Most people in the US can’t cook. So you would think that reaching out to the masses with entry-level cooking instruction would be a smart business move.
In fact, as the Food Network and cookbook publishers have demonstrated over and over again, you’re way better off helping the perfect improve. You’ll also sell a lot more management consulting to well run companies, high end stereos to people with good stereos and yes, church services to the already well behaved.
We begin to close the reservations for my US speaking gigs this week. Every attendee gets 5 free copies of my new hardcover and the ticket price is $50. I’ll be speaking about my new book for about 40 minutes and then taking questions and having a discussion with the audience for up to an hour or so.
The cities: Philly, Tempe, Salt Lake, Silicon Valley, New York and Chicago. The details are right here. I’m trying to be able to offer seats at the door, but it’s logistically difficult, so I’m hoping that if you are planning to come, you won’t hesitate. See you there.
In many auctions, the most irrational person wins.
Here’s the proof: eBay offers a service where you can enter your maximum bid. Say you’re bidding on a signed Derek Jeter baseball bat. You decide that the most you’d ever be willing to pay for this bat, under any circumstances, is $99. Type it in.
The auction may be at only $15, and eBay will automatically bid $16 for you. If someone else outbids you, eBay keeps increasing your bid automatically, but never exceeds your maximum.
A rational purchaser sees this as a no-lose proposition. If no one else bids more than $80, you get it for much less than you were prepared to pay. If someone else is willing to bid $100, you lose, but that’s okay, because you determined ahead of time that it was only worth $99. If it goes for a hundred bucks, no big deal… it’s like seeing a diamond ring for a million dollars. You’d like it but you’re not willing to pay for it.
The price someone in Texas is willing to pay shouldn’t have anything to do with what you think something is worth, should it?
The thing is, very few people who win auctions on eBay use this feature. It’s human nature to want to keep what you’ve got, to want to avoid losing. Even a ten-year-old gets incensed when he discovers he’s been outbid.
That’s why so many auctions are active at the last minute. Auctions don’t work in a rational way.
When you bid $16 for that bat on the first day, you feel terrific. I mean, you just bough a $99 bat for $16.
Of course, you’re only the high bidder for a day or so. Then it’s not your bat anymore! Someone else has your bat. So you bid $4 more. It’s okay, you tell yourself, because, hey, you only spent $4 to get your bat back.
And this keeps going and going until you’ve spent $200.
A friend of mine spent almost a thousand dollars on a piece of furniture worth $20 using this tortured logic. Human beings are quite willing to repeatedly spend small amounts of money to avoid losing something that they think already belongs to them.
Last thought: the only thing worse than losing a big-time auction is winning one. If you win, you feel like a chump because everyone else in the world dropped out before you. Which is why, if you ever sell something big at auction, you need to bend over backwards to pleasantly surprise the purchaser. It’s the only way to overcome auction-buyer’s remorse.
Bonus lesson: If you can sell a trial version of the product or service you offer for a small amount of money, do it. (Not ‘free’, though, cause that’ll ruin it). Once someone tries the trial–assuming they like it–then future purchases are easier to justify, because all they’re doing is paying a bit extra to keep the item from disappearing…
Everything you need to know is right here in this little snippet from a lens I found today:
Dave talks about his experiences facing the Dip: B2Blog: Writer’s Dip: stuck in a cul-de-sac.
Chris sends us a Powerpoint made by his daughter. (Download everywhere.ppt)
Here’s the interview I did with Entrepreneur magazine.
So, the Net is abuzz with news that after years of flirting, Microsoft is serious about buying Yahoo. Most of the pundits are busy talking about strategic fit or Google or overlaps or asset valuation.
The real point, I think, is people.
The best things to ever come out of Yahoo, as far as I’m concerned, have been the work of individuals. Not of some hyperbolic purple and yellow machine, but from people, strong-willed individuals willing to buck the bureaucracy. And all the worst stuff the company has done has come out of committees. If Microsoft buys Yahoo, a huge (huge) number of talented people will be even richer than before and will almost certainly walk away.
What we haven’t figured out how to predict yet is which people will perform breakthroughs, which people are the ones that will change everything. What we do know for sure is that some organizations are more hospitable to that sort of behavior than others. Microsoft has gotten good at developing pockets of this sort of innovation. The challenge of an acquisition is going to be: Can the combined company make it a lot more likely that mavericks actually bring great stuff to market?
“I’m sometimes frustrated by the long stories,” Rupert Murdoch says about the Wall Street Journal.
Marketing, I think, can be divided into two eras.
The first, the biggest, the baddest and the most impressive was the era in which marketers were able to reach the unreachable. Ads could be used to interrupt people who weren’t intending to hear from you. PR could be used to get a story to show up on Oprah or in the paper, reaching people who weren’t seeking you out.
Sure, there were exceptions to this model (the Yellow Pages and the classifieds, for example), but generally speaking, the biggest wins for a marketer happened in this arena.
We’re watching it die.
The latest is the hand-wringing about the loss of the book review sections from major newspapers. Book publicists love these, because it’s a way of putting your book in front of people who weren’t looking for it. Oprah is a superstar because she has the power (the right? the expectation?) of regularly putting new ideas in front of people who weren’t looking for that particular thing.
Super Bowl ads? Another example of spending big money to reach the unreachable. This is almost irresistible to marketers.
Notice the almost.
In the last few years, this model is being replaced. Call it permission if you want, or turning the world into the Yellow Pages. The web is astonishingly bad at reaching the unreachable. Years ago, the home page banner at Yahoo was the hottest property on the web. That’s because lazy marketers could buy it and reach everyone.
Thanks to the Long Tail and to competition and to a billion websites and to busy schedules and selfish consumers, the unreachable are now truly unreachable.
If I want a book review, I’ll go read one. If I want to learn about turntables, I’ll go do that. Mass is still seductive, but mass is now so expensive, marketers are balking at buying it (notice how thin Time Magazine is these days? Nothing compared to Gourmet.)
And yet. And yet marketers still start every meeting and every memo with ideas about how to reach the unreachable. It’s not in our nature to do what actually works: start making products, services and stories that appeal to the reachable. Then do your best to build that group ever larger. Not by yelling at them, but by serving them.
