New Revenue Now: Blog

 

 

February  2016


Increase Revenue With Free Burritos!

 

Chipotle gave me a free burrito yesterday. 
 
Grilled steak, fresh guacamole, grilled bell peppers, and all the other tasty ingredients that make me happy.  I think I’ll go back and pay for one next time.  And the time after that, too. For a healthy eater like me, it was just a wonderful indulgence.
 
Oh yeah, didn’t they have some sort of food contamination crisis???  Well, I certainly didn’t get sick.  And that burrito was really good.
 
Chalk one up to textbook crisis management.
 
After a year of salmonella, E.coli, norovirus, negative press and severe stock market declines, you would think Chipotle would be on its heels.  Think again.
 
On Monday of this week, Chipotle announced they would close all of its 2000 locations to inform its employees of new food safety programs to prevent further outbreaks. What a great way to acknowledge the problem and pivot. Last year’s issue is now a catalyst for positive change by establishing higher standards for in-store food safety, supplier food safety, as well as employee relations with a new sick leave program. Chipotle even live-tweeted its all-hands employee meeting!  Great transparency – particularly for their target audience of Millennials that values transparency.
 
But the best part was how well they understood the critical importance of how to best drive customers back to the stores.  Like it or not, we have all become the “ADD generation.”  We have short memories and are easily distracted. Once we think you have solved a problem, we move on pretty quickly.
 
My millennial children, Marissa and Jason, sent me the free burrito offer:


BRB

We’re closed today to attend a meeting with all the other Chipotle employees. If we messed up your lunch plans, let us make it up to you.  Visit chipotle.com/raincheck


I then got a text number to text RAINCHECK for the free burrito. I love that word – “raincheck.”  It’s the second great pivot in managing this crisis.  Everything is back to normal!   It's just an employee meeting!  As simple as a rain check because we couldn’t serve you that day!  Salmonella??? Solved that problem! Would you like chicken or steak?

In 72 hours, Chipotle has shifted the conversation completely.  Damage control has been replaced by positive press and happy customers.  Yes, there will be a financial hit as a result of all of those free burritos.  But Chipotle is well on their way to restoring customer loyalty, regaining trust, and driving revenue growth.
 
I bet they even get a few new customers too.  When I can't take another kale salad, I know where I am going for lunch!

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.


 

September  2015


Forget Revenue - Just Fire All of Your Workers
and Make a Fortune

 
As regular readers of this blog know, I am obsessed with revenue and the methodologies companies can use to generate more of it in a sustainable and profitable way.  But last week, I was hit over the head with a concept about expenses that knocked me for a loop.
 
It started at a Milken Institute lecture by serial entrepreneur and author Jerry Kaplan.  He spoke about using capital to replace labor – specifically investing in technology to replace certain types of workers.  “Computers aren’t usually designed to replace workers; they typically automate specific tasks, making a given worker more productive. But when an automated system can match the entire range of that worker’s talents, his or her services are no longer needed.”
 
He then referenced the fact that 100 years ago, over 90% of the U.S. labor force was engaged in agriculture.  Today, we produce much more food than then, but agriculture now employs less than 2% of the U.S. labor force. Most of those jobs were replaced by technology that eliminated the need for workers whose range of skillsets could be automated or substituted by technological improvements.  
 
OK, we kind of knew that already.
 
But then, this information bomb hit my computer screen. 
 
Stephen Colbert announced that his second night at The Late Show (September 9) would feature an appearance by Tesla founder Elon Musk and his third night would feature an appearance by Uber founder Travis Kalanick.
 
This is significant I learned, because in July, Uber (Kalanick) offered to buy 500,000 self-driving cars from Tesla (Musk) in 2020 – assuming they could be made.  Last month, Uber announced a partnership with The University of Arizona working on mapping and safety. And last year, Uber poached 40 driverless-car researchers and scientists from Carnegie Mellon.
 
Why is Uber so interested in driverless cars?  Because with driverless cars, Uber eliminates almost all of its labor costs
 
Once again, capital expenditures in technology are being used to replace recurring labor costs and drive ongoing efficiency and effectiveness.
 
Of course, nothing is that simple.  It sure seems that way in a 500-word blog, but in reality it requires you, the CEO, to have the ability to think boldly and broadly about your business.  It requires you to challenge the core assumptions about how your business is run, and take risks about how it should be run in the future. 
 

It demands that you reassess the business you are truly in,
and face a future in which you may need to define it differently. 
To survive.  To grow.  And to prosper.

 
Jim Collins, in the book Good to Great, states that for a company to become great, it is “about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.”
 
The question for you, is do you have the ferocious resolve and stoic determination to boldly challenge those existing core assumptions about your business to become a great company?

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



August  2015


How to Lose $220 Million Very Quickly

 
I have definitely learned to love Amazon Prime.  The tangible benefits – free two day shipping and free TV/movie/music streaming, not to mention free photo storage and a free Kindle lending library – clearly seem worth the low $99 yearly fee.
 
But what happens when customers do not perceive the core value proposition of a company as worth the price or their attention?
 
That may be the case with a new service called Jet.com. 
 
Days after Amazon’s Prime Day this summer, Jet.com released it’s ‘membership club’ price savings model worldwide.  Trying to position themselves as an online version of Costco, they claim their algorithm-based pricing model takes the inefficiency out of pricing so that consumers get lower prices with the ability to “opt-out” of non-necessary costs that have been baked into retail prices.  For example, if you put a jar of peanut butter into your shopping cart, the cost of a jar of jelly decreases in real time to reflect the savings associated with buying a “bundle” of goods.
 
As a consumer, it is clearly it is enticing to see your total bill decrease per item as the number of items in the shopping cart increases.  The question is whether or not consumers will pay a membership fee based on the promise of future cost savings from an algorithm they can’t see or touch - basically in “a black box.”
 
Will consumers trade real dollars for something intangible, like a promise?  Is the value proposition of a promise valuable and real enough? 
 
What happens if Internet consumers are not as price sensitive as Jet seems to think?  What happens if consumers opt to stay with Amazon for the value they add to prime, an excellent customer experience and overall superior customer service?  What if Internet consumers are becoming value conscious and not just price conscious?
 
Definitive answers to these questions will determine if Jet.com’s $220 million in investment to date will quickly become a painful memory or a fortuitous wager.
 
Now, contrast Jet.com to Telegram, which allows users to encrypt messages sent in the Telegram app.  In December 2014, Telegram handled one billion encrypted messages.  Seven months later, in July 2015, Telegram handled over 10 billion encrypted messages proving that secure messaging is a ‘need to have’ service and powerful value proposition, even for the masses.
 
Take a look at your company’s value proposition.  Is it a “nice to have’ that may or may not resonate with customers like Jet.com or a ‘need to have’ that solves a perceived need for secure messaging that has rapidly resonated with billions of people per day?

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



July  2015


The Three Things that Drive Purchases

 
I just spent a disproportionate amount of money to have a snack basket of chips and dips and other munchies delivered with a balloon to my son at his new office to commemorate his first day at work as a college graduate.  All I cared about was that great feeling a parent gets from doing something really cool – and unexpected - for their child.  If I were thinking solely with my wallet, and my logical determination of worth and value, the purchase would have never been made.
 

“Human behavior flows from three main sources:  desire, emotion, and knowledge”  - Plato

 
Why is it that, as business owners, we forget emotion as a primary driver of our value proposition? 
 
Drybar, a salon for blow-dry services, clearly understands the power of emotion. According to Alli Webb, the founder of the company, “Drybar’s success, at the end of the day, is based on how we make women feel.”  And that value proposition – that feeling – is created and reinforced at every juncture of the customer interaction.  It is all about creating “client happiness.”
 

  • No sales pitches for add-on services – just blowouts
  • Chairs are spaced further apart to create a specific ambiance, sacrificing sales per square foot       by having less chairs per store
  • There are iPhone chargers at each station
  • Lighting is designed to enhance the experience
  • Each potential new stylist is tested for “personality fit” as well as styling acumen
  • Bartenders (cashiers) are not only instructed to ask each client about the experience, but are also trained in body language and facial expressions to assess if someone is really not happy. 
  • Everyone in the company is trained to respond to unhappiness – in person or on social media.

 
A blowout for $40 would seem to be either a luxury “nice to have” indulgence that would not occur frequently, or alternatively a commodity that could be easily replicated by cheaper copycat operations.  After all, if the blowout looks good after the service is performed, does any type of “feeling” really matter?
 
Evidently, it does. 
 
When Drybar opened in 2010, in the heart of the recession, it made a bet that while women were cutting back on many hair services to save money, they would still splurge on a blow-out, if it made them feel good as well as hide the need for an expenditure on a cut and color. 
 
·      Emotion – women feel good. 
·      Knowledge – blow-outs hide the need to spend more money on cut and color
·      Desire – Drybar has grown to 42 salons nationwide in five years
 
Feeling good seems to be making all the difference.  How are you benefiting from the power of emotion in your value proposition?
 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.




May  2015
 

Industry Leader to Failure in One Year...
And the Mistake that Caused It 

 

I recently met the CEO of a large, privately held company whose industry had recently seen more than its share of macro-economic difficulties, technological changes, and shifting customer needs and expectations.  When asked how he planned to address those challenges, the CEO emphasized the significant success achieved by him and his father who started the company 65 years ago.  He also pointed to the sleek, new website under development which would showcase all of the operating divisions that had performed so well for the company for all of those years.
 
