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When does having the lowest price make sense?

Not very often.

Yesterday, I was talking about the folly of competing primarily (or mostly) on price and how silly it is because of the lack of loyalty it creates among your customers.

However, there are a few times where the low price makes sense.

Management Media Politics

Oil, water and the pharmacy

Yesterday, I pulled a quote out of a classic pharmacy / contraceptive / faith story in the Great Falls Tribune because a quote about using morals to make business decisions seemed odd to me.

There’s another hair in this story’s soup: The rights of the businesses to do business as the owners see fit – within the law.

The owners of the pharmacy say they stopped the sale of oral contraceptives because their use is not consistent with their faith.

I don’t think they need a reason, nor do they need to explain it to anyone.

Corporate America Customer service Good Examples Management

Someone in Wyoming

Someone in Wyoming showed up on my caller ID this afternoon. Normally, I would have let it go to voice mail, but there are a few people down there whose numbers I don’t have memorized, so I picked it up and got a pleasant surprise.

It was Jennifer from Bresnan, the manager of their customer service quality management team for this area. Apparently Bresnan has someone (probably something, but that’s cool with me) scanning blogs for their various business/brand names.


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Business and Morals: Oil and water?

In an article in the June 3, 2007 Great Falls Tribune, an article discusses a pharmacy whose new owners have decided to stop selling birth control pills because they feel that selling oral contraceptives (ie: “the pill”) conflicts with their Catholic faith.

That article quotes a Great Falls businessman Jerry Weissman, as follows:

Weissman, who described himself as a pro-choice Republican, also said he thinks Snyder’s new owners are taking a considerable business risk, especially with two new Walgreens pharmacies set to open in the near future, “by putting obstacles in their road to serving customers by making business decisions for moral reasons.”

That quote jumped off the page at me.

Aren’t many business decisions moral ones?

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Customer service and the cable guy

Have you ever called a big company’s customer support line when “higher than anticipated call volumes” weren’t occurring?

That’s what I thought. Whoever anticipates call volumes sure seems to be off the mark a lot, don’t they? Do they use sophisticated trend analysis to anticipate call volumes?

Seriously, I wonder how often – or IF – they measure call volumes and adjust staffing levels. Perhaps a topic for some other time.

Yesterday, I called my cable company (Bresnan) about some signal problems and had an enlightening conversation with “Chipper”, who was very courteous and professional. He asked all the right questions, in the right order and did pretty much everything I expected – except…

Competition Entrepreneurs Management Media

Welcome Beacon readers….Why ANOTHER newspaper?

Later today, when the people of the Flathead open their mailboxes, the inaugural weekly print edition of the Flathead Beacon will be waiting for them.

I suspect that lots of people will wonder…why another newspaper? After all, we already have the Daily Interlake plus weekly community papers like the Whitefish Pilot, Bigfork Eagle and Hungry Horse News.

I think it’s kind of a silly question, but I’ve spent a LOT of time thinking about it. Not everyone has had that chance, so read along and see if you agree.

Management Marketing

“Anything you have to do often, you shouldn’t have to do at all”

Bruce Barrington* allegedly said that was his philosophy regarding computer programming, but I see it applying to a lot of other things outside of the geek world. Or at least it should.

A few examples…

Why do I have to go to the grocery store to haul home a 37 lb bag of dog food? Can’t they look at their database, see how often I buy it and offer to deliver it a couple days before I typically buy?

How about computer paper? Staples surely has a clue how often I buy a box of 10 reams and which paper I buy. They also know how often I buy toner and imaging units for the printers here in the office. Despite that, no one contacts me to setup a subscription delivery program. They already deliver, so they already have trucks roaming around. Why not make the trips more profitable?

Coffee? Good coffee, that is. And any other premium food product that won’t spoil.

Dry cleaning? They know how often I drop by, on average. If I miss a week, why don’t they offer to pick it up, or at least call and make sure they havent managed to goof up my clothes.

Oil changes? When is someone finally going to remind me that I’m overdue and just haven’t noticed? Or just offer to pick up my car at the office, change the oil and bring it back?

Water softener salt? Culligan does offer a delivery service (they even “install” the salt), but they are alone in that business. Some drinking water services do this as well.  Why just them?

Animal feeds? When I go to the local feed store to get softener salt (ours isnt the standard sodium-based stuff), there are any number of large, bulky or heavy items that are clearly expendable on a regular basis. No delivery or “subscription” service.

Why didn’t my florist contact me and ask what I wanted to send for Mother’s Day? They know I’ve sent flowers before. Make it easy for me. Call me, send me a postcard, fax me or email me and give me an easy way to start a subscription, or at least, say “Last year, you sent your mom flowers. What arrangement did you have in mind for this year?”

The marketing and management angles are obvious. Predictable cash flow, an easy way to exclude other businesses who are too lazy to deliver/ship, flatten cyclical sales dips, shrink purchase frequencies that lengthen as we forget to change oil, get salt, etc.

* Bruce Barrington -Barrington is the founder of Clarion Software Corporation. In 1992, Clarion was merged with Jensen & Partners, International (JPI) to form TopSpeed Corporation, a leading provider of database software development tools and services. In 1974, Mr. Barrington co-founded Huff, Barrington, Owens & Company (HBOC), a leading provider of enterprise-wide healthcare information systems, which merged with McKesson Corporation in 1999.

