Roy Weissman's Octopus: Doubling Profit Margins by Empowering People

Jerry Yang of Yahoo - Don't you like customers?

Within the last few months it has become known that Yahoo is no longer accepting applications for their Ambassador Program.  This is their program to certify Search Engine Marketers as experts on Yahoo PPC marketing.  This is similar to Google's Qualified Individual's and Company's program. 

Who wouldn't want a sales force that costs you nothing and pays you for the privilege of selling your product? That's what these certification programs are.  They are excellent ways to grow your business.  Why Yahoo would cancel such a program is unknown but I believe that its a very poor decision.

Further in this post they present a rumor that Yahoo is only discontinuing its Ambassador program for the smaller players and still working with the largest agencies.  This is better than nothing but truly demonstrates Yahoo's lack of understanding of their business.  While there is no question that the largest accounts drive the volume of the business, its the smaller guys that typically drive the highest margin business.   

Yahoo's ability to nurture the smallest and most profitable players with a certified expert "sales force" is very valuable.  But it seems that Yahoo continues to reinforce Carl Icahn's efforts by making decisions that hurt rather than help their business.

Don't you hate the check out line? Buy an Apple anything!

I may buy something at an Apple store just because its so easy.

How many times have you gone to a store only to abandon a purchase due to a long line at check out?  I do it all the time.

Starbucks wants to know how to improve sales...speed up check out.  Its painful to watch cashiers study the register to find the right button or have them repeat the double latte vanilla with chocolate order for the third time.  I truly believe the check out line in most stores is one of the greatest "sale killers".

I was at the Apple store in SOHO the other day to investigate a potential purchase and, while the store was quite busy, there were many employees eager and knowledgeable who answered all of my questions.

But the best part was that they all, and I mean ALL, have hand held credit card swipe machines.  Every floor employee was able, not only to answer my questions, but to take a payment and process the order.

Is Apple and Steve Jobs so smart or is everyone else so dumb? 

By the way these hand held devices are hardly new. They have been in operation for at least 20 years.  Republic restaurant in Union Square has been using them for at least 10 years.

What do I need to do to Get a Job?

How many times have you submitted your resume and a letter for a job online and heard nothing?  Would most of the time be accurate?  How long did you spend composing that letter and studying the job to do it just right?

Isn't it time someone did something about it?

Well don't hold your breath...they still don't get it.  They are still selling features and not benefits.  They need to read my favorite article Marketing Myopia by Theodore Levitt

As a paid user of one of the largest online job sites I was asked to participate in "usability" testing.  They showed me lots of nice boxes with statistics, # of new jobs added, # of recruiters doing searches, # of open jobs...and lots of other nice stats.  All the stats were in the aggregate and represented averages of all users on their site.  How about the "average" user responed to 12 ads and I responed to 6.  The average user got 3 responses by responding to 20 ads while I only got 1 response by responding to 10 ads (all these are not real numbers but represent the kind of stats they would be showing)

They wanted to know what I thought and I told them the information would be good as an ad in the New York Times or Wall St. Journal but to me it was meaningless.  Lumping all job seekers into one big stat is like setting your compensation goals based on the average US compensation of $43,000 per year.  If you are a CEO candidate does that mean you should be happy with anything over $43k?

I suggested that their users (job hunters) really want to know what they need to do to get a job or at least an interview using their service.  I suggested that they redesign their site to provide as many resources as possible to guide and help their users answer that question.

Maybe the solution to this problem is to replace the current product managers at the job sites with those that are currently looking...then their employees would know what it's like to be a job seeker. 

Is it Hardware or is it Art?

Just had the opportunity to see one of most creative art shows.  It is at a hardware store in Williamsburg, Brooklyn.   The show features 100 artists including Eric Haze, Lee Quinones, Kaves, Mikal Hameed, Tim Spelios, Wendy Klemperer, Greg Barsamian and Michael Alan.   

The Crest Hardware store at 558 Metropolitan Avenue in Williamsburg is the host of this unique annual art show.  The best part of the show is that the artwork is "woven" into the store.  Sometimes its hard to tell the art from the hardware.  What amazed me is the enormous range of creativity displayed.  No pieces are even remotely similar.  Hard to believe so many artists approached each piece so differently.  If you want to see it you better hurry up...the show's last day is July 11th.

Here are some pictures of the show.

Closed vs Open Systems - Are you still closeted?

