PostcardPerfect.com/blog

I discovered some great marketing while helping a friend move last weekend.

I’m not talking about fancy advertising or a slick viral campaign. Nope, this was just good old “selling the right thing in the right place at the the right time.”

I call it the U-Haul Mini-bar.

At the back of the truck we rented there was a dolly (or hand truck, depending on where you are from) and a package of furniture pads. Both were strapped securely to the wall.

Each one was covered with a sales pitch and price information.

Finally, there were green plastic ties that had to be snapped in order to access the items.

If the ties were broken, you get charged. It’s as simple as that. Just take what you need and they’d add it to your bill.

The hand truck was $7 and the furniture pads were $5. I think both prices were pretty reasonable (especially compared to a $6 bottle of water found in a traditional mini-bar). I’d love to see data showing how often each one is used.

Overall, I love this upsell tactic because it’s a really simple, yet very effective, way to solve a customer’s problem. You may have snubbed the idea of moving pads while renting the truck, but after hearing your spouse tell you for the 12th time not to scratch the furniture - they may start to look like a good idea.

Brilliant.

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Tony at Zappos twittered last night about seeing one of those crane games that usually retrieve stuffed animals and candy. This one, however, allowed you to catch live lobsters. According to one sign: You catch ‘em, we cook ‘em, and you eat ‘em.

I love unique product ideas, and I’m pretty impressed by this twist on a tired classic. Apparently it does the job, too. According to Tony:

“Lobster game machine at bar is brilliant. Watched people spend $20 in past hour trying to catch a live lobster. “

A little web research brought me to the the site of Lobster Zone, Inc. The company claims to have over 300 such games placed around the US and has been around for roughly 10 years.

The “press section” of the site has an interesting article written back in ‘98. It says that many of the machines (placed primarily in seafood restaurants at the time) were making over $1000 a week. It also estimated that it took a patron 18 tries with the crane before they mastered it.

The price was only $2 a try back then, and after 10 years -it still hasn’t budged. So there, quit your complaining about inflation.

Here’s a YouTube video of the crane in action: Lobster Game

I’m currently reading Predictably Irrational: The Hidden Forces That Shape Our Decision by Dan Ariely. Essentially, it looks at common decisions people make that really aren’t rational. I’m about 3/4th of the way, and so far it’s held my attention pretty well.

One of my favorite examples notes that people will drive across town to save $7 on a $25 item. However, given the opportunity to save $7 on a $450 item, they won’t bother. It’s so true, and yet irrational. Saving $7 is saving $7 regardless of the item’s price.

Here’s another one:
Imagine you are walking past someone trying to change a flat tire. How would you you react if they asked for help? How would you act if they offered to pay you $1 to help? If you’re like most people, you would help for free but pass when you were offered low compensation. Is that rational?

If you liked Freakonomics you should check this out. If you never read Freakonomics, but were intrigued by these examples - I’d recommend picking up both books.

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I’m pleased to announce that individual card ordering is now available at PostcardPerfect.com. It took longer than expected, but we’re finally live. Yay!

The order process is more or less the same as always:

1) Upload a picture.
2) Type a picture.
3) Tell us where to send it.

Then pay up, and we print and mail your cards for you. Pretty easy.

How much? Thanks for asking. We call it the Postcard Double Deal™ (no, it’s not really trademarked) and it means you get to send two cards for only $3. Each of the two cards can be unique - complete with a different picture, message, and recipient.

For the visual learners out there, it looks something like this:

Before I really start promoting it, I’d like to get some feedback. So…I’m offering to let you give it a whirl on me. Just follow the link at the bottom and go though the process to send your cards. When checking out, use discount code “blog” and your purchase will be free.

Update: This promotion has ended. Thanks to everyone that tried it and provide feedback. For everyone else, it’s only $3 - go make somebody’s day.

Know someone else that may want to try it for free - go ahead and share the code. Three notes though:

1) I may e-mail you afterward to see how it went.
2) The code expires Thursday night (5/15) at 7:00CST.
3) If you’ve never used Google Checkout - you’ll have to sign up.

Fair enough? OK, enjoy.

