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On Saturday, I wanted to have a cup of coffee. There was a long line at Starbucks (makes one wonder why they are closing 600 stores) and I was not in a mood to stand in the queue. Next door was McDonalds. I had read advertisements about their new flavored ice coffee and decided to try it.
There were two choices and the person asked me what size coffee I preferred - “Medium or Large” and I said “Medium”. Then she looked at me as if I was from another planet. I thought something must be wrong and looked at the board. The two choices were:
Medium - for $1.89 + tax
Large - for $1.99 + tax
The difference was 10 cents. I asked whether I was one of the few who had ordered a medium drink. She said “You are the first one today” and in her mind, she must be thinking - “Yes, you are. Moron!”
Thinking about it, it just doesn’t make logical sense that for a lot more coffee they just want only 10 cents more. Obviously everyone is picking the larger version. Why would they not - it’s only ten cents more and a lot more coffee.
Why would McDonalds do this?
Well, there has been a lot of research that has gone into this field. Let me explain it in simple terms and then point to a research study.
Iced Coffee is new to McDonalds and hence there is no precedence for the customers to find out whether it is priced right or not. They can’t compare the price of an iced coffee to the price of a burger. So if they introduce only one size with one price, the chances are you will let the consumers guessing whether it is rightly priced or not. By shifting the criteria intelligently, you are now asking the consumers to compare the price of a medium iced coffee to a large iced coffee. And making a typical consumer think - “Wow. the large sized iced coffee is a deal”. In this whole process, the consumer has forgotten to question whether the iced coffee (medium or large) is priced in the right range in the first place.
Dan Ariely explains this concept beautifully in his book Predictably Irrational (website, book) where he talks about “Why Everything is Relative even when it shouldn’t be” in the first chapter. For a deeper discussion on the topic, please refer to the book and other works of Dan. You will enjoy reading about this and other research findings by him.
The failure of IndyMac bank is scary. It’s actually a scary lesson for all of us. You can read the full story at Wall Street Journal - Crisis deepens as Big Bank Fails. What caught my attention is the statement about what the bank specialized in. Here it is
It specialized in Alt-A loans, a type of mortgage that can be offered to borrowers who don’t fully document their incomes or assets
Just because something looks good on paper does not mean that it is good.
Think about it. Would you have deposited money in IndyMac bank if you knew that this was their specialization?
It is a referral site for the Jiffle service. It provides a brief overview of what Jiffle offering is and urges potential customers to go and sign up for the service. Think of it like a site with just a landing page. Companies do this all the time.
In this case though - this site was not created by us. It was created by one of your kind customers - Sylva Leduc. Sylva has been a long-time customer, power user and a long-time supporter of Jiffle. But creating a site dedicated to us - that made our day!
Take a look at the picture below (Photo courtesy: Kiruba Shankar). This is from an ad for the Samsung Refrigerator.
You would think that this is like any other advertisement. It’s not!
You will have to click through this link to find out how this advertisement is really implemented. (Hint: It is really not an advertisement but an Advertisement Experience)
Food for Thought: How can you create such an experience for one or more of your products or services?
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Update - July 10, 2008
I have recieved a few emails asking me why I am asking people to click through to Kiruba’s blog when I could just explain what this advertisement experience is - right here on my blog.
The answer is simple.You see - my first four published works were fiction. Specifically they were murder mysteries and spy thrillers. So I love suspense and wanted to create some suspense on the blog.
Just kidding..
Really, this interesting ad experience was discovered by Kiruba (who is a long-time friend) and rightly you should hear about it from him. Explaining everything on my blog and giving just a credit link won’t do justice as people may not click through the credit link
Anyway my $.02 only. There is no right or wrong way in these things. You do what your gut says. Sorry for those who thought I created an inconvenience.
After a long career in the traditional corporate training world, WayneTurmel is now the president of www.greatwebmeetings.com, which helps people develop the sales and presentation skills necessary to communicate effectively when you can’t be face to face with your customers. He is also the host of The Cranky Middle Manager Show, one of the world’s most popular management podcasts. (You may have heard our interview together a year or so ago)
I met with Wayne Turmel some time ago when he first interviewed me for his podcast show “The Cranky Middle Manager Show” on the topic of Personal Branding. Here is the link to that interview
I learnt that Wayne is now helping companies of all sizes to make the most of web meetings. In this interview he makes a business case for his business and gives some insights on how you can make the most of web meetings.
