Free Friday

In the U.S. today, we see the incredible power of price on consumer behavior as millions of people storm retail stores around the country in search of bargain.

One price point being used frequently is Free. The Apple Store will give you Free shipping and $21 off the retail price of a new iPod Touch if you order it today. Best Buy will give you a Free $30 gift card and Free shipping today and tomorrow. And ToysRUs was offering a Free $50 gift card with the purchase of an iPod Touch if you got to the store today before 1PM.

I have been fascinated with Free since the July release of Chris Anderson’s book. The concept is constantly seeping into conversations about newspapers, books, music, movies, and television. And with all of the talk, we seem no better prepared to discuss Free with intelligence. The dialogue gets bogged down in incongruent comparisons of apples, oranges, and antelopes with the collision of economic theory, legal precedent, and moral consequence.

On January 7th, the six month anniversary of Free, I am going to release an ebook about the concept of Free–my attempt at clarifying the salient points around Free and provide some paths we can all use to move forward.

The 11 Problems That Kill Organizations

Or The Eleven Focus Areas for Consultants to Sell Services.

This list is from Alan Weiss’ Million Dollar Consulting. The fourth edition of the book was released in July and about half way through the book, Weiss says that he got out of organizational consulting because all the problems started to look the same.

  1. Leadership is inept in that key people are not serving as avatars of the behavior they are seeking in others.
  2. Team building is sought when, in actuality, the organization has committees and needs committees, not teams.
  3. There are silos headed by powerful people who are defending their turf.
  4. Problem solving is prized over innovation, and “black belt nine delta” nonsense takes over people’s minds like a bad science fiction movie from the 1950’s
  5. There is excessive staff interference instead of support, typically from HR, finance, IT, and/or legal.
  6. There are too many meetings that take too long and are overwhelmingly focused on sharing information—the worst possible reason to have a meeting. The organization’s talent and energy are being squandered internally instead of being applied externally
  7. The customer’s perceptions of the organization’s products, services, and relationships are different from the organization’s perception.
  8. The reward and feedback systems are not aligned with strategy and are not encouraging the appropriate behaviors and discouraging the inappropriate.
  9. Strategy and planning are mistaken for each other.
  10. Career development and succession planning are not wedded.
  11. The organization is bureaucratic , in that it focus on means and not ends.

So, do these look like the same problems that you over and over again in the companies that you work for and with?

Insights Are Better Than Ideas

DDB Worldwide recently published a “yellow paper” titled Insights that Incite (hat tip:PSFK). The gist of their “brochure” is that it is hard to break through all the clutter and you need to find something unique and unexpected to change how people think about your brand—pretty much what you would expect from an ad agency.

This reference though reminded me how much I love the word insight, something I owe to former BBDO chairman and agency man Phil Dusenberry. He had the best definition I have ever heard for insights in his 2005 book Then We Set His Hair on Fire:

In this book, I have stressed the difference between ideas and insights. Ideas are a dime a dozen; anyone can have them. They can be good or bad ideas, saving your hide in some cases, wasting your time in others. The best thing about a good idea is that it forces you to act. Insight is rarer, and infinitely more precious. A strong insight can fuel a thousand ideas, a thousand reasons to act and make something happen. That, more than anything, should be your reason to fight and persevere for your own insight moment. When you are armed with a powerful insight, the ideas never stop flowing.

Think about the really great business concepts. Porter’s Five Forces Model is an insight. Each one of Covey’s Seven Habits is an insight. Control Your Destiny or Someone Else Will, the title of one of the definitive books on GE, is one of many insights Jack Welch used when he was CEO of the company.

If ideas are intellectual lightbulbs, insights are 10,000 watt searchlights. Insights illuminate a wide range of paths to take. They provide the “why” which lead you to a plenitude of “hows.”


source

Side note: Then We Set His Hair On Fire didn’t sell well in hardcover and was released in paperback under the title One Great Insight Is Worth a Thousand Good Ideas. Even with the better title, the book has some identity problems. At times, it is a biography and at other times a how-to with case studies. If you can look past those conflicts, you’ll hear the inside stories of brands built like Pepsi, Visa, and FedEx. Dusenberry’s book is one of my favorites of the last five years.

Boom Goes The Resume

Seth has a great post up titled Why bother having a resume?

There is something comfortable about the standards of a resume. You know how to fill in the blanks. The format has already been worked out. The only question left is if you are going to send it in a Rich Text Format or Word Document.

If you blow up the resume, the questions are wonderfully endless.

  • What I am going to say?
  • How I am going to say it?
  • Is this really what I want to do?

I was describing my career to someone last week and realized the textbook method doesn’t really explain who I am or what I want to do next. Today, I was looking at the description at the top of my tumblr blog and came to the same conclusion.