His response reminded me of the Smith Corona Company.
 
It seemed like everyone who went to college in the late 1970s or early 1980s had a Smith Corona typewriter.  They were as ubiquitous as blue books and beer.  In the mid 1980s, things began to change.  Personal computers, which were capable of performing more sophisticated word processing functions, were beginning to threaten the typewriter.
 
When confronted with this technological change, Smith Corona, which once famously declared “"The pen is mightier than the sword, but the Smith-Premier Typewriter bends them both!", reaffirmed its 100 year commitment to being a typewriter company. 

 
In 1985, the company introduced a new type of typewriter that they called a “personal word processor.”  In 1986, Smith Corona was acquired by a UK take-over specialist, which proceeded to dismantle the company.  Smith Corona ultimately filed for bankruptcy.
 
Contrast Smith Corona with the Xerox Company.  In the 1970s, it seemed as if every office had a Xerox copy machine.  Xerox had to confront a similar technological threat, as PCs and printers began to threaten the their core copier industry.  Xerox rethought their core value proposition, and became a document and information company.  They recognized that what their customers really needed were the documents and information that copiers produced, and not the copier itself.  Five years ago, Xerox again transitioned “from a company focused primarily on document and information management to one that supports critical business processes for enterprises of all sizes.”
 
What was the result of Xerox’s acute understanding of the importance of evolving their core value proposition?  Company revenue in 2014 was nearly $20 billion with equipment sales (including copiers) representing only 15% of that total.
 
Take a long look at your company’s core value proposition in the context of all of the changes in your industry.  Are you more like Smith Corona or more like Xerox?

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.
 




April 2015
 

The Reason Commercial Radio Hasn't Died.  

And It Isn't What You Think!    


 

I admit it.  I really love Spotify.  Where else can you get “stations” like ‘Weekend Hangouts’, “The Happy Hipster’ or “Smart is the New Sexy?”  Curated music that is designed for whatever mood I may be in at the moment.  I can now hear exactly the specific type music I want to hear at any given time.  It has completely taken over the vast majority of my listening experience in the car.  OK, except NPR.

 

Which made me wonder about how commercial radio is shouldering what I thought was its impending painful decline and ultimate path to oblivion.

 

The answer – “Just fine, thank you!” 

How is that possible?????

 

The Radio Advertising Bureau just reported that 2014 revenues were relatively flat with 2013 revenues.  The revenue areas that I expected to decline actually did decline.  Spot radio advertising was off 3% and network advertising was off 4%.

 

Now, here is where it gets interesting.

 

Those declines were offset by a 9% gain in digital advertising and a whopping 16% in event-driven off-air revenue generation.  Surprisingly, non-traditional revenue from live events off the air now account for nearly two billion dollars, more than one out of every ten dollars radio receives overall.

 

Rather than fight the current music listening trends of the public – on-line/digital listening and brand-driven music events – radio has embraced them and monetized them.  The result is significant revenue that has offset the decline in their traditional on-air advertising business model. 

 

It is often said that macro-economic trends are the most difficult to fight.  And that remains true. 

 

But, the unspoken corollary is that macro-economic trends can be the easiest to embrace.  And, actually the most lucrative to embrace. 

 

Of course, that is provided you have a few necessary prerequisites:

 

* A brand that can make the transition. 

* The insight and execution necessary to make the transition legitimate. 

* A strategy that remains true to the brand. 

* And, a value proposition that is consistent with the macro-economic trend.

 

So far, radio has figured out how to make the necessary pivot to remain vibrant and relevant to their customer base in a time of macro-economic transition.  How would your company fare if faced with a similar quandary?

 

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.


 

March 2015


One Way to Outsmart the Competition



Santa Monica has no shortage of coffee shops.  Most interestingly, it also has no shortage of independent coffee shops, likely right across the street or on the same block as a Starbucks or Coffee Bean.  And they are very successful.  Often because they specifically strive to represent what Starbucks is not – by utilizing unique localized décor, custom music mixes and focusing upon specialized coffees (capitalizing upon the trend for “craft” products – craft beers and craft cocktails) with proprietary single cup brewing techniques.

 

A recent posting by Jeremy Gutsche spoke about utilizing this type of conceptual development  – divergent thinking or thinking the opposite  – to identify opportunity.  For example, rather than compete directly with Facebook in 2008, and most likely fail, potential competitors thought of NOT competing with Facebook and succeed by becoming what Facebook was not.

 

The results were groundbreaking:

 

* Facebook was known as a place to ARCHIVE PHOTOS,

* SnapChat became a $4 Billion company by giving users the ability to NOT ARCHIVE PHOTOS


* Facebook was known as a place to easily share EVERYDAY photos 

* Instagram, became a $1 Billion acquisition target by giving people an opportunity to share CUSTOMIZED photos with special effects

 

As the recession engulfed America in 2008, I was focused on a different type of client - a large residential real estate builder - who was in a continual dogfight with his competition over the diminishing supply of money for new residential construction.  No matter what this client tried, he became mired in bidding wars to secure clients through the lowest price of his perceived commoditized services.

 

We decided to utilize divergent thinking.  My client’s business focused upon BUILDING NEW HOMES.  We researched the market, and realized there was a big opportunity in expanding into MAINTAINING OLD HOMES, as well as maintaining and servicing the new homes he just sold. 

 

My client already had extensive expertise in virtually all areas of a home’s construction from plumbing to electricity to appliances.  The client began a program of selling monthly maintenance and service contracts to existing, as well as new, customers covering preventive and repair services for homeowners.  Over time, the results were very strong.  The new service succeeded as:

 

* A significant contributor to overall company revenues

 

* A highly successful new lead generator for the new home construction business

 

* A source for higher margins on new home construction bids because the company was now a well-liked and frequently utilized entity by existing service customers and their referrals.

 

Divergent thinking can produce breakthrough results

in the right circumstances. 

 

Have you put it to work for your company?

 

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.




February 2015
 

How to Make Anyone Fall in Love
With You  
(Or Your Product, Or Your Service) 

 

I had a really fun dinner at a Thai restaurant by the beach with a single female friend pondering the unanswerable question – what exactly makes two people fall in love?  We pontificated and laughed and blurted out unprintable answers spurred on by potent Thai chilies, and left the evening happy but unsuccessful in our quest.

 

Well, I think I may now have an answer.

 

From a source not truly known for its authority on matters of the heart – The New York Times.  In the article, the author tells how over 20 years ago, a psychologist named Arthur Aron, succeeded in making two strangers fall in love in his laboratory.

 

Here’s what happened:

 

Two strangers, a heterosexual man and woman, entered the lab through separate doors and saw each other for the first time.  They sat face to face and gave each other answers to a series of increasingly personal questions.  Then they stared silently into each other’s eyes for four minutes.  Six months later, they got married.  The entire lab was invited to the ceremony.  True story.

 

You need to read these questions.  So, why do they work?

 

Let’s face it.  We all have a timeworn narrative we offer up to strangers and acquaintances about how great we are.  Product and Service companies have that narrative with strangers and acquaintances too – it is called copy on a website or advertising in the media.  Professional service firms are not exempt – they have elevator pitches and whitepapers and PowerPoint decks.

 

But Dr. Aron’s questions make it impossible to rely on that narrative.  His questions make both parties increasingly vulnerable through sustained, escalating, reciprocal and personal self-disclosure.  It is that mutual vulnerability that fosters closeness.  And that closeness leads to love.

 

Who among you does not want your customer to fall in love with your product or service?

 

In 1982, Tylenol desperately wanted their customers to love their product again after seven people died from taking capsules of Extra-Strength Tylenol that had been laced with cyanide.  So, in what has been often cited as one of the best examples of crisis management, CEO James E. Burke started a sustained, escalating, reciprocal and personal process of candid disclosure with his customers – the American people.  He took full responsibility for making Tylenol safe, the company opened thousands of 800 numbers for people to call and interact, and sent over 450,000 telexes (after all, it was 1982) to doctors offices, hospitals and trade groups.  And, that was just the first day.  The rest is history.

 

But you don't have to wait until a crisis happens to get your customers to fall in love with you.

 

It’s 2015.  Social media and the Internet give us the ability to truly engage our customers with interactive dialogue. Yet, so few businesses really use it for this purpose.  

 

Ask your customers questions.  Respond to their answers.  Listen to what they say.  Be candid.  Be real.  Be successful.

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



 

January 2015
 

Three Things You Need
in Your Recipe for More Revenue

 


I gained five pounds in December.  I'm really not happy about it. 

 

To make matters worse, because I tore my MCL skiing, I can’t run until it heals – and that was my usual way of keeping in shape.

 

OK.  Alternate forms of aerobic exercise. Check.  Further restrictions on carbohydrate intake.  Uggghhhh.  Sounds like further restrictions on “taste intake.”

 

Wait!  I just read about a company that makes “real food that tastes like candy.”  Who can resist that????

 

Protein bars, pastas and chips.  The ingredients – lots of protein, low carbs and no added sugars.  

 

The company – Quest Nutrition

 

Their core value proposition – “Healthy food that tastes amazing with zero compromises.” 

 

The founders based the company on the belief that “people eat for enjoyment rather than sustenance.”  So, their goal was to create food that doesn’t compromise on taste or nutrition. What a great concept - healthy food that people actually want to eat because the experience of eating the healthy food is pleasurable.