Here is the interview:
RS: Wayne, This may be an obvious first question – Can you make a case for salespeople to use webmeetings?
WT: The costs of sales are growing exponentially. Travel costs are going through the roof while travel budgets are getting slashed. Sales people are expected to better qualify their prospects before setting face-to-face calls and fewer bodies are covering larger territories. Any tool that helps speed communication is going to get a good looking at. And the cost of a webmeeting instead of going to the customer site can’t be beat- as long as they’re effective.
RS: Studies show that many sales people don’t like these tools (and avoid using them)- why not?
WT: Sales people by their nature love to be face to face with their customers…. Sales is based on a relationship, and it’s hard to fashion good relationships just through email or on the phone. Many people view webmeetings as one-way communication that doesn’t offer them a real opportunity for building those relationships…. and no wonder. The Vendors of these programs teach the tools you need to push information out, but most people never get taught to use the interactive components of these tools… they’re too busy figuring out how to use them at all never mind use them well.
I always use the analogy of PowerPoint. How many sales people got handed their first laptop with a presentation on it and never received coaching on how to use it? We sat through horrible presentations…when they could even get the projector and computer to talk to each other….how many hours of our lives were wasted?
RS: Audiences aren’t too crazy about them either….
WT: Our research shows that audiences quite like web demos if they are well done and focused on their needs. After all, they don’t have to leave their desk or have a sales person in their office they can’t get rid of. But they are often considered a waste of time. In fact we did a YouTube video on why audiences don’t like them… and some things you can do to make them more interactive and focused. It’s called Why Web Demos Suck- And What You Can Do About It.
Generally the most common mistakes according to our research are:
• Not being relevant to the customer’s business
• Too much information, most of it irrelevant at this stage of the sales cycle (going too far into features and specifics before they even know if they’re interested in the product)
• Not answering the customer’s most pressing questions in a timely manner
• The people doing the presentation are often subject matter experts but not compelling presenters (the word most often used was BORING)
RS: So, what are some of those things sales people can do?
WT: Just as in a face-to-face meeting you want to ask lots of questions and focus on what they really need, the interactive tools in webmeetings allow for two-way communication. Most sales people are so nervous about using the tool, though, they simply push information out. A wise sales organization will make sure that people not only get real-time practice with the tool before they are in front of a prospect, but they understand how to use it as a two-way communication tool, not just a one-way presentation platform. That’s what we teach at Greatwebmeetings- the sales and presentation skills they need to really engage their customers and be as effective “virtually” as they are in a face to face meeting.
RS: Can you please give an example?
WT: Sure. A software company in the Midwest had a subject matter expert who did their software demos. She was a very good presenter- engaging, fun to listen to- but her conversion rate with customers who had requested demos was about 50%. We worked with her to do a number of things. First, identify her outcome as the presenter, which was to get her customer to agree to a trial of the software. Then to ask plenty of questions before she started presenting (to avoid information the client wasn’t interested in) and to get to the customer’s most pressing questions right away. We also taught her a technique for presenting features tied to what the customer told her during the questioning and confirming buy-in before spending too long. Not only are her presentations generally shorter now, but the number of prospects moving to a trial of the product went up over 20%. Her CEO is delighted, needless to say.
RS: Isn’t there plenty of on-line training available?
WT: There’s lots of information, but much of it is in the form of recorded lectures and webinars. True training has three components- it addresses the real work the people have to do, it allows for self-discovery, and it’s assessed to see if the person has really learned something and get coaching and reinforcement of the new skills. With a regular presentation skills program, you’d expect people to get up and present after the training and show improvement. All our programs do that. Training without demonstrating improved performance is a waste of time and money.
Having lived in the Silicon Valley for more than a decade now, I get to hear ideas almost ALL the time - in various shapes, sizes and forms. Ideas, like most things in life, follow a normal distribution curve. Of the ones that I understand and can make a reasonable assessment, there are good ones, bad ones and most are average.
