Swarovski’s Marketing Plan: Create the Ultimate Tourist Trap

I went to Milan, Italy last week and asked the lady at the front desk at my hotel for a map. Below is what she handed me.

My Italy Tourist Map

Notice anything weird about this map?

It shows me a BIG swans of exactly where the Swarovski stores are located.

Do you think Swarovski is in the map business? No, they are in the expensive crystal business and they want to target tourists to come and buy crystals from their store. This is deliberate tourist attracting marketing from Swarovski, here is what I’m thinking there train of thought was:

1. Our best customers are tourists
2. Tourist need maps
3. Maps are handed to tourists in hotels
4. Lets give “Swarovski” maps to all hotels so they can give it to the tourists

If you want toursits to find you – Just Give Them a Map!

Pretty Brilliant, right?

So, Why are Tourists their best customers?

1. Tourists have money – If you have money to go on vacation, you have money to buy crystals

2. Tourists have time, they don’t have really anything to do

3. Tourists want to shop, and bring back a “souvenir”

What do you think of this strategy? Love it… or hate it. I wanna know – tell me below.

PS. Swarovski wasn’t the only one using maps. Your good ol’ pal McDonalds was too.

Ben and The Panhandler

Recently my friend Ben was walking home and came across a panhandler. Here is the conversation they had:

Panhandler: “Hey, do you know of any shelters around here?”
Ben: “umm… no I’m sorry I don’t know of any shelters around here.”

Panhandler: “Okay, Can I stay at your place tonight? It’s raining.”
Ben: (a little startled) “No, I’m sorry. I have a roommate and don’t know how he would feel about that.”

Panhandler: “I understand. How about $1.00?”
Ben: (relieved) “Sure! Here is $1.00.”

Ben is Approached by Panhandlers Every day

Living in the Mission (San Francisco) Ben is approached by a Panhandlers a lot. He never gives any of them money. So, what made this situation so different? Why did he give this one a dollar?

This Panhandler is a Sales Genius!

The panhandler understands how to influence people. He used two techniques most marketers know about.

Sales Technique #1: FOOT IN THE DOOR

The panhandler knew that people like Ben are constantly getting hounded for change. The usual response is to ignore them. By asking a simple yes or no question like “Do you know of any shelter around here?”. The panhandler was able to get Ben engaged (or “his Foot in the Door”). This simple yes/no question opens up the ability to ask Ben another question or a favor – it will be much much harder for Ben to ignore the panhandler after he responds to a question.

Sales Technique #2: DENNIS THE MENACE

Ask for something crazy so that your next offer seems like nothing. The panhandler knew that asking for a $1.00 is a lot of money since most beggers are asking for 25 cents. So instead he asked for something crazy like a place to stay so that his next proposal ($1.00) seems like nothing. Honestly I think he could have asked for $5.00 and gotten it.

The moral of the story

Next time you want something follow these 3 steps:
Step 1: Ask a simple yes/no question to start the conversation (get your foot in the door)
Step 2: Ask for something grand (like a lot of money or time)
Step 3: Ask for the thing you actually want (like a couple dollars, a 20 minute phone call, a simple partnership)

Have you ever used this technique? I’d love to know your story in the comments.

How Dwolla Sells It Before They Build It

Want to know if people will pay for a feature before you build it?

If so, do what Dwolla does! Offer a New Feature with a price tag right next to it. In Dwolla’s case it would be $3/mo. for their “Instant” feature. Right next to the feature ask your customer if they are interested with a “Let me know” button. If you have enough active users you will know in a matter of days if you have a feature your users are willing to pay for.

This is a great idea! Instead of building out the entire feature, simply describe the benefit it provides and simply ask the user if they will pay for it. If you get enough interest – go build it.

This is a win-win. The customer gets a feature they want and you get extra money. If you only get a few users to say yes, than it is probably not worth the time investment to build out that specific feature. Go and test out a new feature.

Here is a full screen view of the message inside my Dwolla account:

How Coinstar gets away with not charging a transaction fee

I first heard about Coinstar 6 years ago in a TV advertisement and immediately thought it was the dumbest idea ever. See, I was living in Illinois at the time and you could easily just go to any bank teller and convert your coins into cash for free. Coinstar charges a 10% fee – so why would I pay someone to give me $9 for $10? I hope you see my dilemma here.