 

Certainly, as their website attests, their core value proposition is easier said than done.  And, because they stayed true to their mission during their years of product development, and are now delivering their core value proposition to customers, it is clearly working.

 

* GNC named Quest “Protein Bar of the Year” in 2012 and 2013. 

 

* Vitamin Shoppe recognized Quest as the best selling protein bar in the store in 2013

 

* Quest was the #2 fastest growing private company on the INC 5000 in 2014

 

* 2013 Revenues were $82M

 

* Their three year growth rate is 57,347%

 

* Oh, and when did the company start? ... 2010

 

What’s their recipe for success?


* Find out what the customer truly wants

 

* Make that your core value proposition

 

* Deliver it to them…without compromise

 

How is that recipe turning out when you bake it in your company oven?

 

 

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.




November 2014

 

How Your Business Could Be Blindsided
In A Bad Way


A recent blog post, Peak Google, caused a fair amount of debate when it suggested that Google’s dominance of the online advertising market could be eclipsed by another phenomenon – native advertising.  Notice that I didn’t say displaced or pushed aside or loss of market share, which is how we usually think competitors could hurt our businesses.


Eclipsing happens, often in technologies, when behavioral patterns change so that a certain product or service becomes simply less desirable than another, often because the other represents a behavioral improvement or better way of accomplishing something.  Often, companies are so concerned with their direct competition that they do not see an eclipse coming.


Think horse and buggy vs. cars, radio vs. television, typewriters vs. PCs and PCs vs. smartphones/tablets.

 

So how could Google’s dominant search advertising model be eclipsed by native advertising?


Native advertising is often defined as all forms of online advertising that appear within a content stream that the using is viewing.  Examples would be ads within your newsfeed for Facebook, promoted tweets for Twitter or promoted pins on Pinterest.


Brand advertising is the most prevalent form of advertising.  Native advertising, by definition, positions brands in a context that is relevant and meaningful to the user – arguably a more effective experience in promoting the brand.


Why could this eclipse Google?  Brands have a greater consumer connection in the soft and fuzzy world of social media rather than Google’s task oriented search environment.  Consumer behavior in social environments is more brand friendly, so brands may migrate to native advertising social environments from search environments.  Thus, eclipsing Google, but certainly not displacing it.

 

How could the threat of ‘eclipsing’ effect your business?


With the prevalence of mobile technology, GPS, photo, video, 3D printing and other technological improvements transforming even the most mundane businesses in paradigm shifting ways, business owners continue their myopic view of their industries at their peril. 


It’s time for business owners to treat technology with the same lens as they treat their competition. Don’t be blindsided.  Stay current on technology.  Often certain types of applications of technology or technology influenced customer behavioral patterns are considered fringe cases or “outliers.”  Over time, however, these outlying technology applications or behaviors gain acceptance and desirability.  That’s when a company can be in danger of becoming eclipsed.


Think ahead.  Far ahead.  Speculate on how technology could eclipse the need for your core value proposition, or eclipse how you deliver your core value proposition.  Or better yet, speculate on how technology can improve it.   And then make reasoned, proactive decisions to innovate, adjust or transform, as necessary.

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that

focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



October  2014 

One Big Change Whole Foods is Making
to Get You Back 

 

There are three Whole Foods within one mile of where I live.  Yet, I rarely go to any of them.  I used to go to Whole Foods, mostly to buy produce.  But, I tired of spending $20-$40 for a bag of fruit and vegetables.  So, I gradually found retail alternatives for produce that had similar quality at a lower price.  And, I would also pick up other non-perishable items while I was already at that other store.


Well, it looks like I wasn't the only one.


Whole Foods recently announced a new pricing program in five Austin, TX stores where they are lowering prices on approximately 400 perishable items, like produce. It turns out that people actually view perishables pricing as a leading indicator of how much other items in the store cost.  The impression that perishables are highly priced gives the impression that all products in Whole Foods are also highly priced. 


Interestingly, Whole Foods has spent the better part of the last few years actually lowering prices on non-perishable products.  In particular, the 365 label was supposed to demonstrate quality and value.  But consumers didn't notice.  And the “Whole Paycheck” perception still stuck.


In essence, the price of produce gave consumers their prevailing impression of overall pricing at Whole Foods.  And, when non-produce prices were lowered, consumers didn't notice because their leading indicator of pricing throughout Whole Foods did not change.


Every business has leading indicators that customers extrapolate to form an overall impression. 


A recent client, a struggling Midwest software company that developed medical practice management software, focused on their leading indicators and transformed their company  Through much research and analysis, we realized that their customers, who are doctors, viewed the amount of software complaints and questions from their office staff as a leading indicator of the quality of the software.  So, we changed the User Interface to make it easier for office staff to use the software, and emphasized the company’s classic Midwest values of trust and reliability over the usual emphasis on graphics and features. 


The result - sales doubled in the first two months! 


Focusing on the office staff experience as a leading indicator of overall software quality turned the company around.


So, now ask yourself - what are the leading indicators that your customers look for in your company?  And, are you using those leading indicators to build the perception that will position your company for further growth?

 


 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money



September  2014

How to Overcharge and
Have Customers Coming Back for More



The recent heat wave in Los Angeles has prompted me to think not of global warming, but a rather more pedantic subject – ice cream.  In particular Jeni’s Splendid ice cream.
 
I had purchased the “Whiskey and Pecans” flavor at my local Whole Foods after reading about it in Fast Company.  In addition to the incredible taste, what was most remarkable was the price.  $13 a pint.  By the way, a 1.5 quart tub of Dreyers is often on sale for less than $4.  That’s right –Jeni’s is 10x more expensive per ounce – 81 cents to 8 cents for Dreyers.
 
Yet, Jeni’s is on track to sell more than a million pints this year.
 
How is that possible?
 
It’s all about the underlying vision, value proposition and company execution in creating the product.  Jeni Britton Bauer’s vision for her ice cream was completely different from any ice cream that had preceded it.   She believed that ice cream should be more akin to “edible perfume – butterfat melts on contact with your tongue and releases scent into your nose.”
 
As importantly, she executes her vision in a way very consistent with what her target audience (I did buy it at Whole Foods!) would expect of an ultra premium ice cream:
 
·      The ice cream uses “grass-grazed Ohio milk from a family of small farms within 200 miles of our kitchen.”  Why? Cows who eat grass produce more flavorful milk.
·      The chocolate comes from Shawn Askinosie, who engages in “small batch direct trade” with cocoa growers in Tanzania, Ecuador, Honduras and the Phillipines.  And, he shares his profits with the farmers, too.
·      The vanilla comes from “Lulu Sturdy’s Fair-Trade-and Organic-Certified farm in Africa” 
·      The fruit in the fruit flavors come from “Hirsch Fruit Farm, an hour’s drive south of our kitchen, which has been growing apples, pumpkins, and more for 125 years.”
·      My Whiskey and Pecans ice cream included whiskey made from the Columbus, Ohio micro-distillery, Middle West Spirits, which uses only “100% soft red winter wheat grown in Ohio”.
 
After a while, the bullet points do sound like something out of the “J. Peterman Catalogue” from a Seinfeld episode.
 
Nevertheless, Jeni’s is a certified B corporation, which is a certification conferred by the nonprofit B Labs as having metrigorous standards of social and environmental performance, accountability, and transparency. In essence, B Corporations are to business what Fair Trade certification is to coffee.  Jeni’s talks the talk AND walks the walk.
 
Jeni’s prescription for success is:
·       A very unique value proposition
·       Very distinct and precise communication of that value proposition
·       Verified consistency with that value proposition in every aspect of the company’s operations
·      A clear understanding of their target audience
·       A price point that their audience accepts, and allows them to do business on their own terms
 
What is yours?
 

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money



August  2014


How to Make Money Forever


I was in Carmel, California last weekend after an absence of over 25 years, and was struck by how much I liked the same simple pleasures of Carmel’s environment – the sight and sound of the waves crashing against the jagged rocks, or the mist of the nighttime fog hitting my face as I sat by a fire enjoying cocktails on a rooftop bar.
 
Upon my return, I read a front-page article in the LA Times about Disneyland’s It’s a Small World ride.  “It’s a Small World endures the test of time as more rides are ditched for high-tech versions.”  Even though, the ride has long outdated technology and political incorrectness like Arabs on magic carpets and Mexicans with sombreros.  And, a continually repeating theme song that a recent poll ranked the world’s worst “ear worm” (worse than ‘Who Let the Dogs out’). Yet, over 111,000 visitors a week still enjoy the ride making it one of Disneyland’s most popular attractions, even after fifty years.
 
How does it endure? 
 
According to the article, industry experts and visitors agree that the enduring popularity “hinges on its simplicity and sunny message of peace.”  Like the enjoyment of simple sensory experiences in Carmel, our universal longing and desire for peace does not go out of style and cannot be improved with technology. 
 
Business value propositions can also be timeless and universal. 
 
Here’s one example:
 
A national furniture company came to me with a vexing problem.  While some of their customers had displayed almost fanatical loyalty – one woman spent over $200,000 in one month solely on this company’s furniture to furnish her home – most retailers reported that the company’s various products were steady sellers, but nothing extraordinary.  How could they capture this woman’s passion for their products and translate that into a tipping point for sales nationwide?
 
After extensive research into the company’s core value proposition, we realized that both retailers and customers alike said the same thing – when surrounded by the company’s couches, tables, lighting and accessories, on a pure emotional level, they all inexplicably felt something extraordinary – the company’s furniture made them feel good.
 