PS. If you find any problems during the order process, please let me know. David at postcardperfect dot com.

I broke out the clubs and headed to the local golf course a couple days ago. The prices on their sign read as follows:

Resident: $14
Non-resident: $17

I live in the same town as the course so I should pay $14, right? Well, not necessarily. You see, in order to get the resident price – I had to prove I was a resident. Fair enough. Except…

To prove I was a resident, I had to BUY an $8 resident card (good for one year). Know how I proved I was eligible to buy a resident card? I didn’t. I just forked over the cash – no questions asked. Apparently you don’t argue with Lincoln, Washington, Washington, and Washington.

Regardless, now I have to carry this dumb card in my wallet so that when I play golf I can pull it out and show that I’m a resident. Couldn’t my driver’s license serve the same purpose?

The whole thing seems silly. I think it’s the name resident card that annoys me most. I’d resent it less if they called it a discount or loyalty card instead. As is though, it’s just another fee [not so] cleverly disguised as something I don’t really need.

There are a lot of companies that make good money on extra fees. Some hotels charge a $1 per night local phone access charge. It doesn’t matter if you use the phone or not – you have to pay that dollar (which coincidently wasn’t included in the room rate you booked).

Stuff like this is trivial, but frustrating nevertheless. It makes me wonder if the ill-will generated is worth the extra revenue. Considering the money spent building brands, you’d think the answer would be no. I suppose it depends on the circumstance though.

Poll Question: What’s the most ridiculous fee you’ve ever been charged? Did it change your perception of the company?

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Skybus, a four year old “you’ll pay extra for anything remotely close to a frill” airline, shut down unexpectedly (at least to ticket holders) last week.

Their business model was fairly straight forward:

1) Fill the Seats With Really Low Fares
They offered the first 10 seats on every flight for only $5 (I think; I’m shooting from memory because their site has been taken down), and very low prices from there.

2) Keep Costs Down
They used the cheapest airports they could find. “Chicago”, for example, was actually a third tier airport in Indiana (which, for the geographically challenged - is the next state over). Boarding was done from the runway, and I believe the only way you could book a trip was though their website.

3) Exploit Extra Revenue Sources
Nothing but the seat was included with the ticket price. They sold food & drinks, the ability to bring baggage, and rumor has it - seatbelts (unconfirmed). Additionally, both the interior and exterior of planes were sold as billboards to advertisers.

So why did they fold? Here’s the official statement from their website:

Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment. These two issues proved to be insurmountable for a new carrier.

Why this makes sense on the surface:
As any gas consuming American can attest, prices are up. Skybus’s policy of using some of their tickets as a loss leader had to be hurting them. They couldn’t very well jack up the price for peanuts to make up the difference.

The “slow economic environment” (SEE from here on out) means that leisure travelers would probably be taking less flights. And, since they didn’t have much of a following for business travel, this did directly effect their core customer base.

Why, when you think about it, it’s kind of a cop-out:
Jet fuel is up…but it’s up for everyone. The other carriers have raised prices, so Skybus should have been able to do the same while maintaining it’s lowest fare position. If a commodity issue affects a whole industry, it’s not a good excuse as to why others are winning the competitive struggle.

The SEE means people have less money to spend on travel. Fair enough, but as the discount carrier - shouldn’t have this worked to their advantage? Meaning, even though less people may be flying, the ones that are will be more likely to shop for the lowest price. You’d think that they would actually be worse off in an FEE (the F is for fast…or fantastic - take your pick).

The Real Reason:
I considered flying Skybus in February and was pretty unimpressed. The fact is, once I considered all the extra costs and inconveniences - it just wasn’t worth it. And that, I believe, is why they ended up in the big terminal in the sky. SEE’s had little to do with it. I think other discount carriers offer low enough prices that Skybus couldn’t undercut them enough to make flying them worth the inconvenience.

Agree? Disagree?

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The customer is always right…unless the customer is a 5 foot tall 3 year old.

I took this a few years ago at a Chinese buffet. It’s a good reminder that hand written signs look tacky, proofreading is a good thing, and sometimes you should just let a few people take advantage of you to avoid seeming petty to everyone else.