Every person is a sum of their experiences and certainly my mechanical engineering degree and the time at General Electric is important, but there are a whole set of new things that show better what I can do and want to do with my time.

This image is from a document I turned in for a chance at an internship with Ben and Jackie from Church of the Customer. I always liked this representation, experiences overlaid and fading with time. That collage is three and a half years old and would look quite different today.

ceresume

As I look at the things that I am interested in now, there are seeds in those past projects and positions, but they would be hard to see through bullet points and required corporate speak of a standard resume.

This post should not be considered by anyone reading that I am looking for a new corporate home. Seth’s post just made me think about the stories we tell other about what we do, both in form and content.

First Real Evening in Austin

I had all sorts of trouble getting into Austin on Friday, so the only thing I could do was make the Blogher meetup.

Last night, I hung out with John Moore of Brand Autopsy. We talking blogging and business books. You might have seen allusions to his upcoming book Tribal Knowledge and I am sure see his many reviews.

After dinner, he took me to some great spots. Whichwich is a really interesting sandwich place. John wanted to make sure I saw this place. You can read his post on why he thinks they are so cool. I agree wholeheartedly with his conclusions. My only addition would be that this is designed to scale.

Our next stop was BookPeople. It is an outstanding independent bookstore here in Austin. I really enjoyed the experience. The story of store owner Steve Bercu and his campaign to Keep Austin Weird is a great story. It has been told a number of places, most recently in Starting From Scratch. Bercu managed to expose and rally the community here against a $2 million economic package that was being given to a developer. The development included a Borders bookstore. You can read Bercu’s letter to the editor at Publisher’s Weekly. It might scare you to know that we stood in the business book section for about an hour talking about titles.

We then walked over to Amy’s Ice Cream. This is another Austin original. Each store has it’s own culture and the employees are themselves. Each person behind the counter was wearing a different hat and all of them were spending time with customers. There was a line out the down and employees didn’t start hurrying people through. Notice that the last thing I am telling you about is the product—the ice cream was good. Again, I will give you another book reference if you are interested in finding out more. You can check out Donna Fenn’s Alpha Dogs.

The last stop was Gingerman. It has a great atmosphere and an amazing selection of beers.

Thanks John for hosting!

SXSW – Kathy Sierra

Here are streaming thoughts from Kathy Sierra on Creating Passionate Users:

It is not about the product–it is about helping them do.

What can we help people kick ass doing?

If you help users be passionate you get the some of the spillover passion.

You need to get past the brain’s crap filter.

Chemistry—people need to feel something, think about how you are communicating…weird, novel, different…keep the brain thinking that it is something important…the brain likes the unresolved. Funny..faces…beautiful…sexy…scary

Conversation beats formal lecture.

Talk to the brain not the mind…

Get people past the Suck Threshold and the Passion Threshold. There is an image of experitse, a meaningful benefit, and a series of steps to get there.

To get people to remember, you need to use emotion.

Need to balance challenge versus knowledge and skill.

How do we keep users in flow?

Get There Attention
Challenging Activity
Payoff

You need levels to keep people going.

Levels don’t need to be obvious.

Hero’s Journey

  • Life is normal
  • Something happens to change that
  • Things really suck
  • Hero overcomes bad things
  • Return to the new normal

Create Playful Work

T-Shirt First Development – people want to identify themselves with you

Give them something to talk about? Make it ambiguous. Coldplay, Fair Trade, and the two black rectangles…

It doesn’t matter what they think about you…it is about how people feel about themselves.

If spend more time in flow, they have happier lives

Tags: sxsw2006

Lucky You

I bought my brother a gift card to iTunes for Christmas.

The Apple Store At Mayfair made the experience as simple as could be. I did not know buying something in a store could be made more simple and enjoyable.

There was a special iPod desk in the front of the store. I walked up and waited in a very short line (because it moved so quickly). Most folks were dropping $250 without blinking on Nanos. I grabbed the card I needed. The clerk scan my credit card in a Symbol handheld unit. He confirmed my email address (which he already had from my past purchases) and told me my receipt would be sent directly to my mailbox. People buying hardware were told the receipt was already in the box.

The nice man placed a sticker on the top of the card to confirm my purchase. It wasn’t a sticker dot or a roll of tape with repeating Apple logos. No, it was a rectangular sticker with the Apple logo that said “Lucky you.”

<img src="http://www.apennyfor.com/images/itunescard.jpg">

Brand Loyalty Start At A Young Age

This from Money Dec. 2005:

At what age do children start to develop “brand loyalty”?