The company leveraged the power of feeling good by focusing on selling “environments” of hand-selected groupings of furniture and accessories rather than individual pieces.  That way they could recreate the “feel good” effect of being surrounded by the magic of the company’s creative design.  Virtually overnight, retail sales soared from an average of $150 per square foot for products spread across the entire store to over $400 per square foot for the ‘environments’ of furniture.
 
Clearly, “feeling good” is a timeless and universal desire.  In the case of the furniture manufacturer, the only thing they needed to do differently was to convince retailers to alter the selling environment for their products to feature and emphasize their products’ core benefit of feeling good.

Wouldn’t it feel good to have a timeless and universal value proposition for your company?


“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money



June  2014

One Thing That Saved the Music Business


I left the music business in 1999, right around the time that Napster and other peer-to-peer file sharing businesses were giving consumers the ability to pirate recorded music for free. Recording artists soon turned to live performances as a way to make up the lost income.
 
And, the recording artist mistakenly still thought they remained the king.  After all, they were the brand name.  They were the reason people bought concert tickets and they demanded very hefty fees to play.  So, ticket prices rose and rose, until consumers became very selective about which concerts they were going to see.  As a result, many second tier performers canceled tour dates because ticket sales lagged due to the high prices. And, combined with rapidly declining CD sales, the demise of the music business began to rapidly pick up speed.
 
Until the music business discovered one thing – brand.
 
Not the artist’s brand.  But, a different kind of brand.  A brand that was based upon the very thing that music lovers everywhere truly craved during a live performance.  The experience. 
 
Particularly, the experience of a community of thousands during a destination music weekend with friends.  The festival names are now all familiar.  Coachella ($47.3 million, 78,500 people daily, six days), Lollapalooza ($22.5 million, 100,000 people, three days), and Bonnaroo ($30 million, 80,000 people, four days) And in the U.K., the five day Glastonbury Festival draws over 175,000 people per day.
 
By branding the experience, festival promoters created a different value proposition for music lovers.  It was less about the artist.  And all about the experience and the festival.
 
Want proof?  Last year, my daughter bought a $375 ticket to Coachella before she knew any of the musicians scheduled to play.  She wasn’t the only one.  In 2013, tickets to Coachella sold out in 20 minutes.
 
Coachella’s promise is the experience.  With great musicians.  The specific choices of recording artists are entrusted to the promoters.  Which drives down the promoter’s cost for musicians.  And increases the money they can spend on enhancing other aspects of the experience.  That delivers a far richer experience than simply a concert.  So, kids want those tickets even more.
 
Because after all, a brand is a promise and a promise is based on trust.  Year after year, Coachella delivers on that promise, no matter which musicians it invites to play.
 
It took the scourge of piracy and the demise of the music business as we knew it for industry executives to discover the power of leveraging brand as a way to increase revenues and profits.  Perhaps, your company can embark on that journey a lot sooner in its lifecycle.

 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money

 


May  2014

One Thing You Don't Expect to Find
at an Airport  

After a weekend of attempting to keep up with my son and his buddies skiing and boarding through nearly 20,000 vertical feet per day on the mountain at Vail, my physically challenged body was not looking forward to the sturm und drangof the TSA line at Denver airport.
 
In fact, by the time I got to Terminal C to catch my plane, what I really needed was a calm and very comfortable place to relax and unwind.
 
Fortunately, tucked in a corner of Terminal C, I discovered Vino Volo. 
 
In fact, Vino Volo self-describes their space as a “comfortable post-security retreatfor air travelers,combining a cozy wine lounge, restaurant, and boutique wine shop.” 
 
And while their approachable perspective to wine is unique and appealing, it is their uncompromising commitment to the level of customer service required to be considered a “retreat”, which sets them apart.  No wonder they took home six awards at the recent Airport Revenue Conference in February, including Retailer with the Highest Regard for Customer Service and and Food Operator with the Highest Regard for Customer Service.  That last award they have won seven years in a row.
 
Those awards are no accident.  Their CEO is quoted as saying “Exceptional service is the cornerstone of our brand…we are building our business one happy guest at a time.”
 
Clearly, wine, food and merchandise may be how they make money, but living up to the expectations air travelers have of a post-security retreat is why they exist.  As Simon Sinek once said, “people don’t buy what you do, they buy why you do it” (New Revenue Now, July 2012)
 
It is very similar to how Starbucks famously stated they were not just a coffee house but “A third place between home and work” http://www.forbes.com/sites/alicegwalton/2012/05/29/starbucks-hold-on-us-is-bigger-than-coffee-its-psychology/
 
That concept revolutionized how companies could elect to define themselves – not simply by what they sell, but by what purpose they serve to their customers.
 
And if that purpose is something your customer truly needs, and you execute upon that purpose flawlessly, you have a recurring recipe for continued revenue growth.
 
Take a moment and think what your customers would say is the reason why your company exists.  Can’t come up with an answer?  Or worse yet, the answer is not something your customer truly needs?  Perhaps its time to rethink your core value proposition.

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money




April  2014

How the Girl Scouts Used Marijuana
to Sell More Cookies

Last month, I travelled to visit my son at the University of Colorado.  One of the unexpected highlights of the trip included a tour of a recently legalized marijuana store. 
 
It was quite surreal to see clear jars of marijuana openly for sale on a glass retail counter labeled with names like Purple Kush, Chemical Dog and Sweet Deep Grapefruit.  Smiling, knowledgeable and helpful sales people were on hand to explain the finer points and attributes of each strain as if customers were buying fine wines or expensive cheeses.
 
What was more surprising, however, was to hear the story of one very enterprising 13 year old Girl Scout who set up her cookie stand outside a medical marijuana store in San Francisco and sold 117 boxes of cookies in just two hours. 
 
Hmmm.  People who use marijuana tend to get hungry.  Hungry people love Girl Scout cookies.  That’s one smart Girl Scout!
 
In essence, she did two things that we should all do in the course of running our companies:
·      Continually seek out grassroots information relevant, as well as tangential, to our business.  In her case, information that could help her sell more cookies.
·      Deploy lateral (out-of-the-box) thinking to associate these pieces of information with actual business needs to improve the strategies used to increase revenue.  In her case, realizing that marijuana users have a higher desire/need to buy cookies so selling near a marijuana store would have a higher likelihood of greater sales.
 
It reminded me of when I was the head of Walt Disney Records and we noticed that sales of our CDs at Toys R Us where lagging other retailers.  I went into a few Toys R Us retail stores on a business trip, and noticed that much of our product was out of stock.  Product categories, like children’s music, that are driven by impulse purchases, lose significant sales when the product is not on display.
 
I took a trip into the stock room and asked the clerk if he had received any recent shipments from us.  He replied that the shipment came in a few days ago and was in the massive pile of brown boxes in the back, and he was planning to get to them, and stock the shelves, at some point.
 
I performed some lateral thinking, and thought if we changed the color of our shipping boxes from brown to white, our box would stand out and have a higher likelihood of being selected first for restocking.  So, we did.  The result - our out of stocks diminished significantly and CD sales at Toys R Us, as well as other retailers, showed immediate improvement.
 
What are you doing to continually receive grassroots information that is relevant to your business?  Are you giving yourself the benefit of free-associating that information with your business needs to make more money?

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money
 



March  2014

How to Make Money During the Worst Times


 “The 21st century leader sees adversity through the lens of opportunity.”
 
That quote really resonates for me and for so many of my clients.  After all, any leader who can look at adverse circumstances and connect the dots of opportunity within those circumstances can potentially neutralize the adversity and realize revenue.  Why?  Because when the company’s resources are not encumbered by battling adversity, they can be effectively utilized by strategically embracing the opportunity the adversity obscures. 
 
And in the case of macroeconomic adversity like a recession, the company that reaches for the hidden opportunities within those macroeconomic conditions, can soar past the competition that has hunkered down rationing the very resources that should have been deployed to realize revenue.
 
Don’t believe me?  Here’s a true story.  In 2008, at the start of the recession, a national furniture company came to me asking to increase their revenues.  As you may know, furniture, (and RVs for that matter!) are probably two of the least purchased items in a recession. Nevertheless, I agreed to take on the project, provided the company was willing to invest into potentially contrarian strategies during the growing recession.  They agreed.
 
We identified two ways the recession manifested itself at retail – little or no onsite/near-store excess inventory with long lead times for replenishment, and reduced in-store sales personnel.  We consequently developed two strategies that proactively addressed these two adverse retail conditions.  The strategies, which are still being used six years later, gave retailers strong incentives to buy excess reconfigured inventory SKUs that, when merchandised in the way suggested by the manufacturer, offered customers a highly interactive, high-value self-service experience.
 
Consumers responded immediately and enthusiastically.  The result?  Sales for the furniture manufacturer grew from $55 million to over $100 million in the ensuing three years with continued healthy operating margins.  Meanwhile, sales for the rest of the furniture industry as a whole continued in a much different way - with year over year double digit declines during the same period.
 
Take a moment and think about the adverse conditions affecting your company.  What opportunities lurk beneath these adverse conditions.  And most importantly, how can you seize these opportunities and mold them into an action plan to realize more revenue?

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money

 
 



February  2014


How to Increase Revenues 30 Years From Now


Two recent, seemingly unrelated announcements, within ten days of each other, caused me to take notice last week.
 