For whatever reason, there is a lot of emphasis on the “value” of the idea and less emphasis on the “value” of the execution of the idea. Actually, I can think of many reasons:
1. Coming up with ideas usually takes less time than actually executing on one of them.
2. If your idea fails at the idea stage, it is less painful.
3. You can talk about your idea as if you can easily execute it. But you can’t fake execution
4. You can change your ideas in a day but it is hard to change the execution course easily.
5. You can appear to be smart with more than one idea. Unless you are a chronic parallel entrepreneur, it’s hard to work on executing on more than one idea
6. Ideas are fun. You need a lot more brains and help to make execution fun.
7. You alone can support an idea. Rarely you alone can execute on the idea. You need a lot more help for executing on the idea.
8. Most often stakes are low for an idea. Stakes are high for almost all cases of execution.
One would think that people should be worried like crazy on executing on the idea. It is way more complex than painting a rosy picture through an idea. Unfortunately that is not the case. People are disproportionately worried about the idea. On a lighter note, some behave as if this is the last ever idea that will come to them. So they hold on to the idea with both their hands and by the time they act on it, it’s already too late (somebody else somewhere in the world has acted on it or technology has changed to make the idea irrelevant)
So, whatever is your idea - stop worrying about it and start focusing your energy on executing on it - if you are serious about executing on it, of course!
A blonde and her friend were driving past a gas station. The friend remarked - “These gas prices are going through the roof like crazy. Are you also upset?” The blonde responded immediately - “Actually, I don’t know why people are making a big deal about it. I always put gas for $20 every time. So I don’t have any problem”
Now, the brilliance of the Adwords model:
Companies can advertise on Google Adwords and bid higher to be placed higher on the ad stack. When one or more competitors try to outbid them, they can increase the bid even higher to ensure that they hold the place. If you think about it, every advertiser for a keyword is competing with everyone else to PAY MORE TO GOOGLE than the other player. You can almost visualize them as screaming “Allow me to pay more to you Mr. Google” and we will fight like crazy to ensure that we are the highest payers for using your service.
Now, the connection:
In the last couple of weeks, at three CEO friends told me that they have been advertising on Google Adwords for the last few years. Today they can only buy half of what $10K would have given them two years ago.
Now, the real question:
Unlike the blonde near the gas station, the CEOs know that they are getting less for the same money and they definitely want to explore alternatives. The real question therefore is “What are those alternatives?”
I have written about Globat Automatic Upgrade scam before. I have been busy to switch to another hosting company but I don’t think the company will ever learn how to “serve” the customers. I got another promotion that I had to opt out.
Here is the page where they ask me “why I am opting out”
I was at a cafe this afternoon and ordered a chai. The sleeve for the coffee cup had an advertisement. I am not complaining about the advertisement - they have to take up every bit of real estate anywhere to communicate to us, right?
The content of the advertisement, though, was funny
Here is what it said
“I don’t know what you are doing, but keep doing it”
“Nothing starts your day like coffee and a little positive reinforcement”
On the same lighter note:
First, if what you are doing is not working, there is no point in continuing to do it. Second, if what you are doing is taking you nowhere, positive reinforcement and coffee will take you to nowhere faster.
GMC might have made this work just because there may be other people like me who may have a conversation about this ad. However, GMC could also have gotten better attention just by providing something really valuable - think about something that will make someone throw away the cup but actually collect the sleeve of the cup. I am sure they have spent a fortune to get their name on those sleeves. Spending a bit more to make it memorable would be just worth it.
You want to be an “also ran” in the rat race? If so, no worries - technology will help you do that. Quickly.
There are many ways to do it. Really. I have an example of a Business Development email that I received (unsolicited, of course) a while ago. You can read the entire email filled with cliches and claims that are “very common” from vendors of that category.
First, an unsolicited email rarely does the job for a long-term relationship. I think the better way would be to get an introduction from someone. This would mean lot more work upfront. Hence people resort to the aid of technology and blast emails en-masse and hope that a “small” percentage will respond favorably. In fact, a small percentage of them may respond back - almost validating their original premise. In turn motivating themto continue to do what does not work really.
Anyway, back to the point, please read through the email and you will notice that the sender tries his or her best to be one among the many. He or she has followed all the best practices and the current buzzwords to ensure that he is “compliant” with the crowd - in the process eliminating himself out of the race. What is lacking in the email is simply that he or she has failed to show why the offer is “relevant” to my business and failed to establish a relationship prior to adding me to the list of recipients.
Technology provides a great competitive advantage if used right. It will also prove to be a “competitive disadvantage” if used wrong.
