Book Review: The 1% Windfall by Rafi Mohammed

 

Suggested Readership:

• Business students (Learn about pricing)
• Business people (Learn how to maximize profits)
• Marketers (Learn new pricing methods to reach more customers
• Anyone selling a product or service (See above)

Notes:

This is not a book filled with complicated equations. The text is written in everyday English.

The book is sprinkled with figures that bring data together in an easy to understand way. Chapters One through Seven each conclude with “Key Takeaways.”

Personal tweets from the book.

The notes below were posted to Twitter as I read the book.

• "... Know your product attributes and then stand up for and capture the value of your products and services." #t1pw (p. 23)
• "Understanding how customers benefit from a product is integral to better pricing." #t1pw (p. 23)
• "... most brand-name products have the opportunity to sell to more customers by providing a range of options." #t1pw (p. 70)
• "... the BLS has determined that 94% of airline tickets are discounted coach, 4% are full-fare and 2% are first class." #t1pw (p. 71)
• "It is estimated that snack-size packages are about 20% more profitable compared to larger sizes." #t1pw (p. 76)
• "... bundling a product with others can yield significant growth in value and thus profits." #t1pw (p. 80)
• "Events that don't offer multiple prices are cutting off consumers." #t1pw (p. 82)
• "Rebates are attractive to sellers because approximately 50% of eligible customers don't follow through to get their cash back." #t1pw p. 90
• "At Burger King, bundled meals represnt 51% of total sales." #t1pw (p. 99)
• "Reserve discounts to attract price-sensitive buyers who need an extra incentive to purchase."#t1pw (p. 173)
• "Employees need to be proactively encouraged to collect and report competitor information."#t1pw (p. 180)
• "... it is important to keep up on pricing issues because variables that affect price constantly change." #t1pw (p. 183)
• "If a company doesn't have a culture of profit in place, it is missing significant opportunties." #t1pw(p. 184)
• "The best metric of better pricing initiatives is simply measuring if total profits are increasing."#t1pw (p. 195)

The how to increase profits takeaway from The 1% Windfall: One size does not fit all. Different customers require different options and solutions.

 

Note: A review copy of The 1% Windfall by Rafi Mohammed was sent to me by a publicist.

Page numbers listed above may not correspond to the final book. An uncorrected proof was sent to me for review.

There are several spelling errors in the tweets above. These were left in to conform to the origin of the tweets.

Foursquare: Customer Engagement for Business

 

Foursquare has recently made some changes to their website.

The line below is from an individual users settings page.

“Let local businesses see that I've checked-in at their venue [huh?]”

Clicking on [huh?] in that text brings up a dialog with the following.

We allow verified venue owners to see statistics about checkins at their venue. These stats include recent visitors, most frequent visitors and most popular check-in times. You can always opt out if you'd rather not share this data with the venues you visit.

Each venue now includes a way for the owner or manager to claim their business and gain access to analytics for people that check-in. Claiming your business allows you to offer specials to your customers (AKA: guests or fans) for checking in and for being the mayor. The mayor is the person that checked in the most times in a recent time period.

You can find “Foursquare + Your Business” here.

If you own or manage a business with a location that people visit, such as a coffee shop, bar, or barber shop, your guests may be doing social media advertising on your behalf. You owe it to yourself to check out Foursquare.

Startups In The News

In a sign that 2010 really is a new year, several new start-up "incubators" are slated to pop up around Silicon Valley in the next few months.

Incubators typically help nurture small businesses by providing space, services and mentorship to entrepreneurs, often for a fee or an equity stake in their business. Well-known incubators include Y Combinator and Plug and Play Tech Center, with many venture-capital firms also incubating start-ups.

via online.wsj.com

As the economic recovery becomes more apparent, more people will be reporting on startups. Certainly business publications such as the Wall Street Journal and Business Week will feature them prominently in the near future.

It was not too long ago where the Wall Street Journal had a graphic indicating that every quarter about 200,000 new businesses are launched in the United States.

Link to startup graphic

Posted via web from admore's posterous

The Wall Street Journal Reports on Foursquare

Tristan Walker, the head of business development for Foursquare, estimates current Foursquare app users to be around a quarter of a million. He says the company hopes to make money by working with “local mom and pop shops” as well as mid-sized retailers. For instance, he said, Tasti D-Lite recently launched a Loyalty Program on Foursquare, through which customers can earn and redeem points by tweeting or checking in on Foursquare while stopping by the ice cream chain.

via blogs.wsj.com

Interesting article. Gaining the support of small establishments on the ground is hard. Perhaps they will have the mayors and super-users (currently there are three super-user levels) spread the word on how Foursquare can help.

Three forces for local to harness.
Visits - Who When and Where?
Loyalty - How often?
Word-of-Mouth - Is the message being spread? New levels of awareness are critical for sales growth.

Posted via web from admore's posterous

Think Outside The Box: Break Down

 

The phrase, ‘think outside the box’ has become commonplace.

The box represents the imaginary limitations or parameters for a situation. These “Dimensions of Value” are leverage points that create value to the customer.  Think of the box as having three or six sides. Each side is a value point to the consumer.