January 26, Apple celebrated the 30thanniversary of the Mac by taking a full page ad in major newspapers saying that when the Mac was releasedit came with a promise “that the power of technology, taken from the hands of the few and put into the hands of everyone, could change the world.”
 
Ten days later, CVS, the nation’s largest pharmacy chain and 13thlargest company in the world, announced that they will be ending the sale of tobacco products in their stores by October 1, 2014.  The pharmacy chain said selling cancer-causing products was incompatible with its overall mission of improving health.
 

Both announcements underscored the sheer power of a company’s mission statement.

 
Apple, still the most valuable company in the world, had a very clear mission (NRN, July 2012) when they started the company. Without even knowing that iPhones or iPads were in their future, the company's mission (read the italics again!) actually anticipated and encompassed both of those products.   
 
The CVS mission is simple “Our businesses help people on their path to better health.”  That mission now encompasses not only retail pharmacies, but now, also retail medical clinics.  The company now has over 800 MinuteClinics, the most in the U.S., and plans to have over 1500 by 2017.
 
And, with the Affordable Care Act, CVS has a major growth opportunity with MinuteClinics.  Experts have warned that the higher number of insured patients will exacerbate the shortage of primary care physicians.  Not surprisingly, MinuteClinics are poised to pick up the slack.
 
And, because a crucial part of the MinuteClinic expansion strategy involves profitable partnerships with insurers and hospital systems, the presence of tobacco products in CVS is a strike against its credibility as a health care provider.
 
Mission statement to the rescue– providing CVS with a complete, sensible rationale to shareholders for giving up the $2 billion in tobacco sales. Why give up that $2 billion now?  Because the future revenue growth for CVS, is to continue to give their customers "better health", albeit now as a health care provider as well as retailer of products.
 
As for Apple, their mission statement continues to perform.  Their ad goes on to say “Today we create, share and learn in ways that were unimaginable 30 years ago…Imagine what we can accomplish in the next 30 years.”  Using the same mission statement from 30 years ago as their guide!
 
CVS and Apple are great examples of timeless mission statements that work for them year after year.
 
What is your company’s mission statement?  Can you begin to imagine what you will accomplish 30 years from now (and the revenues that will result) using your current mission statement?  If not, it may be time to revisit whether your mission statement is truly allowing your company to reach its potential.

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money

 



November  2013


How the Homeless Can Generate More Revenue


I tend to encounter a lot of homeless people since I work near the beach in Santa Monica. They are a part of the community.  But homeless people share a lot more with my local clients than just geography.
 
Homeless people also struggle with revenue generation.
 
And actually, homeless people struggle with revenue generation for the same reasons as many of my clients – they do not understand how to leverage their core value proposition so that it satisfies the needs of their “customers”.
 
Its difficult to get very motivated to give money to a guy who has a cardboard signed saying “Will work for beer”.  But I did encounter one example of someone who learned to ask for money the right way.  Watch this video.  It is worth your time, and if you are in an office, you can listen without the sound and still get the point.
 
We often give money to charitable causes for a variety of internal reasons.  And those reasons usually start with some sort of emotional connection between us and the beneficiary of our giving.  Non-profits have known for years that simply stating the problem (“Fifty million people will die of hunger this year”) is not as effective as appealing to our heart and compelling us to forge an emotional bond (with a single hungry person).
 
The person who gives, does so, in large part, because it is emotionally gratifying.  We need an emotional connection to give.  Yet, most homeless people fail to connect in an emotional way with their potential customer. 
 
The man in this video eventually understood his “value proposition”, and how to convert that into the emotional bond his “potential customer” needed.  And, with just a change in words on his sign, he forged that bond and reaped the resulting revenue rewards.  His customers needed an emotional bond with him to motivate them to give, and his word change gave it to them.
 
If it were only that easy for businesses!
 
Yet, the principle remains the same:
 
Find out what your customers truly need
Leverage your core value proposition to give it to them
 
Is your business still struggling with revenue generation, despite the uptick in the economy? Try answering the two questions that flow from the principle above.  What do my customers truly need?  Why am I the only company who can truly give it to them?

,

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.

 

October 2013 

Are You A Revenue Snob?

Revenue Snobs make more money – that’s conclusion I drew according to a recently published article “The Science of Snobbery” 
 
There have been many studies published on how so called neighborhood “wine snobs”, when confronted in blind tastings, still often choose very inexpensive wines over very expensive wines.  The author thought it would be interesting to see if the same was true for classical music, another area where greatness is subject to the limitations of perception.
 
The researchers took the actual audition recordings of the top 3 finalists from 10 prestigious international classical music competitions and asked both professional classical musicians and people untrained in classical music to select the winners. One group of each watched a video audition, the second group of each listened to an audio recording of the same audition, and a final group of each watched the video audition with the sound actually turned off so they could not hear the performance.
 
Wouldn’t you know it – the group that watched the silent video picked the ultimate winner of the best classical recording over 50% more often than those who saw the video with sound, and 100% more often than the group that heard the sound only.  And the results were exactly the same for both professionals and those who were never trained in classical music.  How could that be possible?
 
As Malcolm Gladwell made popular in his book Blink, as part of our adaptive unconscious, we often ‘judge a book by its cover’ in a series of quick intuitive judgments.   We size up desirability or quality or want in seconds, but we can rarely articulate the true, real basis of our judgments. 
 
And that is where the learning is for revenue generation.
 
While most who read these studies offer them as a referendum on whether people are truly experts, I look at them more as an analysis on the effectiveness of snobbery.  Snobs look to cues and context for their indication of what to like - an expensive price tag, a well-known label, or an established or storied history. 
 
Similarly, those who watched the classical music video without sound, looked to cues and context for indications of quality - visual signs of relevant characteristics like passion, creativity, and uniqueness.  They never heard the music, ultimately selected on cues and context only, and were right most of the time.
 
What are the cues and context that lead to more purchases and ultimately revenue generation?  Understanding what the end user truly needs, and then consistently presenting just that in everything a company says, does and produces. It’s the company’s core value proposition consistently and repeatedly communicated as the only answer to an end user’s needs.  The end user, who just wants their need fulfilled, uses the company’s cues and context in conjunction with the content of the company’s product or service, and selects the company.
 
A snob understands the importance of cues and context.  A revenue snob understands how to apply cues and context to make their company more money.  Are you a revenue snob?

 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



September 2013


Are You Too Fearful
to Increase Your Revenues?

Here’s a quick two-question quiz that I bet few of you will get right:

Which company developed the first personal computer?
Which company invented the first digital camera?

Believe it or not, Xerox developed the first personal computer, the Alto, way back in 1973.  It actually had Ethernet networking, graphical user interface, icons, bit mapping, scalable type, a mouse, and a laser printer. But, being overly content with their revenue from renting copiers, Xerox never further developed the computer for commercial sale and ultimately ceded the market to the PC and Apple brands we know today.
 
Kodak, who dominated the photography market, also developed the first digital camera in 1975, but didn’t have the courage to accept and advance the impending change from the analog world to the digital one until 1991. By that point, the development curve had passed them by, and ultimately the company filed for bankruptcy in 2012.
 
Prospective clients often tell me that the best way to get new ideas for revenue generation is to get lots of smart people in a room, “brainstorm”, and innovate.  My standard response is that the problem is not with a dearth of innovation; it is with a lack of insight and courage to move forward with the right ideas for development and implementation.
 
There are lots of innovative ideas flying around companies all the time. But, revenue generation is not for the faint-hearted.  It requires courage to overcome the uncertainty endemic to innovative thought and make a change.  It requires conviction to dedicate precious time and resources to a new idea, an unproven idea, or an idea that could alter a company’s future direction.
 
And, unfortunately, too many CEOs lack the courage to say “yes”.
 
One company came up with an interesting solution to reduce this fear, by spreading the risk of potential failure.  Rhode Island based Rite-Solutions has set up an "idea stock market" called Mutual Fun on their internal website where anyone can post an idea and list it as a "stock".   Every employee is also given $10,000 in virtual currency to "invest" in ideas and can volunteer to work on project ideas in which they invest. If an idea garners enough support, the project is approved and everyone who supported it is given a share of the profits from the project. The result - In its first year alone, Mutual Fun accounted for 50 percent of the company's new business growth.  In addition, since the program began in 2005, it has generated more than 50 ideas, 15 of which have been launched — and those ideas now account for 20 percent of the company’s total revenue!
 
Are you too fearful to create new revenue for your company?  Honestly?  Perhaps it is time to take the first step towards giving your company permission to truly evaluate and finally move forward with those great innovative ideas that are consistent with your core value proposition.

 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.

 

August 2013

Is it Bad to Like Some Customers
More than Others?

 

I love my Dad.  Not only is he a wonderful and amazing human being, but he is also a really smart guy.  And, in a very familiar refrain from my teenage days, once again I have to acknowledge that he is right.
 
He responded to my blog last month about the law firm that had grown significantly by taking the time to find out what their customer truly needed and then providing it for them. 
 
My Dad wrote, “The only caveat I have, is find out what your customer truly needs, and decide whether you can MOST PROFITABLY provide it to them. Sometimes, it may be more profitable to follow a different direction.  A niche market does not always maximize profits.”
 
One of my clients is practicing this mantra right now.  They have been in business for decades providing a much-needed service to individual beneficiaries of certain non-profit organizations.  These non-profits have provided the bulk of their revenue and income since their inception.  They truly need my client’s service and have been very loyal. Nevertheless, as a result in governmental funding decreases and the overall economic malaise, the non-profits have not been shy about continually squeezing the margins out of my client’s services. 
 