What is the value of an open system vs a closed system?  Should you keep all your content on your web site or syndicate it out?  According to Allen Stern in Just How Much is the Conversation Worth keeping everyone on your site could be worth an additional $100,000 per year.  Robert Scoble weighs in with the mention of his discussion with an "A list" blogger who wants all his comments exclusively on his site. 

Remember Wang?  Most people don't. 

Wang literally "owned" the word processing marketplace in the early to mid 1980's but they kept all their technology to themselves, so did Apple and Macs; they never grew above a few percentage points in market share until they added the ability to run the Windows operating system on them. 

Bottom line is you need a team to succeed.  Its very hard to do it all by yourself.  If you are planning on selling your business in the next 12 months keep everything to yourself and squeeze.

Just hope your competitors don't far surpass you while you're squeezing.

Pay what you want:Radiohead Inrainbows CD

Kudos to Radiohead for choosing to offer their new CD as a download online for whatever price you want to pay.  Thats right, when the album becomes available on 10/10/07 you can go to inrainbows.com and pay whatever you want to purchase the download.  Of course you may have to pay a transaction fee and we don't know what that will be.

If you want a CD, that will be sold at a fixed price most likely in December.

So is this a good idea or bad idea?  I think its a great idea for these reasons:

1. Radiohead is no longer affiliated with a record company and therefore has to do all their own marketing-what a great way to get press with a pay your own price promo.

2. Radiohead is not exactly at the top of the charts and would like to sell more albums-this is a great way to rekindle old listeners and get new listeners to try Radiohead-don't forget if I buy this one for $1 and really like their music then I have to pay full price for everything else.

3. If this album is successful and they introduce another album shortly thereafter the increase in sales from this album's free trial could effect a larger sales of all future Radiohead CDs.

Finally the best part of this is that we can now see what Radiohead is really worth.  This could be inspiring for the group or not so inspiring.

Hello Mr. Jones, push 3 for wine to go with your steak?

First there was mass mailings, then we had personalized mail, now its data mining for even greater targeting and....

...now all this is coming to a TV near you.  I'm talking about Addressable Advertising in video, that is the ability to target different video ads to different households.

The pros are obvious, the ability to better target your ad by viewers demographics.  The advertiser could simply do their own data mining and then provide the specific names for each ad to the cable company for broadcasting.

While Addressable Advertising exists today, it is not widely deployed, however Comcast expects to have the technology fully rolled out within 2 years.  One company to watch that is right in the middle of this is Visible World who has been very active providing the necessary technology.

Advertiser sentiment is mixed, on one hand more effective targeting could generate superior results, however one would have to weigh that against the added cost of the additional spots.

"There's so much potential for backlash here," says Peter Kim, who analyzes advertising for Forrester Research. Voters will ask: "Why did this candidate say this thing in primarily Hispanic households, versus this other thing in Caucasian households?" he says.

Soon your food could contain an RFID tag and the TV ad could present that meal's dessert choices...all with the ability to order and have it delivered by pushing a button on your remote!

IPTV is real and in Korea for only $10 per month

Would you pay $10 per month to see an unlimited amount of any shows you missed...no recording necessary?  Say goodbye to the DVR say hello to the download.

Wake up America! While American media creators argue over how to do it, the Korean's, Chinese, French , Spanish, Italians and Belgians are already reaping financial rewards.

US studios still severly limit what they will release to Pay Per View and broadcasters are holding their shows close "to their vest".  America has volumes of media product gathering dust on Hollywood's shelves.  IPTV is an opportunity to monetize all this unused content.

In Korea, Hanaro Telecom, just announced that it had 500,000 customers paying for their IPTV service.  The way it works is subscribers can download any show they missed (with a slight delay from its original broadcast-usually less than 24 hours) through the Internet and then they watch it on their TV.  Customers can choose from over 20,000 programs, a figure that regularly grows as new shows are broadcast.  According to Hanaro, the average customer downloads about 160 hours per month and about 35% buy at least 1 pay per view program per month.

In Hong Kong, PCCW Ltd. has 800,000 subscribers to its IPTV service.

Why downloads and not streaming?  Hanaro didn't want to wait for government regulations to change regarding streaming and also believed that a download service would be truly unique and different from competitors focused on streaming.

So what is America to do?

