Archive for the ‘Marketing and Selling’


Pointy end towards enemy

Just 3 months after the bombings of September 11 I was enlisted into the army.  I didn’t join because of the terrorist attacks (my paperwork was lodged months before) but the gravity of the occasion wasn’t lost on me.

When a fresh recruit first lands at Basic Training the camp staff seem to have nothing better to do than make the lives of recruits hell.  Aside from the yelling and abuse there’s also a raft of practical jokes going around every day.  The first time my platoon went to learn rifle shooting I remember all the rifles had little paper tags stuck to them with a message that read “point end towards enemy.” Suffering under the abuse of the instructors, I’m pretty sure the recruits would have to think pretty carefully before deciding who that enemy was.  But the point is this: your most potent weapon always needs to be pointed towards the enemy.

But this story can be related to the workplace.  Internal politics and sniping just isn’t productive; it’s kind of like shooting your own platoon.  Decided what your weapon is and get your team to create a protective harbor and then defend.  And attack when possible.  Of course internal squabbling isn’ the only thing reducing your company’s productivity.  Think about what you’re doing, what you’re selling, who the enemy is.  Most internet companies are selling something, and more often that not they have some competitor.  Sit down and set yourself some goals.  Are we taking chunks out of our competitors armor?  If not, why not?  Come up with a plan and then re-evaluate after a month.

If you have a good product or service there’s really no excuse for not beating your enemy.  Pointy end towards enemy, fire, check, adjust.

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World’s top business cities

There’s always some fierce competition when the annual “Most Livable City” awards are given out.  Nearly all cities in the western world try to claim the top spot.

But what about the best cities in the world for business?  Well, the list is out - and at the top is dreary old London.  Then followed by New York, Tokyo, Singapore, Chicago, Hong Kong, Paris, Frankfurt, Seoul and Amsterdam.

I guess if you weight up the most livable cities and then cross-reference with the best places to do business, you’ll probably end up with the best of both worlds, or cities…

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Customer relationships are more than skin deep

If you break it down to a basic level, we’re in the business of selling things on the internet. It’s not a very poetic mantra and it isn’t really a well-worded mission statement, but it is what it is. Obviously we try very hard to make our customers happy. If our customers are happy they will visit us again, visit us more regularly and maybe even buy more from us. But it’s not all about the money. We strive to have ongoing partner relationships with our customers, and we try to give back as much as we can.

When we officially launch 2Large2Email next month we expect to be able to give our foundation subscribers a pretty respectful “thank you” package. It’s worth it for a long-term relationship. People who are good enough to buy from our Electronic Software Delivery stores (such as ZoneAlarmStore) have the option to go on our about-once-a-month special subscriber offers list which gives away free stuff and discounts each month. Even if these subscribers never give us another dollar, we’re happy to continue sending them the offers as a thank you. But hey, if they decide to buy something else from us then we won’t say no!

Developing an ongoing customer relationship is definitely worthwhile - for the customer and the vendor. It doesn’t have to be expensive but it does have to give the customer a reason to be part of the relationship. Simply receiving bulk emails with crappy offers will soon be considered spam, and the relationship will come to a speedy end.

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The oil crisis and how it effects your customers

The first five months of this year have seen an average price of just over USD$100 per barrel of crude oil. Some of the economist boffins are predicting prices of USD$200 a barrel by 2009. Obviously this kind of upward trend puts some nasty pressure on the pockets of consumers.

If we have a spending budget of 100% and the price of gas goes from 20% to 30% of our total spend, the effect can be calamitous. This monetary pressure has a domino effect on people and organizations who are vying for the consumer dollar, pound and peso. Typically the first goods and services to suffer in a time of financial squeeze are luxury goods and travel. Like the airlines aren’t finding it tough enough, they’re hit with the double whammy - oil prices and a cutback in consumer spending.

But what happens when consumers have made those first two cuts? What’s next? First on the agenda might/should be expenses relating to oil. Public transport patronage increases, sales of 4 cylinder cars increase, large cars are used less often, etc.