This margin squeeze precipitated a re-evaluation of my client’s revenue streams.  Fortunately, through additional research and analysis, we uncovered a new niche of customers that needed my client’s services but are not using these non-profits to receive them.  Nevertheless, these customers are harder to locate and contact, require more effort to secure, and may not necessarily retain the same long-term commitment as the non-profits.
 
To increase profitability, we implemented a comprehensive margin analysis and realized that the profit contribution from these new customers, despite all of the obstacles cited above, was significantly higher than from those customers acquired from the non-profits.
 
In addition, the analysis also suggested that certain customers from the non-profits were more profitable than others.  And, by implementing a template of customer evaluation criteria, before only onboarding those customers with passing scores, we would also increase the direct margin contribution to the company from the newly approved non-profit customers.
 
As a result of this recently implemented judicious evaluation methodology and selective engagement process of onboarding these new customers from the non-profits, my client has enjoyed a significant boost to their overall margins.  The addition of the new niche of customers has also augmented the new margin increases.
 
Have you performed an in-depth margin analysis of every line of business in which your firm is engaged?  Often, you may find that as a result, your product, service, distribution or customer mix can be adjusted with significant benefit to your bottom line.


 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.




July 2013

A Revenue Generating Secret - from a Law Firm!

 
Try to guess the most visited law firm web site in the world today.  It’s not Baker McKenzie (#1 in worldwide revenues at $2.3B), or DLA Piper (#2 worldwide), and definitely not LA’s biggest firm, #4 worldwide Latham and Watkins, which didn’t even make the top 10.
 
The answer is Murthy Law, an immigration law firm from Owings Mills, MD with just about $10M in revenues.
 
Who??????  And more importantly, Why??????
 
Sheela Murthy, the firm’s founder recently quoted in a NY Times article, stated that when she was dealing with her own immigration status, she was “struck by my attorney’s lack of sensitivity and how little he cared.”  She decided that her customers deserved better, and even more importantly, wanted and needed better.
 
So, she decided to build a law firm who demonstrated those principles and decided to use her web site as the medium to communicate, and demonstrate, her firm’s priorities.  Her web site’s priority was “not to bring in clients but to help and show we care and know our stuff.”  In other words, she decided to utilize one of the most important recipes for revenue success:
 

“Find out what your customer truly needs and provide it for them”.

 
Her customers needed knowledgeable attorneys who truly cared.  And, to demonstrate those core benefits of interacting with her firm, she determined her web site that would become the most comprehensive source of free information and community interaction about immigration.  As she explained, her customers think, “If they give this much away for free, what must it be like if you pay them?”
 
And, as it turns out, she was right. Focusing on making her customer’s web experience a glimpse into their potential experience with her firm was the best way to demonstrate her firm’s commitment to caring and knowing their stuff. As a result, Murthylaw.com not only attracts eyeballs (165,000 registered members of their online community), but also both business and individual clients – the firm has grown 36% in the last three years. 
 
Often, companies focus more on what products and services they are able provide to their customers and less on understanding the core needs of their customers. And, very importantly whether their products or services truly satisfy their customer’s core needs. 
 
Take an objective look at your customers.  Do you really know what they truly need?  And, if you were to look at your product or service offerings with your customer’s real need in mind, would you make it a priority to rush out and buy what your company has to offer?
 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



June 2013

How to Apply a Make-up Artist’s Wisdom
To Increase Your Revenue

 
I have always admired the simplicity and truth in Charles Revson’s (Revlon) famous fifty-year old quote “in the factory we make cosmetics, and in the drug store we sell hope.” 
 
After all, what women really want is not a one-ounce glass container of Cyclohexasiloxane and Dimethicone, among other ingredients, and not even the specific results of what happens when that make-up is applied to their face.  What they truly want is the result of how that product makes them feel about themselves as well as the projected results of how the product will make others feel about them.
 
However, in the highly competitive, information mined and messaged, consumer products world of 2013, hope is no longer enough.  Consumers are saturated with too much personalized, targeted information to buy the simple promise of a singular benefit, no matter how accurate.
 
They need to understand the benefit in context.  In their personal world.  With personal relevance to them.
 
My client in the beauty products industry understands this concept.  And effectively communicates both benefit and context as the central tenet of her company’s core message.  As a result, the company has experienced massive revenue growth this year.
 
Her company manufactures a product that solves a real problem for women in the application of make-up.  It is a tool that allows women to seamlessly apply make-up in a way that quickly creates a look that appears like a professional applied the make-up.
 
And it should.  Because my client is a professional make-up artist who developed the product to solve real problems she faced in creating the perfect look for her famous music, film and television stars while she was either backstage or on the set.
 
So how does she position her core benefit in context?
 

“Life is fun…feeling beautiful
with confidence”

 
The context:  Everything she does is fun – the packaging, the colors, the messaging, the company culture, the employees, and of course the actual product itself. The entire context of the company’s existence is fun.  And that translates to every touch point a consumer or retailer or online store has with the company.  After all, fun is the aspirational context that her consumers want in their life and she delivers fun in everything she is and everything she does.
 
The benefit:  Having the product developed and actively used by a professional make-up artist to the stars, instills the confidence consumers need to truly feel beautiful, and reap the internal and external rewards of that confidence in their beauty.
 
The result:  The effective combination of context and benefit has lit up her product’s social network and her product’s sales - multi-triple digit percentage revenue growth so far this year!
 
What is your company’s core benefit?  And, as importantly, in what context can your company’s core benefit truly shine?

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



May 2013

How To Make More Money
Without Changing A Thing

 
Acorda Therapeutics just announced that a drug that generated $266 million last year in revenues from helping patients with MS might now be useful for patients who suffered strokes.  And, they are commencing research to see if the same drug can also help patients with cerebral palsy.
 
It kind of reminds me about how Merck realized that their drug for an enlarged male prostrate could also be used by men to reduce or reverse male pattern baldness.  That drug, Propecia, consistently gave the company an additional $400 million in revenues on an annual basis.
 
Same product + new use + new customer = more revenue
 
And, quite a nice way to earn new revenue with a much higher margin, since all of the fixed R&D costs have already been paid!
 
Hollywood knows how to do this, as well.  Think about how movies first come out in theatres, then they are released on DVD, on-demand cable, hotel pay movies, airline viewing, online, Redbox and Netflix,  It is still the same movie, but with a different use pattern by a different customer.
 
A friend of mine once called the process putting old wine in new bottles.
 
And it works not only for products based upon intellectual property, but also for many types of physical products and services.  The key issue to identify is the benefit derived from what is being sold.  And then, figure out how to extend that benefit to new uses by new customers.
 
In the pharma examples, it is all about additional medical benefits for additional conditions resulting from use of the same drug. In Hollywood, it is catering to unique consumer benefits resulting from convenience, time and location in a structured way that has minimal cannibalization of the other platforms.
 
What is the core benefit of your product or service?  Think harder – the core benefit is often not what you have always thought!  Now give serious thought how to deliver that benefit in different ways to new customers.  Not only more revenue, but also much higher margins, may be waiting.
 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.

 

April 2013

How to Make a Lot of Money in a Short Period of Time

 

I watch basketball maybe once or twice per year.  But I couldn’t help getting caught up in the Cinderella story of March Madness, 2013 – Florida Gulf Coast University (FGCU).  For those of you who watch even less than me, #15 FGCU is a virtually new university that graduated its first class of 18 students in 2001.  Yet, it beat #2 ranked powerhouse Georgetown and #7 ranked San Diego State before ultimately losing to Florida last Friday night.
 
The result?  Sales at the campus bookstore went up over 1000% the day after they beat Georgetown.  The following day, after FGCU beat San Diego State, the bookstore was closed, but the online store received over 500 orders when the game ended.  Typically, online orders number about 20-30 per day. National retailers near the Fort Meyers campus, like Target and Dick’s Sporting Goods, placed rush orders on the following Monday to take advantage of the buying frenzy.
 
Clearly the sudden surge in FGCU  popularity created an insatiable demand for FGCU merchandise.  In fact, the vice president and spokeswoman for the university was quoted as saying "We're pretty much selling everything that is not bolted down.” Nevertheless, one can only speculate as to how many much money was left on the table because product was unavailable to be purchased in the frenzy of the moment. 
 
More broadly, there was a temporary market force (FGCU’s improbable wins) that gave rise to opportunistic revenue generation (for everything FGCU) for a very limited time period (until a short time after they lose or until after the NCAA tournament ends).
 
From FGCU, to the home improvement mini-boom on the east coast after Hurricane Sandy, many businesses and industries have experienced “the perfect storm” of temporary market conditions that gave rise to short term or opportunistic revenue generation.  
 
The question is, how can companies best prepare to take advantage of these impulse sales?  Because after the impetus for the impulse purchase ends, it ends fast – I wouldn’t want to be holding a lot of excess FGCU inventory today.  Just take a look at all the bargain bins of Super Bowl clothing in mid-February!
 
When I was in the music business, it was a not-so-well guarded secret that very detailed plans existed for the immediate distribution of CDs and related merchandise for a number of superstars in the case of their sudden or expected deaths.  One singer in particular had an entire section of the warehouse cordoned off for many years with already manufactured product, boxed and ready to go at the appropriate moment.  And, when that singer ultimately died, the market was completely saturated with his product virtually overnight – and his music instantly became the best selling CDs in the entire country, albeit for a limited time, again.
 