Then I moved to California. Over the last 2 years I’ve acquired a lot of coins and decided to go to my nearby bank and turn my pot of coins into CASH! Unfortunately, California banks simply gave me some coin wrappers and wanted me to do all the coin counting by hand. I knew I had at least *200 pennies and had no patience to do the counting. I decided to swallow my pride and go to a nearby Safeway grocery store and use Coinstar.

After I deposited my cash I was pleased that I didn’t have to give up 10% of my money – I could simply get a giftcard instead.

They had a ton of options. Pretty much a giftcard from any of the top brands.

This is a brilliant way to avoid no fees. I bet Coinstar actually makes more than 10% off the brands that provide gift cards. Retailers love gift cards because they are high-margin and low-maintenance.

I wonder if Coinstar’s innovative approach to eliminating fees are something ATM machines should adopt to also have No Fees. I’d really love to know what you think about this in the comments below.

Side Note: Coinstar made $2 Billion in revenue last year. Their business model is simple and brilliant, “Give me $10 and I will give you $9 back”. This business model reminds me of a story  about how the founder of Reliance (the most profitable company in India) made some cash in the early days.

The Yemeni Rial Coin had high content of pure silver around 1948. Young Dhirubhai (the founder of Reliance) perceived high demand for ‘rial’ in London Stock Exchange and purchased them in bulk and melted the coins in silver and sold it to bullion traders in London. Though it was stopped in 3 months, D.A. made a few lakhs of Rupees in this transaction.

What Coinstar and Dhirubhai Ambani are doing is really the heart of any good business model, turn money into more money.

*PS I had 432 pennies and got the Starbucks gift card.

Spend More to Save More

A few months back Threadless did a t-shirt sale where you get Free Shipping for orders over $75. I found myself looking for an extra $9.99 t-shirt to put me over the top. This is when I realized I just spent $10 more to save $5 in shipping.

Companies do this all the time. They make you think you are saving money by actually spending more.

The car wash down the street had a sign that said “25 cents off per gallon with purchase of Car Wash”. I rolled in and found out the car wash was $25. On average car washes in the bay area cost $15. I thought “whatever I’m going to save a bunch of money on gas”. After pumping some gas and doing the math I realized that I actually only saved $3 in gas.

Coffee shops are amazing at this. The small coffee (12 oz) is $1.75, the medium coffee (16 oz) is $1.95 and the large coffee (20 oz) is $2.10. I can get an extra 8oz for 35 more cents. That is a great deal. It is easy to convince a customer to upgrade and spend more money.

Service based businesses that charge on a monthly basis (like Verizon and Comcast) get their customers to pay more by offering the ability to pay yearly with a discount. Cell phone companies offer you a hefty discount on your new phone if you sign up for a 2-year plan. By getting the customer locked into to a 2-year plan it guarantees that the customer will stay on for a long period of time. A $200 discount on a phone gets you to pay about $2,000 over a 2 year period.

Behavioral Economist, Dan Ariely gave a Ted talk where he showed a copy of the the Economist pricing subscription page.

He passed out the Economist’s subscription pricing options to his students and studied the results. He first passed out a pricing page that list only two options:

Option 1: Online Only – $59
Option 2: Print Only – $125

The result was majority of the students picking option 1, the cheaper option at $59.

Next, Dan passed out a pricing page with three options:

Option 1: Online Only – $59
Option 2: Print Only – $125
Option 3: Online + Print – $125

The result was majority of the students picking Option 3, the expensive option at $125.

This is a pretty powerful example that shows you can get the customer to spend more money if they feel like they are getting a great deal. Option 3 makes you feel like you are getting the online version for free! You can watch Dan explain the study in this YouTube video around 12:30.

So next time you are trying to figure how to get more money from your customers figure out a way to help them “save money”. Do you have any examples of how companies got you to spend more money? Would love to hear about them in the comments.

How Domino’s Pizza is taking a bite out of India

I was in India the past 10 days, I go about every 3 years. This time I noticed one big change: Domino’s Pizza is HUGE in India. Every few blocks has a Domino’s and the people are going crazy for it. Here are a few of the ways Domino’s has tailored their business to be more India friendly.

Things that Domino’s changed to fit India:

Veg Friendly Everything

50% of the entire menu is vegetarian. They clearly specify which menu items are vegetarian by showing you a green dot next to the item. 10% of India is completely vegetarian and 30% of India is vegetarian due to religious reasons at least 5 days out of the month.

Moped Delivery


The traffic in Mumbai (one of the biggest cities in India) is really bad, much worse than Los Angeles. It takes 20 minutes to go a mile – this is due to over population, bad roads, animals roaming the streets, and people crossing the road whenever they want. Mopeds are definitely the fastest way to get around the city because they can easily weave through traffic.