A. Six Months Old
B. Two Years Old
C. Four Years Old
D. Seven Years Old

Answer: B. By the age of two–really, two–kids can recognize a favorite brand on store shelves and let you know they want it, with words or gestures, says James McNeal, a former marketing professor at Texas A&M. (In fact, his research shows that babies as young as six months are able to recognize some corporate logos and mascots.) Once the brand lightbulb goes [on], children quickly learn the art of the nag: Kids ages four to 12 influence– that’s putting it nicely–an estimated $300 billion of their parent’s purchases annually.

Attention Economists: People Are Not Rational

Forbes profiles economist Sendhil Mullainathan in the current issue. His specialty is the growing field of behavorial economics, the combination of psychology and economics. Mullainathan did some work with a bank in South Africa in developed a direct marketing campaign for short term loans.

They varied the interest rate and also varied a number of cues designed to trigger psychological responses such as a smiling photo in a corner of the letter and table that provded more- or less-information and choice. The sample was large, more than 50,000 letters, and the study was randomized and controlled.

The impact of some the small, nonfinancial cues surprised even then study’s authors, though it probably wouldn’t have been a shock to creative types on Madison Avenue. It turned out that having a wholesome, happy female picture in a corner of the letter had as much positive impact on the response rate as dropping the interest rate by four percentage points.

As they said, I am not sure marketeers would be surprised to find people are irrational.

Links

I finally shut down the BizLinkBlog and got everything moved over to my del.icio.us account. Here is the RSS feed.

There is alot of good stuff over there and I thought I would highlight a few.

History Supplying the Stories

McMenamins is a chain of pubs located in the Pacific Northwest. Brothers Michael and Brian have knack for buying properties no one wants, restoring them, and turning them into “historical theme parks”. Restoration involves historians finding stories about prior residents and artisans painting murals of the found ‘characters’. The 50 locations will often cross-promote each other through brochures and beer coasters.

I just love the use of story in their customer’s experience.

[source: For Fun & (Minimal Profit); Forbes – 8/15/05]

Look for the Growth

I enjoy the Catalog Critic each Friday in the Wall Street Journal. This week they looked at [sub. needed] a particular type of knife known as the santoku. The business side of story was equally interesting:

[Santoku] knives have been available in the U.S. for more than a decade, but only recently have they really started to take off. Knifemakers give some credit to chef Rachel Ray, who praised the knives’ handling and sharpness on the Food Network two years ago. Knifemaker Wusthof’s santoku sales have increased tenfold from three years earlier, replacing the chef’s knife as its best-seller and now make up 10% of the company’s total revenue. While houseware sales nationwide are flat, cutlery sales rose 5% last year from the year before thanks in part to a four-fold increase in the number of santokus sold, according to the marketing-information company NPD Group.

Lesson #1 – Speak Your Customers’ Language

My father’s business was a small sheet metal fabrication shop. The majority of what we produced was custom based on drawings we would receive from our customers. Over the years, we had built a strong base in serving the transformer industry. Our ability to make short runs at a low cost matched well with the industry’s need for custom brackets and enclosures in low quantities.

One exception to our custom focus was a line of electrical enclosures we made. It started as a custom collaboration with one customer, but after seeing there was a market for them, we started offering the enclosures as a standard, stocked product to everyone.

As a sheet metal fabricator, we described the enclosures using the same specifications we would get for custom jobs. It was all about dimensions and specifications. Whenever a new customer called, there had to be a long conversation as the buyer calculated their size of the transformer and I searched to determine which box was right for his need.

One day, the customer whom we had originally collaborated with called to place an order. Dave was a talkative fellow and he was going on about how he had gotten a large order for some three phase transformers. He said his next call was going to be to order more 1.5″ EI laminations [these serve the base for some transformers].

I said, “Dave, are those standard laminations for the entire industry?”

He said, “Oh yeah, everybody uses the same ones.”

I queried, “Are the enclosures you designed with us built around those lamination sizes?”

He said, “Of course, the 13″ x 13″ x 15″ is perfect for 1.5″ lams.”

Dave quickly walked me through our entire line of enclosures and how they matched up to the different sizes of lamination.

My entire paradigm changed. I had been given a new language to speak to my customers in. I could ask them what they were using in their language and tell them exactly which of my products would work perfect for them.

Speaking the same language led to all sorts of things. We found that customers were drilling holes to make the enclosures work in some cases. That led to us redesigning each cabinet to meet a wider range of needs.

We found one cabinet couldn’t support enough weight and that customers were adding steel angle to reinforce it themselves. We scrapped the case and came up with a whole new design.

The most important thing it led to was a doubling of the number of customers that used our enclosures and doubling of the number of units we sold.

We went from being another sheet metal fabricator to a partner in our customers’ supply chains.