Take a moment and dream big.  What perfect storm of opportunity and market forces could come about to create tremendous, but perhaps temporary, demand for your product or service?  Are you prepared to take advantage of the sudden surge in demand?
 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.

 

 
March 2013
 
Are You in the Right Business?

 
I recently read an article claiming that McDonalds was not in the fast food business, but was in the real estate business.  The company buys locations and leases them to franchisees, using fast food as a way of ensuring stable and low-risk rental income. But, for its property model to work people have to keep visiting its franchisees’ restaurants – that’s why the company has a vested interest in ensuring that their fast food concept continues to be relevant.  So, I looked at to the McDonald’s annual report, and yes, over 2/3 of their operating income comes from revenues from franchisees.
 
Well, now I understood why McDonalds was the initial funding source for Redbox.  In 2002, McDonalds placed eleven DVD rental kiosks in the Washington DC metro area, ostensibly as another way to “ensure stable and low risk rental income”.  In essence, they took their core business proposition and looked for other ways to add revenues consistent with that specific business definition.
 
Similarly, a successful regional concert promoter came to me a few years ago with a difficult question.  They wanted to exit the concert promotion business because the risk profile had become too great, but didn’t know what they could do next that capitalized on their success as concert promoters.
 
After extensive research and strategic visioning, we realized that, like McDonalds, they were in a different business than they had been originally contemplated.  Their concerts tended to be full weekend outdoor beach festivals.  They were actually in the business of providing “California lifestyle experiences”, not specifically music experiences.  In fact, most of their sales came from pre-sold tickets that were paid forbefore the actual music artists were all announced – people were more interested in the experience itself than the specific musical act!
 
We repositioned this value proposition into a far more stable revenue model by creating fixed venue, multi-platform “California themed” entertainment centers in markets that were starving for unique entertainment destinations.  The city and investors alike have warmly embraced the first 15,000 square foot facility, opening in Ventura, California in June.
 
Take a moment and think about what business your company is truly in.  Are you leaving revenue on the table by not capitalizing on your core business proposition?
 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.

 

 
February 2013

Looking For Love in All the Right Places
(and Right Times!)

 
It’s almost Valentine’s Day, and I have a lot to say about online dating.  But somewhere in between reading that I must love dogs or the admonition of “NO SERIAL DATERS” (I don’t know what that means, but it sounds somewhat criminal), I must have missed the most important piece of information -- how to time my online subscription to online dating so that I can have the best probability for success.  In other words, when are the most potential dates present on online dating sites?
 
According to match.com, their site experiences a 25-30% increase in enrollment between Christmas Day and Valentine’s Day.  In fact, they reported that their peak hour of enrollment of the year was at 9pm on January 1 with a 55% increase in registrations on January 2.  Why?  Loneliness on Christmas or New Year’s Eve, perhaps.  Or maybe lots of optimism about finding someone in the six weeks leading to Valentine’s Day.
 
So, believe it or not, online dating is affected by seasonality.  Who knew? I began to think about how unrecognized seasonality in other industries might also represent a missed opportunity to maximize company revenues.
 
Of course, some seasonality is obvious.  No one is surprised to find out that bicycle sales peak in summertime or that toy sales peak between Thanksgiving and Christmas. 
 
But, some seasonality may be surprising.  Cigarette sales are the highest in June, July and August and lowest in January and February.  Perhaps, indoor smoking restrictions create fewer places and opportunities to smoke in the cold of winter? Carpet cleaning businesses have the least number of customers in January and February. Maybe one of you can figure that one out!
 
Why is this important?  Because many businesses and industries have seasonal sales patterns that may not be obvious.  And, by not taking advantage of a real seasonal pattern that affects your company, you may be leaving lots of revenue on the table.
 
So, take the time to research your own company sales patterns for any seasonal trends.  Are you taking advantage of those patterns to maximize revenue generation?
 
Now compare your sales patterns to your industry to assess whether you are realizing the full benefits of industry wide sales peaks and valleys.  Your industry information isn’t available?  No problem.  Go to Google Trends, and check on the search frequency and timing of a particular keyword to give you an indication. For example, if you type in the word “bicycle” you will see that every year the highest number of Google searches for “bicycle” occurs in June, July and August, which coincides with that industry’s peak selling season.
 
And for those of you in B2B businesses that think seasonality doesn’t apply to you, think again.  For the last three years, searches for the term “capacitor”, for example, have been 20-25% higher in February/March than December/January.
 
Is your business getting all of the love (and revenue) from its customers as a result of industry wide seasonal patterns?  The first step is taking the time to accurately assess or discover the seasonal pattern as it applies to your company.  The second step is knowing what to do with it.
 

“New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



January 2013


How to Feel Good in 2013

 
I was not surprised to find out that my three personal New Year’s resolutions were also listed in the top ten resolutions of all Americans.  I was surprised to find out, however, that every resolution on that list had the virtually same core net benefit - it would make the individual feel good. 
 
I had never really thought of “feeling good” as a top driver in my life.  How about you?  Whether you or I spend our days engaged in loving relationships and fun activities, pursuing careers and financial success or selflessly giving to others, at the end of the day, the core net benefit actually is some variation of feeling good.  No wonder James Brown’s 1965 hit song “I Feel Good” still resonates nearly fifty years later.
 
The thought of feeling good brought to mind a national furniture company that came to me with a vexing problem.  While some of their customers had displayed almost fanatical loyalty – one woman spent over $200,000 in one month solely on this company’s furniture to furnish her home – most retailers reported that the company’s various products were steady sellers, but nothing extraordinary.  How could they capture this woman’s passion for their products and translate that into a tipping point for sales nationwide?
 
After extensive research into the company’s core value proposition, we realized that the core net benefit from owning the company’s furniture was that it truly made you feel good.  Both retailers and customers alike said the same thing – when they were surrounded by the company’s couches, tables, lighting and accessories, on a pure emotional level, they all inexplicably felt the exact same thing – the company’s furniture made them feel good.
 
The company seized this core value proposition and leveraged the power of feeling good by focusing on selling “environments” of hand-selected groupings of furniture and accessories rather than individual pieces.  That way they could recreate the “feel good” effect of being surrounded by the magic of the company’s creative design.  Virtually overnight, retail sales soared from an average of $150 per square foot for products spread across the entire store to over $400 per square foot for the environments of grouped furniture display.
 
Clearly, “feeling good” is a primary driver in our lives.  And, the ability to create a “feel good” environment in our homes is a primary need that when satisfied effectively can have an immediate and dramatic result in generating revenue.  In the case of the furniture manufacturer, the only thing they needed to do differently was to convince retailers to alter the selling environment for their products in a way that featured and emphasized their products’ core benefit of feeling good.
 
The same principle can be applied to increasing your company’s revenues.
 
Does your company really know the true core benefit that your customers derive from your products or services?  If so, are you really featuring and leveraging that benefit in its most effective way, so that you can maximize the revenues you realize from satisfying that core customer need?

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.


December  2012



Is Your Company Asleep in a Cave? 

 

I recently returned from a ten day travelling and trekking trip in the mountains and deserts of Morocco.  After one particularly challenging trek up a steep gorge on the edge of the Sahara desert, we encountered a nomadic family who welcomed us into their encampment.  They invited us into their black muslin tent that was stretched over some rock outcroppings for sweet mint tea.  We ate a traditional dinner of chicken tagine in their camp and spent much time conversing with the elder of the family about nomadic life.
 
Later that night, I wandered into a cave that had been used to cook dinner and was immediately engulfed into a passionate discussion with the guide and the nomads as to what Morocco needed to do to rise above the status of a third world country. The prescriptions differed wildly, but consistently reflected the pride and passion for Morocco by two types of citizens who come from completely different ways of life.
 
Ultimately, I feel asleep in another cave covered in Moroccan carpets and lit by candles that were tucked into small crevices in the cave wall.
 
It was clearly the highlight of my trip because it gave me an immersive involvement with an indigenous way of life that I was able to experience in a very personal way.  For me, the experience satisfied a personal need to forge a deeper connection to native cultures around the world.
 
The company that guided the trip – Intrepid Travel – has earned my business for life, as they have consistently given me the same immersive indigenous experience during my other trips with them to Borneo and Tibet.
 
Intrepid Travel genuinely
·      knows their audience,
·      understands what they truly need, and
·      consistently gives it to them. 
 
While one typically books specific trips, that is not what Intrepid sells. What they sell are “real life experiences - transcendent moments when you know you're really alive and part of something amazing”.  It’s a value proposition that appeals very specifically to me as well as hundreds of thousands of other travellers from all demographic groups.
 
It’s not for everybody.  But then again, companies that truly understand their core value proposition are never for everybody - but they inspire their core, and secure intense loyalty from their customers.  No wonder Intrepid Travel has grown into a $400 million company in the last twenty years since they were founded.
 
Does your company truly know your audience, and have an intimate understanding of how your product delivers that very personal benefit that often transcends the product itself?  Intense customer loyalty is a gift in a recession, and this holiday season, it could be the best gift you give to your company.    

 

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.

 


November  2012


Does Your Company Think Like a Fraternity? 

 

My son’s fraternity had a huge problem.  The University of Colorado had banned alcohol during rush parties.
 