Goodbye Parmesan, Hello “Spice Mix”!

Indians like things spicy. Instead of including Parmesan cheese packets Domino’s includes an “Oregano SpiceMix”. They have also spiced up their pizza recipes to please the Indian palette. The spicy Sriracha sauce that we are all use to in America is water compared to the spice level in India. A spicyness level of 2 stars in India is 4 stars in the US.

Things that Domino’s didn’t change for India:

Home Delivery

It turns out people are lazy everywhere. Food at your door for no extra charge is a great service.

Self Service

This one was kind of a shocker to me. Indians are accustomed to being waited on hand and foot at a restaurant, you just don’t expect to have to clean up after yourself.

But Domino’s Pizza India didn’t have any servers or bus boys during my visit. All they had was a simple trash can with a “Use Me” sign. By educating and training their customers to clean up after themselves, Domino’s India can employ less people and keep their prices low. It is interesting that Domino’s decided to challenge Indian culture here even though they were willing to make a lot of other cultural changes that are outlined above.

The Domino’s Pizza Brand Name


The Domino’s brand name is strong. They have been featured in hundreds of movies and have run gazillions of TV ads. Even though Domino’s was new to India a few years ago millions of Indians heard about it before hand allowing them to have a massive launch.

Domino’s India is ran and managed by an Indian based company called Jubilant Foodworks. The best decision Domino’s made in their India strategy is understanding that they are not an expert in India, so they partnered with a strong team that truly understands India to help grow their business there.

Here are 3 things I learned from Domino’s India:
1. Tailor your business based on the countries’ culture (I know obvious!)
2. Keep your brand identity
3. Don’t do it yourself – Find someone amazing that knows the country to help you run and manage the business abroad.

What could Domino’s do in your country that would make it thrive? Let me know in the comments.

The Art of the Downsell and Why CostCo has big screen TVs at the entrance

$10 for a big bag of berries – no problem that’s cheap!

$15 for a big bag of spinach – sounds pretty affordable to me!

Everything seems like a great deal at CostCo!

As soon as you walk in to CostCo you see the most expensive items on display: LCD TVs. This sets up your frame of reference for all you will see next. After seeing a $1,500 price tag, a $10 bag of spinach seems really cheap.

Free Trial and the Buy Now Button

Why buy something when you can get it for free? I’ll take the Free Trial please. The “Free Trial” button seems more appealing to click on when it is right next to the “Buy It Now” button. All of a sudden the “Free Trial” looks like a great deal and something worth doing. In a recent case study done by Visual Website Optimizer and GetResponse.com the number of “Free Trial” sign ups increased by 158% when placed next to the “Buy Now” button. Best of all, the total number of “Buy Now” sign ups didn’t even decrease.

Show Your Top Package First

Almost all service professionals do this. Internet SaaS companies, wedding photographers, consultants, upscale restaurants, and anyone else that knows what they are doing when it comes to sales.

For SaaS companies they first show you their highest paid package first. SaaS companies will show you their highest priced plan on the left hand side of the page (in the USA people read from left to right so the left-most package is naturally read first).

I recently went to a nice restaurant and they had 2 options. The full dining experience for about $100 or an a la carte menu where you can pick and choose what you want (and get something cheaper). I wanted to get the $100 deal but it was to steep for my budget.  So I didn’t feel so bad when ordering $60 worth of a la carte items. But I probably would have spent more like $30 if I hadn’t seen the $100 option.

Get The Customer and Start a Relationship

What I’ve learned the most about down-selling is always try to please the customer. Sometimes they really want to use your services but they just can’t afford it. The goal is to get a new customer in a budget that works for them. Offer high but let them go low 😉

Launching an Internet Startup with No Coding Experience

This is a guest blog post by Nate Yu, the non-technical business savvy founder behind Seek and this is his story of starting his internet startup and getting his first customers.

When I met Rishi for the first time, it almost felt like I was being set up on an awkward blind date. All I knew about the guy was that he was the cousin of my good friend, Jamie, and was supposedly some sort of startup/marketing wünderkind. Or as Jamie so eloquently put it, “the type of guy that just gets. shit. done.”

Started with a Romantic Meal

As we shared a romantic meal for three (his business partner Robert also joined us) at Sunflower Vietnamese Restaurant in the Mission, Rishi and I started talking about a project I was working on based around the concept of supper clubs.