For any particular product or service there is a standard that represents the current market. As that market gains new entrants, there will be an increase in competition and a decrease in operating margins. An organization is challenged to increase innovation.

Innovation is or may be achieved via moving one of the walls of the box. Consumers change over time. What is optimal for consumers today, is suboptimal for customers tomorrow.

Organizations must challenge themselves with innovation that increases consumer value as well as returns to the firm. This must be done even if it destroys the old business. The organization is better off destroying itself via innovation than to be destroyed by an outside force with no alternatives available.

THE CISCO SUCCESS PLAYBOOK

Below are the four elements to creating success as stated in the Wall Street Journal article: Silicon Valley Survivor

• “Be realistic”
• “Assess your situation”
• “Get ready for the upturn”
• “Get closer to your customers”

For the full details on each, visit the full article on the WSJ website.

Here are three unwritten rules to add to the four above.

• “Watch the stock market.”
• “Always have more cash, not less.”
• “Be aggressive.”

Again, these are from the article linked above. It is one thing to talk about these rules and quite another to have such strong execution on them. Cisco has successfully acquired several billion dollar businesses and not missed a beat in doing so. They have been a nimble M&A machine.

TWITTER FOR BUSINESS: 101 STYLE

Earlier this week at #tweetea, a tweetup event in Royal Oak, MI, we had a discussion about Twitter. The discussion included some thoughts on how so many people sign up and just do not see what all the hoopla is about. A big part of the conversation revolved around there not being a guide on how to use the service. It is not real clear and generally takes a few weeks to get a hang of it. Most new users are not willing to put in such efforts and thereby abandon the service.

What Twitter Did

Twitter recently released Twitter 101 - A Special Guide. The guide is geared for business and included best practices and case studies. This is the kind of progress that will be welcomed by new users.

Extra Credit Reading

The New York Times: Mom-and-Pop Operators Turn to Social Media

Questions

• Do you use Twitter?
• What value do you get or give with it?

A few years back it was new for a business to have a website. Then it was having an email address. The new thing is to have  a Twitter account.

Business Week: Customer Engagement

Earlier today I was listening to a Business Week podcast for the story titled “Where Housing Will Be in 2012.”

One of the things that stuck me was a question that raised concerning the future selling price of a home in New Jersey. Both writer and the editor took a stab at answering the question. [My guess is $475,000]

This question would be a good way to engage listeners and readers. Perhaps Business Week will use a free survey site to do just that. A site such as Survey Monkey or Predictify may work.

Data requested would include the following

• Price in dollars
• Name
• Email

Closest guess gets the winner in some sort of analysis Hall of Fame page on the Business Week website.

Each guess could include space for a 140 character reason for why that price was guessed. Twitter posting may also be included.

Would something like this drive discussion?

The Flow of Information

The cycle of information. Where it starts, where it leads.

This is not always the process but how it sometimes works. Compelling content creates positive chemical reactions. These reactions can be captured. See below how it all played out.

 

1. Email from Smart Brief ---> Leads to article on CNNMoney.com: “Garbage mogul makes millions from trash”

2. Search on Twitter for TerraCycle

http://search.twitter.com/search?q=TerraCycle

BTRfeatures: Come listen to the Innovative Business Model: TerraCycle show by Planet Good Radio on BlogTalkRadio LIVE at http://tobtr.com/s/437950

 

3. Top result from BlogTalkRadio Link leads to…

Planet Good Radio
Show Name: Innovative Business Model: TerraCycle

4. Listen to show…

3.5 Before listening… see an Amazon book link… visit site to see book. Added book to Wish List.

Results/Takeaway:

• Information that is compelling drives decisions and actions.
• BlogTalkRadio gets more mind time
• Amazon gets the sale
• TerraCycle gets a positive reference point in mind
• Tom Szaky gets recognition and searches. [seems like an innovational entrepreneur]

What are your thoughts?

DETROIT STARTUP WEEKEND

IDEAS PUT INTO ACTION

In about four weeks, Startup Weekend will descend on Detroit Michigan. As the state with the highest unemployment rate, Michigan needs a storm of entrepreneurial activity to ignite. Entrepreneurs start with an IDEA then add some secret ingredients. In the process they require specialized knowledge, skills and talents. It is at that point, employees may be added to the business enterprise.

Now more than ever

Now is a great time to start thinking about some ideas that create customers. What does it mean to create customers? Solving consumer needs, wants and desires creates value. The value that is created by a business enterprise is exchanged for money. The more value the firm creates the more potential there is to become an economic force that grows the fortunes of both customers and the the enterprise. This a win-win. In the process, jobs are created and customers are better served. In all of that, the economy grows and expands. 

Are you thinking about your IDEA for Startup Weekend already?

Now is the right time. Bring together your own mastermind group. Brainstorm for ideas that solve customer needs, wants and desires. Keep churning the idea each and every day. Use feedback to adjust the product or service you will bring to market.

Why should I do this today?

Better ideas are more likely to hit the spot where customers find value and where contributors see the idea as viable and a mission they want to participate in. This is like a groundswell in such that in will resonate quickly if the message is focused and grounded in reality. 