Bill Clinton has charged over $350,000 for some of his speaking arrangements. Know why? Because if you want to hire a former leader of the free world to speak at your event, you only have two options (as far as I know, Carter is not for hire). Neither of the options need the money all that much either, so they can be choosy.

This post is about choice. It’s the secret ingredient to a successful negotiation. The less you need the deal, the better your position is. It’s that simple.

If I’m stranded 1000 miles from home and there’s only one tow company in the area - I can forget about negotiating. In fact, that company can pretty much charge me whatever they want. I don’t really have any other options.

Contrast that with buying a car. There are lots dealerships selling the same vehicle, so I could easily take my business elsewhere. I don’t need to buy it from any specific dealer. I can walk away from the sales office and be just fine. That choice greatly improves my position.

So here’s Negotiation 101: Use choice to your advantage.

If you’re going to buy an appliance, check a few stores. Let ‘em know that you are shopping around. Many stores will lower their price. In fact, if they won’t - leave and find one that will. They need your business more than you need their refrigerator (assuming you have other stores you can visit).

Also, recognize that limited choice is the best way to screw over your negotiating position. If you really need the business and a customer low balls you on price - you may have to take it. If you fall in love with a house before the negotiations - you may pay too much (in this case, there’s not actually a shortage of housing options but you have limited your own choices).

This is why many employees don’t ask for raises. Secretly they think that they need the job more than the company needs them. They don’t have anything else lined up and are afraid to risk losing what they have.

Remember, choice gives you the power to negotiate. Have options, and don’t be shy about letting the other party know it. The more they realize that you don’t need them - the more they will be willing to improve the offer.

Thanks to inflation, your costs of doing business will increase over time. Your suppliers will have no problem periodically upwardly adjusting their prices. Sooner or later, you are going to have to make some adjustments of your own.

As I wrote in the last post, you can stay afloat by either raising prices or decreasing the amount offered for the price. Neither option is going to thrill your customers, but I think that with careful consideration you can get away without annoying them too much.

Of course, I don’t have too much experience with the issue. And, since every business is different, my experience probably doesn’t match your (future) situation . So, why am I wasting your time with this post?

I think logically there are some questions you should ask before doing anything. They are basic, but help you to identify what your pricing means to your business and how various parties will react when you change the arrangement.

Here’s five of them in no particular order:
1) How will this change impact my marketing position?
2) How will my customers react to the change?
3) What have my competitors done? Will they react to my change?
4) What is the most appropriate timing for a change?
5) Are there any contracts or agreements that limit my options?

Again, I digress to blogging about my favorite fast food restaurant.

Wendy’s has a problem. It’s their value menu (officially called the Super Value Menu). See, when the SVM was introduced in 1989, everything on it was $.99. It worked great for a while because it’s a nice “under a buck” number and the products on it could be profitably sold for that price.

<inflation enters stage left>

Over the years though, prices continued to climb and the margins on the SVM products decreased. Most companies battle inflation by increasing their own prices. However, adding 3 cents a year would have been looked at as petty. That, and “the $1.02 menu” just doesn’t have the same ring to it.

Wendy’s held its ground for a long time, but something eventually had to give.

Although some franchisees have raised prices, many have gone another route. They’ve been slowly downgrading the items on the value menu. A large drink turned to a medium, and then to a small. Then one day, they created a new smaller size - the “value size.”

Anyway, this post was prompted by the most recent change at one of the Wendy’s I visit. The total of my order was higher than normal so I asked what changed. Apparently, the small fries that I used to get for $.99 went up $.20. The value menu now offers a “value fries.”

I asked the man behind the counter how big the value size was. He told me it was tiny and that I didn’t want it. So, I stuck with the small (living large, right?).

Later, I asked a woman behind the counter to see the two boxes side by side. It turns out, the value size is a lot smaller. She gave me the samples. Here’s a picture:

Anyway, it’s a predicament every company goes though. Nobody likes price increases, but economically it doesn’t make sense to offer the same deal forever. There are really only two ways to deal with it: raise prices or decrease what is given for the price.

Tomorrow: handling inflation in a way that’s least likely to annoy your customers