Fraternities use rush parties to get pledges.  Alcohol makes freshman boys happy.  Happy freshmen are easier to convert into pledges.  More quality pledges mean a stronger, more popular house.  Popular houses get the best girls.  You get the idea.
 
Many houses were too frightened to disrupt the time-honored and alcohol-drenched pledge acquisition formula.  They decided to fight the ban by sneaking alcohol into their rush parties. 
 
My son’s fraternity had a different idea.  They speculated that the attraction of friends could be a more popular lure than the attraction of alcohol.  
 
They launched a huge, concerted pre-rush effort to make friends with incoming freshman, literally going out of their way to meet freshman when they first arrived on campus.  Those freshmen made informal commitments to join the house before rush even started, and then brought in their new friends from the freshman dorms to the “dry” rush parties.    The result – the largest pledge class in the last 20 years.
 
In essence, the fraternity capitalized upon adverse market conditions and used them to their advantage.
 
Zumba Fitness, now the largest dance-fitness company in the world, also refused to let a change in market conditions get in the way of their growth.  Virtually overnight, their revenues from DVDs began to plunge due to the omnipresence of counterfeit copies.  To make matters worse, imposter “Zumba instructors”, with no relation to the company, misrepresented themselves for their own personal gain further dampening company revenues.
 
In addition to protecting their trademark, Zumba also took advantage of the new “opportunities” these two market condition changes presented.  They turned all of their DVDs (and the resulting newly minted counterfeit DVDs) into marketing brochures inviting everyone to go to Zumba.com to see where the closest classes were to get a live fitness experience.  And, in the cease and desist letters sent to the imposter instructors, they presented a compelling invitation to become a real instructor and outlined all the benefits.  
 
Zumba Fitness has experienced a tenfold growth rate in the last three years, with 12 million weekly class participants in 125 countries.
 
What are the current adverse market conditions that your company is attempting to fight head-on?  And how is that working for you?  There may be a more effective way to use those very same adverse conditions to grow your revenues. 


 

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies

to strategically make more money.



 

October 2012

 

Is There a Picasso in Your Basement?

 
Over the summer, a museum in Evanston, Indiana discovered a multi-million dollar piece of glass artwork by Picasso that had been gathering dust in their basement.  It had been in storage for nearly 50 years.
 
It makes one wonder how a museum, with curators who are experts in art, could not have known that a Picasso original was literally under their nose. 
 
Yet, this happens all the time in business.  Sometimes, you have to know not only where to look, but what lens to use when analyzing what you see.
 
Witness the 3M engineers who developed a glue that wouldn’t stick when two pieces of paper were pulled apart and thought they had failed in product development – until, they thought of an entirely different use…Post It Notes.
 
Or my client, an aspiring video game developer, who had yet to publish that multi-million unit seller (or achieve significant outside VC capital), despite some truly ground-breaking ideas and developers who were also at the top of their game.
 
I kept pushing them over and over to tell me what made their games uniquely special, other than their stellar ideas and top-notch team. 
 
“Well, there is this one feature we developed,” they said, “which allows users to get game fatigue less frequently. Our games now utilize infinitely changing music streams that never repeat and that match the mood of any game environment.”
 
Why is this important?  It turns out game developers usually skimp on music composition, and gamers who enter different rooms, or areas of a game, have to suffer through loops of music that repeat as often as every 45 seconds.  They get tired of listening to the same thing over and over again and quickly grow “tired” of playing.  And, on a game where users purchase access on a subscription basis, this severely decreases revenue.
 
I recommended putting game development aside for the moment, and focus on patenting this audio technology and licensing it to the one million game developers and game developing companies. 
 
After all, their audio technology will solve real problems for the video game industry:
 

  • It will reduce game fatigue, thus increasing subscription revenues and generating more positive word of mouth recommendations among gamers

  • It will reduce music composition and royalty payment costs even further

 
The result – this former game developer, now a new “middleware” company, is now in advanced due diligence with a Venture Capital firm for their first round of funding.
 
Are your company’s “hidden assets” also hidden under your nose?  And, most importantly, are you looking at them with the right lens to make sure they are being deployed in a way that will maximize your revenues?
 
 Read more:
http://www.huffingtonpost.com/2012/08/17/indiana-museum-finds-lost_n_1796931.html


 

 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money.
 


September 2012


Are You a Poser?

 
My son left for college last month and just before he left he received a text from a fraternity brother excited to see him.  “I hate that guy”, my son declared, “What a poser!”  A ‘poser’, for those of you without teenagers, is someone who pretends to be someone they are not.  No one respects a poser, not even his own fraternity brother.
 
It turns out, not surprisingly, that companies shouldn’t be posers either – especially if they care about long-term growth.
 
In fact, a company’s ‘street credibility’ is an important part of how that company supports its core value proposition and differentiates itself as it implements its strategy to grow its revenue.  In fact, in certain situations, and in certain industries, street credibility can be the key differentiator that positions a company to dominate its commodity product competitors.
 
One of my clients, a manufacturer of industrial products, faced a vexing problem that stalled its growth to a stop.  Commodity products were flooding the market at a cheaper price.  And to compound the problem, their product was one where it was difficult to gauge its effectiveness as it performed a function on the microbial level that was not easy to measure.
 
After researching the market and the company’s position in the market, we realized that the company’s customers valued the CEO’s stature as a respected microbiologist far more than we originally thought.  In fact, with product effectiveness difficult to measure, the confidence customers gained by knowing that the company’s products were “backed by science” gave them the peace of mind they needed to purchase initially and repeatedly.
 
As a result, we repositioned the company and its products as “backed by science” thus reasserting its value proposition in a way that paved the path back to revenue growth.
 
How does your company assert its street credibility?  How can that street credibility be used more effectively to bring more revenue into the door?


 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money.

 


August 2012

Solving the World’s Problems:  
One Electronic Cigarette at a Time
 
 
I just read that Thompson Reuters expects S&P 500 second-quarter 2012 revenue growth to be only 2% compared with an average of 7% every quarter since 1998.
 
Seconds later, I read how revenues for the electronic cigarette industry have now reached $300M, up 400% in the last four years.
 
Huh????
 
For the uninitiated, including me, electronic cigarettes are composed of three major parts – a rechargeable lithium battery, a cartridge containing the desired flavor, and an atomizer, which turns the liquid flavor contained cartridge into nicotine vapors which are inhaled by smokers.
 
Putting aesthetic considerations aside for the moment, electronic cigarettes do solve real problems for smokers.  They give smokers a smoking sensation by allowing them to inhale a nicotine mist without the carcinogens in tobacco, they don’t smell or cause second-hand cancer in others, and have no butt that creates litter.
 
Solving real problems are a great way to create revenue. And certainly, that has been true for the electronic cigarette industry.
 
Using your company’s core value proposition, your “why”, as the basis for a solution to solve real problems in your industry, is the best way for you to create new revenue for your company.
 
Working with one of my clients, formally a digital marketing firm, we realized their core value was the ability to compel people to act first, and then believe, in the products of their clients, thus causing higher sales.  The difference was that they knew how to use interactive media in a way that caused the type of action that changed belief and ultimately purchase intent.  They are now an extremely successful experiential media firm that develops proprietary digital interactive experiences that cause the type of consumer action that dramatically increases sales.
 
·       Real problem – compelling people to buy products
·       Real “why” – the ability to create actions that increase actual purchases
·       Real solution – proprietary experiential solutions that produce results for big companies
·       Real result – huge increase in their revenues
 
What is the real problem your company could solve?  What is your ‘why’ that will create the solution?  What will you do, right now, to use that problem and your solution to create new revenue for your company?
 
Read more:
 


 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money.


July 2012
 

 The Hot New Apple…Coffee Cup

 
As I walked past the way too crowded Apple store in Santa Monica a few months ago, I was struck yet again by the amazing popularity of Apple products and had a crazy thought.  Actually, a relatively ridiculous thought. 
 
Imagine if Apple announced that they were releasing in a week the most technologically advanced coffee cup ever seen.  But, tomorrow at midnight at the Apple Store in Santa Monica, they would have it for advanced sale for one hour only.  How many people would show up and wait in line?
 
So just for fun, I asked some of my clients to answer that question.  Not one person EVER said less than one thousand.  In fact, some estimated in the tens of thousands.  But why?  The “announcement” never mentions price nor features.  It really only has three salient pieces of information…technologically advanced, coffee cup and Apple – a company that has never manufactured a coffee cup for sale in the past.
 
Simon Sinek, in his recent book on leadership “Start With Why,” posits that Apple’s “WHY,” which includes challenging the status quo as well as empowering the individual, is the reason thousands will line up for a coffee cup – or virtually any other item – from Apple.  People don’t buy what you do, they buy why you do it.  If a customer believes in the “WHY” of a company, they will believe a company can deliver upon that WHY in any area in which the WHY is applicable.
 
Does your company have a “WHY” that gives it the opportunity to grow and expand by leveraging it’s true value proposition into newrevenues?  While Sinek cites examples from large companies like Wal-Mart and Toyota, the principles of WHY apply very effectively to small and mid-sizedcompanies, too.  In fact, one of my clients applied their newfound “WHY” to their business and doubled their revenues in less than three years – all during the recession!
 
You can access Simon Sinek’s TED talk below:
 
 “New Revenue Now” is a monthly blog by Mark Jaffe that
focuses on new thoughts and ideas that can be used by companies
to strategically make more money. 
 




 
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