**As an aside, we’re big into Vespas around here: we love the style, the sound and the “la dolce vita” lifestyle. They’re cool, and miserly on gas to boot.**

Companies targeting consumers directly should keep in mind that the product and service offering now, more than ever, has to add value to the customers’ life. That doesn’t necessarily mean lowering prices, but it does mean that discretionary spending is down and buying for need is up. There is of course emotional purchasing, but that’s different again. Value adding doesn’t equate to giving things away for free either - consider convenience, efficiency and other non-tangible assets that you can include in your sale that adds value but doesn’t necessarily cost you much.

When we release 2Large2Email (our file sharing web app) next month you’ll see it isn’t just a way of moving files. There’s a whole lot more being offered to the customer and that will make the user experience even better. You can check it out now, but remember it’s not live just yet!

You can still succeed in a tight economy but you have to give your customers a reason to stick with you.

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Pricing tactics - copying successful models

So many people think they need to re-invent the wheel when it comes to marketing. Always with the next big thing, the bang, the schwizzle, the bling, the blam… the yawn. Sure, there are some pretty exciting new ways of doing things but often people put all this time and effort into fantastic new marketing gimmicks only for them to fail because they’re too complicated, or too stupid.

But I stumbled across a new promotion from Australia’s largest ISP and phone company just now, in a business journal. In a bid to increase its share of the broadband pie, Telstra has copied one of its most successful phone promos and transplanted it straight into the mobile broadband realm. Where customers can get a “free” phone handset if they sign up to a cell plan, they can now get a free laptop with a contracted mobile broadband plan. Uhh, it’s pretty simple!

The customer has to win, of course, when these plans are rolled out, otherwise they won’t succeed. But let’s face it, the concept has worked brilliantly for years with phones so why not laptops? It’s something customers are both familiar and comfortable with, and after 36 months they can trade in and get something new.

I hate to say it, but a big ISP has impressed me (albeit with their pragmatism and common-sense).

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The marketing mix - how pricing directly affects your revenue

Everyone knows about, or has at least heard of the “Four P’s” of the marketing mix. Product, promotion, place and price. I find the area of pricing to be particularly interesting as small changes in pricing can lead to massive changes in the way the customer reacts, and ultimately, your bottom line.

People understand the concept of charging money for goods and services, but few people realize how their pricing strategies might affect their revenue and profit. In fact, price is the only element of the marketing mix that directly generates revenues while the rest would be classed as elements that require funding before generating income.

Let’s face it - the typical company is never going to make millions giving things away for free, so you have to charge your customer a price that covers your costs with a little margin for profit. But there’s a whole lot more to it than setting a retail price and waiting for the customer to look, evaluate and buy.

In the marketing mix the concept of price can take into account much more: quoting customers, volume and quantity discounts, pricing for perishable goods, bundling, “two for one” style offers, and whatever else a vendor can think of.

Choosing a base price at which to sell a product or service isn’t as easy as selecting a price from thin air. First, a vendor has to do market research to discover how much the offering is valued at, and what the customers are prepared to pay for the goods. If that price comes back below the cost of goods, then the vendor should postpone any further thoughts of selling the product/service and seriously consider abandoning the venture or value-adding the offer to make it more attractive to the customer. This should, of course, increase the price the theoretical customer might theoretically pay.

There are literally dozens of factors at this point to consider, including the competition’s pricing, price elasticity (demand versus supply) and what the vendor’s expectations are for the product, brand and revenue.

When you’re pricing something remember not to settle for a straight plain-vanilla retail price. There are so many realistic alternatives that can excite a customer and convince them to buy your product or service over the competition. And even better, they may be happy and buy more than one of your product if your pricing elements are just right.

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Triplicate Of Choice - presenting three pricing options to a customer

I’ve been a salesperson pretty much all of my life. At school I would sell confectionery and drinks to the other kids, earning enough money to supplement my pocket money. Through my college years I worked as a salesperson at my local electrical goods retailer. After graduation my first full-time job was as a software sales representative, and I haven’t really stopped selling since.

Over the years I have used and refined a concept called “The Triplicate of Choice” which is a great way to present pricing options to customers so that the cost of the product doesn’t become an objection which might jeopardize the sale. It’s not a gimmick, or a trick but it does lead the customer to make a decision to pick the product that suits them the best. The problem is, I have no way of replicating this model into the online world because it requires some interaction, and I can’t figure out how to transfer that successfully into the online realm. I’ll detail the model below, and keep working on a way to make it applicable for selling things on the internet.

