your prices be? Many people think that this is an obvious “yes!” But this may not be a solution. Many entrepreneurs say that in an economy such as this, lowering prices can actually hurt your company because it may be hard to re-raise prices when the economy picks back up. So I say stay consistent. Take Wal-Mart for example. They are known as THE low price store. This is why they never have sales. Yes they have “rollback” prices, but they don’t have store wide sales of “25% off this week only.” They know who they are and they stick to what they’re good at.
Getting Personal
So what should your company do? Many people have the preconception that customers either want high quality at a high price, or low quality at a low price. Until recent years, there has not been a middle ground due to this misconception. 
In their book “Mass Affluence,” Paul Nunes and Brian Johnson argue that there is a segment of customers in the marketplace that are not currenlty having their needs met. They either have to pay too much for a product that does more than they want (say a $100 electronic toothbrush) or an inexpensive item that doesn’t do enough (A normal $2 toothbrush). A solution to this is a middle-of-the-line electronic toothbrush for around $10. Consumers wanting more functionality but not top of the line will finally have their needs met.
Raising the Bar (and Price)
In America, in order to avoid having to compare too many options, many people have created a shortcut when purchasing items. This shortcut is “expensive = good.” This is great for merchandisers. A good example of how retailers can cash in on this is told by Robert Cialdini in his book Influence The Psychology of 
Persuasion. Cialdini one day receives a phone call from a friend who
owned a jewelry store. A certain type of jewelry was not selling well so she informed her head saleswoman to sell the jewelry at “price x 1/2″ (The owner was going out of town so she just left a note). The saleswoman misread the not and accidentally sold the jewelry for twice as much. When the owner returned, every piece of jewelry that was increased by 2 was sold out. Why? People used the shortcut of “expensive = good.”
So What?
The so what for this entry can be taken in many different ways, and I would suggest that each company take an individual approach to pricing. Many people think “sales are down so I should lower prices.” This can’t be more wrong for companies who are trying to differentiate themselves with quality. I’m not telling you to do it, and can’t be held responsible if sales decrease, but you might want to consider raising prices instead of lowering them. It just might surprise you.
-Austin