For those of you who are unfamiliar, let me start at the beginning. My introduction to the world of supper clubs came when I volunteered at a dining event. It was held at a secret location that was only privately revealed a day before the event. The location was a mansion in the South Loop of Chicago, where I shared an evening with twenty strangers over seven courses meticulously prepared by chef Efrain Cuervas. While it had the feel of an intimate dinner party hosted by a close friend, the food was on par with Chicago’s most celebrated fine dining restaurants. Simply put, it was incredible.

Dining Experiences are Hard To Pull Off

As memorable as these dining experiences are, however, they’re deceivingly difficult to pull off. Logistically, it’s a handful for one chef to manage: beyond the monumental task of cooking and entertaining 15+ guests, there’s website creation, newsletter management, ticket/payment processing, publicizing your events, securing a venue, and a whole slew of other operational hassles. Further, there is a major communication disconnect between chefs and patrons; unless you subscribe to their individual newsletters or hear about events through word of mouth, discovering and booking seats to these extravaganzas can be quite a challenge.

A Business Idea After a Brainstorm

After brainstorming with my chef and foodie friends, I set out to create a platform to ease all the pain points that were preventing chefs from throwing these events and diners from finding or attending them.

Like many new entrepreneurs, I had an idea I was passionate about and one, at least from the early feedback I was receiving, that would actually be useful to chefs and adventurous eaters. This, did not however, mean I had any clue on how to build it.  Enter Rishi.

Start Small and Build It Today

While I debated several options, like partnering with a programmer, hiring a freelancer, or sucking it up and enrolling in a ruby on rails class through Code Academy, Rishi’s advice was this: “Start small and build it today.” {tweet} And by today, he meant, literally today. Like immediately after lunch.

Rather than building my site all at once, Rishi suggested that I focus on one chef at a time, building individual landing page for them to host their very own supper club.

Immediately, I thought of my friend Alia, a recent culinary school grad who had just started her own catering company. We’d already been tossing around the idea of hosting dinners as a fun side project and way to get her name (and amazing vegetarian cooking) out there, so I decided she’d be perfect as the first chef for my site!

After lunch, I headed up to Rishi’s office and dedicated the next couple of hours to seeing what I could build with the meager programming knowledge I was equipped with. To my surprise, it was way beyond what I had expected.

After Several Hours… I Had a Functioning Site!

After several hours of tinkering and leveraging tools like Weebly (for web design) and Eventbrite (for payments and ticketing), I had a functioning site. Albeit, a pretty ugly functioning site, but at the very least an easy way to test out the concept and see if something like this was actually helpful to chefs.

I spent my remaining days in SF working on the site design, asking friends and family for feedback, exploring other useful tools like MailChimp and ChartBeat, and eventually presented it to Alia. When I returned home to Chicago, we made the exciting decision to use the site to launch Seek, a vegetarian supper club with a focus on whole, natural ingredients.

Success!

As we were both in uncharted territory, we weren’t quite sure what type of response we were going to get. To our surprise, however, within a few days of bringing the site live we were picked up by a food blog and had hits from total strangers, who signed up for our newsletter and even booked seats to our first dinner! Additionally, we received a request to host a private corporate event. Soon after, we put together our first e-mail newsletter and sent it out to forty of our closest friends and family members. To our delight, our first dinner sold out by lunchtime.

I’m super excited to be hosting our first dinner in two weeks and can’t believe how much I’ve learned and accomplished since that lunch at Sunflower. So my thanks to Rishi for his invaluable advice to ‘start small, and to start now’. Looks like Jamie was right about Rishi after all.

If you are interested in a eating the best meal of your life, please sign up for Seek’s newsletter here to learn about their next events in your area.

Amazon’s Secret to Building Products: Start with a Press Release First

Amazon Prime Ad

I found this gem on Quora by Ian McAllister.

Question: What is Amazon’s approach to product development?

Answer:

For new initiatives a product manager typically starts by writing an internal press release announcing the finished product. The target audience for the press release is the new/updated product’s customers, which can be retail customers or internal users of a tool or technology. Internal press releases are centered around the customer problem, how current solutions (internal or external) fail, and how the new product will blow away existing solutions.

If the benefits listed don’t sound very interesting or exciting to customers, then perhaps they’re not (and shouldn’t be built). Instead, the product manager should keep iterating on the press release until they’ve come up with benefits that actually sound like benefits. Iterating on a press release is a lot less expensive than iterating on the product itself (and quicker!).

Read the full answer on Quora.