A word of warning: there’s a lot of generalization that occurs here so bear with me. It’s not an exact science, but it works most of the time. For this example we’ll pretend we’re selling watches, and we have three models:

CP-100 which costs $500, CP-200 at $800 and the deluxe CP-350 which is $1000.

The first thing you have to do is figure out what the customer currently has. I’m just going to summarize the questions here, you can figure out how you want to word them in real life

1) “So Mary, what kind of watch do you currently have?” (determine what she has)

2) “And what do you like most about the Rolex that you have?” (if she likes something, remind her that the model you want to sell her has those points too, if applicable)

3) “Anything you don’t like about the Rolex?” (obviously if your model circumvents or has fixed these issues, mention them)

3a) I almost forgot this bit: “And Mary, the watch is for you, so are you going to be the one making the final decision on the model?” (got to make sure you’re not presenting to the wrong person)

And this is where is gets tricky - you have to know your models and pricing well.

4) Have three models to present which will suit Mary. Start with the model with the least features, then present the medium product and finally the deluxe model.

It doesn’t matter which model your potential customer picks here, it is, afterall, their decision. Let’s just say Mary has picked the CP-100. Invariably Mary will ask how much the CP-100 costs. At this point you have to be sharp and present the options correctly. I say something like “ah, well before I can tell you that Mary, I have to ask a few questions.” Typically the customer will play along, because if you’ve involved them well enough they won’t mind the interaction.

5) Now we know the CP-100 is $500 (as above). Here’s how I present the prices:

* “Mary we get a whole lot of different people inquire about our watches. Many people come in and tell me they’re prepared to spend about $600 on a nice new watch.” (note, $600 is 20% more than my target price)

* “Of course there are some fortunate people who come into the store with a little bit more money and are prepared to spend around the $750 mark on a watch.” (the second price should be 50% more than the target price)

* “And then we get people who are on a limited budget and want a rock-bottom price with no extras and they’re prepared to pay about $500 for a watch.” (this is where you quote your target price)

GENERALLY the customer will choose the middle option - 20% over the target price.

The next bit is quite rewarding because the customer is always happy:

6) “Mary, you mentioned that the model you liked best was the CP-100 and that if you decided to buy a watch you would probably fit into the range of spending approximately $600 on a watch, didn’t you? Well, I’m happy to say that the CP-100 is, in fact, only $500.”

So there you go. That’s the triplicate of choice in qualifying a customer for a price. Closing the sale is different story, but you can see how the steps (if practiced) can lead the customer to make their own decision. And when the customer chooses their own product they are more likely to become emotionally attached and be happy with the sale.

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Smart cart: making shopping carts that make customers say “hmmm”

There are thousands of retailers around the world, selling everything from food to electronics, and clothes to bathroom supplies. These companies spend millions each year developing strategies to make the shopping experience better, more effective and ultimately more profitable.

There’s no difference online. If you’re running some kind of service or selling a product you have to remember that everyone who visits your site is a potential customer. Consumers these days have been “trained” to expect high standards, clean store layouts and well presented stock, and of course they expect an efficient purchase process. People carry these expectations online too.

Let’s think about how the transactions are made. The store owner knows that without a method of transaction that is painless, the customer may leave the store and not buy anything. But at the same time the retailer tries hard to look like they’re not trying hard to up-sell, cross-sell and add-on to what the customer is buying. Here I’m going to refer to the lot as up-selling.

There are many ways to up-sell, be it verbal, written or prompted. McDonalds is famous for its “would you like fries with that?” and every gas station you visit will probably have a display of confectionery, music and other bits and pieces right at the register. Another pretty common way to get the customer to spend a little more money is to try a “get three for the price of two” strategy. At the end of the day these strategies encourage the customer to spend a little more than they initially would have. Some up-sells are subtle, others are a little too obvious and blatant.

The shopping cart we have developed (and use on lots of stores) tries to balance the up-sell with the usability for the customer. Our number one goal is to make sure that visitors to our stores enjoy their shopping experience and find the cart process easier to use than the average internet shopping cart. We acknowledged early on that we won’t have a store assistant right there to answer questions, so we knew we had to make the cart straightforward and even intuitive. Nothing annoys us more are those carts that have about seven screens and a hundred different messages before you can make a $6 purchase (nudge, nudge GoDaddy). I would hate to think how many people click “buy” and then leave because they’re either ticked off or simply annoyed with the confusing shopping cart. Let’s face it - you would never find something that difficult in a normal retail outlet.