Why not create the download services here?  Studios and broadcast networks could create the "home server" which is licensed and authorized to receive all the programming you want overnight through the Internet.  When you want to watch a show some would be free with commercials and some would be Pay per view or you could purchase the film for unlimited use, just like a DVD.  Studios could simultaneously release a film to all home servers and set a fixed availabilty date.  First run films could carry a higher initial purchase cost while older films would be less.  Broadcasters could control how their shows are viewed (no elimination of commercials) and possibly also get viewership stats back through the Internet.

So, what is everyone waiting for?

Farecast guarantees the lowest airfare for your next trip...

Tired of having to book non-refundable airline tickets within seconds or lose the low fare?   Now you can buy a 7 day insurance policy for the lowest fare.

Farecast is a company that, using a complicated algorithm and system, predicts the price of airfares over the next 7 days and, for a fee they'll even guarantee the lowest price to you.

You input the chosen route and the dates of travel and Farecast gives you a prediction to buy now or neutral or wait if they expect fares to decrease for your travel dates in the next 7 days.  If you pay them $9.95 they will guarantee that you will receive the lowest fare if you purchase within 7 days.  If you buy their protection and purchase the ticket for the same route and schedule and receive a higher fare then their prediction, they will reimburse you for up to $200 to cover the difference between the guaranteed low fare and the current low fare.

This is truly the most innovative airline ticketing service I've seen.  Although only time will tell if their algorithms are accurate or if they go broke.

First, they should target this to the Wall Street types, traders will love it.  Of course they might find a way to beat the system (but maybe that will help Farecast perfect the service).  Traders would buy price guarantees and then find some way to arbitrage them.

Assuming that Farecast's algorithm works, this could be a great story to tell. However my biggest problem with Farecast is that the airlines will hate them and make changes which could challenge Farecast's algorithm to keep pace.

The airlines hate competing on price yet they find themselves trapped to do so.  Numerous automated online services have been created to help consumers get the lowest airfare. Airlines hate this since they are trying to maximize their revenue per mile not help consumers pay the least.

Farecast needs to find a way to get the airlines to embrace them. None of the services (ie:Kayak etc) have tried to work with the airlines.

I believe that, if Farecast and the others don't find a way to work with the airlines instead of trying to exploit the airline's pricing weaknesses, over time the airlines will find a way to thwart or substantially interrupt the efforts of all the automated price searchers.

 

IKEA Leaving Money on the Table...

What if you had a business that did billions in revenue would you still want more?

I recently went to IKEA in New Jersey to purchase a wall unit.  As many are aware IKEA has been the champion of low cost nicely designed furniture for the home and small office.  8 years ago I furnished an entire business with their office furniture and the quality has held up well.  However in recent years I found their quality and designs declining.

We now needed a wall unit at home and we've been looking for the last 8 months to find a well designed and reasonably priced option.  Well we have found it in a recently introduced design at IKEA.  We spent about 7 hours at the NJ store this week to design and purchase the unit.

However they could have sold us lots more but they didn't appear to care either way.

IKEA thrives on the self serve concept and as such dislikes too much personal service.  I think they begrudgingly offer a design service for customers (which they actually used to charge for).

Now how could they have sold us and others more?  1. They do not have Computer Aided Design (CAD) software for most of their furniture-a wall unit is most easily desigined online however our designer used a pen and paper. 2. We had no way of seeing what it was going to look like-we just could only imagine it. 

Imagine a software program that, not only had a Computer Aided Design (CAD) element but one that also knew which inventoried items would compliment our wall unit?  They might have sold us lots more--pictures, vases, small tables etc.

IKEA is truly a store of choice stocking some astronomical number of items; we went to the lighting department and were overwhelmed with the choices.

How about a Designer Alliance where customers could just call a designer and they would use all IKEA items to design your home?  In NYC people love being served...I can only imagine the significant additional volume IKEA could do in NYC if they opened a NYC showroom staffed with Interior Designers.

The "store designer" that helped us could have spent 1/3 of the time with us and sold us lots more if she had a computer program to help her.  IKEA could generate substantially higher revenues and profits with a Designer Alliance-this is kind of like restaurants offering delivery and take out--they extend the sale of their product without having to add physical space---higher margins and higher sales.

What are you doing with your business to extend the reach?  Are there key market players like a designer for IKEA that could not only get you more sales but do so in a way that maximizes the value of your product?  Just think how IKEA customer satisfaction could be increased substantially if their home was professionally designed with stylish furniture and accessories.