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More about testing your business

In April 29’s Boston Globe, you might have seen a story discussing Robert Cialdini’s report in May’s Psychology Science.

You do read Psychology Science, right? Ok, maybe that’s a stretch, but I’ll bet you read the Science Daily website. After all, there’s a lot more gold there for the entrepreneur than you might imagine. Don’t read Science Daily? Well, surely you’ve read Cialdini’s classic book “Influence”?  If all those answers were “No”, then start with the book and you’ll see what I mean.

Look, I strongly suggest that you add psychology, at least some regular reading about it, to your arsenal.

Cialdini’s report spoke of the value of using shame in marketing, even in materials that aren’t designed to sell something. Items simply attempting to evoke a behavior – such as asking hotel guests to reuse their towels in order to conserve water and power, or when asking folks to cut down their use of electricity in the summer wherever possible.

Shame, such as “Join your fellow guests in helpingâ?¦the majority of our guests use their towels more than once.” That extra sentence at the end produced better results. Testing.

You may not have realized that psychologists are testers, just like you should be. When they try to figure out why people do what they do, they study and record behavior. IE: Testing. They insist on proper sample sizes, because they want to be sure that the results they get are actually meaningful.

You need to be just as sure when measuring results in your business. In your case, when observing behavior with your product, service, store layout, etc  – your sample sizes can be a good bit smaller than what psychologists use.

As I noted earlier, the education you get about your design will probably surprise you. Hopefully, it’ll be a pleasant surprise for the rest of your clients sometime in the future.

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“Animal” testing is a good thing

People are animals too:)

On Monday Apr 30, USA Today’s cover story was about a family who agreed to be videotaped and studied by Microsoft staffers in order to see how people used Microsoft’s soon-to-be released Vista (now available, of course), what ticked them off about it, what they liked, and so on.

Read the article to see how hard Microsoft is working to try and make their software easier to use, and quite frankly, better.

Why? If you are in the software business, there’s nothing more educational than watching your clients try to use your software. Sure, being on the tech support line is a close second, but the sheer agony of vicariously trying to get the user to click that button that to you is oh so obvious is well….flippin’ painful.

BUT it is seriously powerful, and that power means several very important things:

  • More, easier sales. An app that people can just sit down in front of and start using without help is an app that’s easier to sell. When someone’s first experience is “DAMMIT, how do you use this thing?!?!?!”, getting from there to a purchase can be tough, don’t you imagine?
  • Less tech support. Your app is easier to use. More intuitive.
  • BETTER tech support. Better questions because the painfully obvious ones (to you) that aren’t so painfully obvious to everyone else have already been taken care of. Better support because there’s less of the stuff caused by less than ideal design decisions that were discovered during your testing.
  • Fewer releases. Because you catch the silly stuff early in the game, and fewer people got to see it, there’s just not much about this that can be considered a negative whether you ask your end users, your support staff or the people in fulfillment.

This past weekend, Sherman Hu told a similar story about his WordPress tutorial videos. He said his focus when making the videos was to enable his father in law to create a blog. He recognized that the average person isn’t a megageek and needs some baseline help in getting started. That’s what the tutorials are all about. He includes a few free videos and if you want to learn more after he gets you started, you can subscribe to the paid portion of his WordPress tutorial video site.

Your audience might not be the same as Sherman’s, but the technique is just as powerful.

Human behavior is predictable if you’re a psychologist. Sort of. Even if you know what you think you know, testing by watching a user will show you facts, not guesses.

Testing with “real live people” isn’t just for software people. I’m sure you are aware that big consumer product corporations do this sort of testing on everything from steak knives to minivans.

Why wouldn’t you?

Back in early March, a friend of mine tested a brand new presentation about a pretty geeky (but non-computer related) topic in front of a group of people who weren’t customers, and weren’t technical people – at least not in his arena. The result? He found that he needed to turn down the techno-speak even more than he expected in order to “keep” the audience, otherwise he risked not only losing them, but his credibility as well.

Test your website. Test your forms and other paperwork. Test the arrangement of products in your store. Until you do, you just don’t know how good or bad your stuff is, nor how much better it can get or how much money you’re losing by having less than optimal design.

TEST as much as you can, with real live “animals”. People, that is.

Entrepreneurs Management Marketing

Where are the CEOs?

Even the business journals have noticed the retail impact of the predictable movement to upscale, natural pet food.

Yet the CEOs of the companies that make it STILL haven’t come out of their myopia and managed to hit national TV, Oprah, etc.

I really hope you aren’t making the same mistake.

I can think of several other industries (which include lots of small businesses) that are facing similar, substantial challenges, some that could be more serious than the pet food thing.

Where are their CEOs?

For that matter, where are YOU?

Once again, here’s a gift: If the CEO of Joe’s Natural Dog Munchems isn’t smart enough to send Oprah a 500lb bag of dog food and a small bag for every audience member, are YOU?

Look at what Rock Creek Coffee’s master coffee roaster Joel Gargaro did last weekend. That’s a start. Have some brass and step out there. You’ve got nothing to lose.