Internet stores that can subtly up-sell a relevant product that will benefit the customer will find the technique is a terrific way to maximize sales and keep the customer happy. The biggest problem around the world at the moment is that most of the shopping carts that are available can’t adapt to what you need to really give the customer what they want, and deserve. Keep looking though - your customers will appreciate it and your sales will increase (ours did, anyway).

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Why Strong Arm Tactics?

Already people are wondering why we chose the name “Strong Arm Tactics” for our blog. So, I figure we owe an explanation. We’re the little guys. We like to support other little guys, and we’re not exactly huge fans of those massive software companies that roar and beat their chests and drive little companies out of business.

That said, let me tell you a little about our company. Our parent company is called Manaccom, which is a small cap stock listed on the German and Australian stock exchanges. Manaccom has traditionally been a software publisher focused on delivering boxed software to retail outlets. In 2007 Manaccom and another company merged. This other company, Jumbo Corporation, has been in the e-commerce business since before broadband was invented. Currently they do some cool stuff in the online space selling lottery tickets and running a nifty little affiliates program (Jumbo Affiliates) and a cool rewards site (Jumbo Rewards).

Our little division doesn’t actually fit into any of the departments above, but kind of works side-by-side. Our group is nominally called Sellerbyte and we started off with a network of online stores mainly selling software. ZoneAlarmStore is one of our flagship software stores and it incorporates our unique selling point - the shopping cart. Most of our development time has gone into making the shopping cart the easiest to use online payment system around. Go ahead and visit ZoneAlarmStore and go through the motions of buying a software download. Of course you don’t need to actually buy it, just have a look. I’d love your feedback about its ease of use.

So there’s the first part of what Sellerbyte does. The other focus of our business is to build online tools to make the life of small business people easy. Our first product 2Large2Email is billed as the simple way to send large files. No more bounced emails, no more FedEx, no more having to get the tech guys to setup an FTP server (that you can’t use anyway). Just a plain vanilla, even-my-mother-can-use-it way of sending those large files that you really want Mary Jones to have today. It’ll be up and running in July and we’ll be asking for a monthly subscription for people who want to use the product. Although, I should point out that we have a dozen premium accounts to give to people who would like to test it out and answer a few questions about performance and ease of use.

We’ll be releasing other products soon too, all designed to make operating a small business easier, more efficient and sometimes even fun. So stay tuned and drop by every now and again. We’ll be blogging about what’s new on the web, tips about how to run a business efficiently (yep, that’s my background) and cool developer tricks. Nige our Web Chef will comment on the tech stuff, Ben our Web Marketing Guru will write the about-once-a-week article on marketing (when he can drag himself away from his SEOing) and because I really am not a technical person I’ll make observations about business.

Oh yeah, and that brings me back to why we called this space Strong Arm Tactics. It’s basically the antithesis of our business ideology. We’re the little guy working for the little guy, battling against the megatron companies of the world, just trying to eek out our little market niche. Why not help us? :)

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Welcome to Strong Arm Tactics: the occasional blog about the internet, selling, marketing and development.

Welcome to Strong Arm Tactics - the occasional weblog about what’s happening on the internet and everything to do with online marketing, web applications and other interesting little tid-bits.

To start with I want to introduce the three of us who will be contributing to this blog:

Ben, our Web Marketing Guru (yes, that’s his actual job description) will be writing posts to do with Search Engine Marketing and Optimization. Ben knows everything about the world of Google and their AdWords. Ben looks after our network of online stores and manages our cool (and we think unique) shopping cart system. But more of that later…

Nige is our chief Web Chef. In other words he does lots of cool stuff designing our sites, implementing the latest and greatest techniques and wonders and generally keeps our sites operating at optimum efficiency and improving them as required. Nige will write about coding and development trends that he spots, and anything else that he thinks is worthy of mention.

And I’m James. I’ll be writing about marketing, trends, entrepreneurialism, selling, customer service, online gossip and all the rest. The next few years is going to be quite exciting in terms of developments in the web world and we’ll ride that massive pipeline wave into the great unknown, pointing out some interesting things along the way.

Thanks for reading - I look forward to hearing from you.

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