A great way to create a focused and grounded idea is to think about it a lot. Everyday is not too often. Have others join you in these conversations. They can see things you can not. They may uncover issues that would stall or become impassable stumbling blocks. 

Tweeetups

If you are interested in exploring some ideas with others, there are few events as powerful as a tweetup. What is a tweetup? A tweetup is a gathering of people that use Twitter.com. You are strongly encouraged to join Twitter as soon as possible if you are interested in Startup Weekend or business in general. It is a powerful and effective way to meet smart people. Many of these folks are knowledge workers. They have the knowledge, skills and talents that are the bridge to success. Meet as many people as you can via tweetups.

What are your thoughts on Startup Weekend or business enterprise?

LIFE IS RELATIONSHIPS

Saw this at the end of a blog post by Steve Yastrow. The full post it is worth reading. You might also consider subscribing to his blog as well. Link > http://yastrow.com/

Differentiating yourself with advertising is usually futile and, at its best, very short-lived.  Differentiating yourself with relationships is lasting.

• How are you differentiating yourself?
• How is your business or employer differentiating?
• How much difference is enough?
• How are you building relationships?

Comments?

BUSINESS BLOGS: THINKING AND ANALYSIS

Management, Marketing and Leadership

Currently there are 188 feeds in Google Reader. The ones listed below are very good to excellent resources. 

Check them out for yourself. They may challenge your thinking. If they do, you will have to sharpen your analysis; in the process your position will either change or become better defended as you find better information.

Carpe Diem

The Big Picture

The Tom Peters Weblog

Blog Maverick

Seth Godin

Guy Kawasaki

...

What business blogs do you read, share and use as a resource?

WSJ: WOMEN LEADERS IN BUSINESS

There is a good conversation going on in the Wall Street Journal about thought leaders in business.

The first article is...
New Breed of Business Gurus Rises
There is an obvious lack of women on this list. The methodology probably has a lot to do with the lack of women on the list.There is another column that looks at why this is. It also looks like there will be lots of comments.

The second article is...
Ayn Rand, Where Are You?
This is definitely worth checking out. My comments are below.

"There are lots of women who are successful thought leaders.

Their ideas, creativity etc are opening new ways to think and succeed.

When I have been to conferences some of the best speakers and presenters have been women.

If you create a list of the top 20 Women [thinkers, analysts, leaders etc, there will be lots of people interested in reading it.

If you are interested, go to Twitter and look for the top 100 people by followers. You will find some extremely talented women.

http://www.twitterholic.com/

A few you will want to check out are Pistachio & missrogue
There are probably about 10 women in the list.

Also recommended is smallbiztrends / Anita Campbell, she is not yet on the list…"

David

Comment by David Damore - May 5, 2008 at 5:29 pm

MICROSOFT DROPS YAHOO BID

Business Week article here.

Wall Street Journal article here.

Where does Microsoft go from here?
If this acquisition was a key part of the strategy how can they walk away?

OPINION
Right now I am guessing that Yahoo was pressing to maximize the price they received. Microsoft has essentially called that bluff. This deal, if it is going to happen will occur early next week.
Yahoo will send feelers back to Microsoft and a deal will happen.

Could be completely wrong on this. The egos involved are too big to let this situation look like a disaster.

What do you think?

WSJ: Coke, Pepsi Bottlers Try New Sizes To Boost Sales

By BETSY MCKAY

May 2, 2008

Hoping to pump up soda sales, several U.S. soft-drink bottlers are testing alternatives to a convenience-store icon: the 20-ounce bottle.

MY THOUGHTS

• Lower prices are better price points for consumers
  
• Smaller package may have better results on buy 2 promotions
• A variety of sizes to meet customer demand is a good thing
• Some consumers do not want 20oz
• 16.9oz was the glass bottle size back when I was a child

What are your thoughts?

ELECTION '08

ISSUES IN OHIO AND FLORIDA

These two states will probably decide the outcome of the presidential election.

Living in Michigan and having family in Ohio has made me aware that Ohio has a weak economy. Saw a story on Google Finance about Home Depot closing some stores in Ohio. It struck me the Ohio economy may be struggling even more than I thought. Link to story is HERE and below.

Problems in Ohio &/or Florida

• Shrinking job base
• High fuel costs
• Slowdown in tourism
• Rapid decline in home prices [condos included]
• Foreclosures occurring at a elevated rate
  

Thursday, May 1, 2008 - 5:27 PM EDT
2 Ohio stores to be shut by Home Depot
Business First of Columbus


What are your thoughts on the election?

Key issues for the fall election?

What problems did I miss for Ohio and Florida?

Other?

WSJ: Mars, Buffett Team Up in Wrigley Bid

Interesting article in the Wall Street Journal.

$22 Billion Deal
Would Reshape
Candy Industry

By MATTHEW KARNITSCHNIG and DENNIS K. BERMAN
April 28, 2008; Page A1

Mars Inc. and Warren Buffett's Berkshire Hathaway Inc. were close to a pact to acquire Wm. Wrigley Jr. Co. for more than $22 billion, according to people familiar with the matter, in a deal that would remake the global confectionary landscape.

What is your take on this?

Will it happen?