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.

3 Free Tools That Changed Everything For Me

I rely on 3 tools to help me with my job. Each one helps me explain things faster, easier, and better. All tools are free and I promise you will love them after you use them.

Tool #1 Skitch

What is it?

Skitch makes it easy to take screenshots and write in fun colors on top of them. I use Skitch on a daily basis to help show people exactly what I’m talking about. I use it to point customers in the right direction on Flying Cart, visualize new features with my team, and on blog posts like this one.

Here is a 90 second video of Skitch that I made:

Tool #2 Rapportive

 

The days of not knowing who emailed you are over! You can now be the creepy guy that knows everything about all the people that send you an email. I like to use Rapportive to stalk anyone that emails me (customers, friends, and even family!)

What is it?

A free Gmail Add-On that shows you social media information of the person that emailed you. It shows you their Twitter, Facebook, and LinkedIn data. This allows me to send super personalized emails!

One of the coolest things about Rapportive is the picture aspect. It humanizes my emails, some days I’m going through 30+ emails and they all start looking the same. Seeing their picture makes me work harder on making sure my emails are friendly and to the point.

39 Second Video Tutorial of Rapportive:

Tool #3 Screenr

 

What is it?

Screenr is the easiest tool to make short screencasts. You can record your computer screen and upload the video to YouTube. No installation required.

Simple screencasts have cutdown my support emails tremendously. 40-step tedious written tutorials are now replaced with a quick 5 minute step by step video. My customers love pausing and following along. (A side benefit to uploading a video to YouTube is for SEO – Google loves videos and it will improve your search ranking – just remember to include a link back to your website!)

I hope you enjoy these 3 tools as much as I do. They have changed my life for the better. All screenshots were made with Skitch. All Screencasts were made with Screenr, and if you send me an email – all know what you look like.

Have any free tools changed your life? I’d love to know, let me know in the comments.

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.

TaskRabbit – What Craigslist Should Have Been

I had no time and desperately needed to get my laundry done yesterday (I was down to my last pair  of underwear!). So I do what I always do when I need some extra help, turn to Craigslist.

I went to the Craigslist section and all of a sudden finding someone to do my laundry became a daunting task. Writing out the job description, figuring out how much I should pay, and then also picking the right person – after all, I wanted to avoid all the weirdos that want to sniff my underwear. Luckily I remembered a friend mentioning TaskRabbit to me.

TaskRabbit is one of the best web applications I have used in a really long time. They made the entire process a no-brainer. Below are the details of what they did exceptionally well.

1. TaskRabbit already knew the top things people ask for. They made it really easy for me to select “Laundry”.

2. Next they answer all the questions I have before I even asked them.

3. This was probably my favorite thing: They show me how much I should pay. I really had no idea how much money to offer. (I decided to pay $41 because I was desperate).

4. I didn’t have to actually write any instructions. TaskRabbit allows you to use other peoples instructional templates and modify them to how you want. Luckily I didn’t even have to modify anything.

5. In minutes of posting my laundry job, I got an email from TaskRabbit saying a guy named Joel is willing to do my task! I was able to check out his profile and reviews to make sure he wasn’t a weirdo. I decided to give him the job (all it took was one click) – an hour later he was at my door… 5 hours later my 3 loads of laundry were clean, folded, and at my doorstep.

TaskRabbit really understands me. They know how lazy I am (for example I don’t even want to do my own laundry!) and so they make it just a few clicks to get the job done. I hope this post inspires you to look at your own company and strive for making it brainless easy.

Millions of Users for Everyone!

Photo Credit: El Marto

Worried about competitors? Don’t be.

There are literally millions of internet users for everyone!

There are Billions of people that go on the internet! That is a big pool of people to have access to.

Source: Internet World Stats

Yes, another social network can exist!
Yes, another hosted email newsletter service can exist!
Yes, another Google can exist!
Yes, another [insert any web company that is already huge] can exist!

Why? The Internet is MASSIVE. Tons of potential customers still exist for you!

To prove my point. I’m going to share a few companies that are all sort of doing the same thing and have millions of users.

The best example is Hosted Email Newsletter companies (all doing easily $1M+ in revenue)
MailChimp
iContact
ConstantContact
CampaignMonitor

Web Based BackUp Solutions (all doing really well for themselves)
Backupify
DropBox
Carbonite

Super Simple Blogging Service (all have loads of users)
Tumblr
Typepad
Blogger
WordPress

Super Simple Web Publishing Service
Weebly
Homestead/Intuit
Jimdo

Project Management Tools 
37Signals
TeamWorkPM
Pivitol Tracker

Social Networks
Google Plus (~50 Million Users)
Facebook (~700 Million Users)
Twitter (~100 Million Users)

Of course each company is slightly different when you look at on a granular level. But most of the companies can be easily grouped together when you take a look at their core mission.

Here is my point: DON’T BE WORRIED ABOUT COMPETITORS. There are millions of customers that want to use your product even if it similar to some thing else. Just stay focused on finding customers, serving them well, and your internet business will thrive!

PS: Yes, I do think another Facebook can exist 🙂 Let me know what you think in the comments!

Quote: The best customer service experience is when they never have to contact you.

Awesome Jeff Bezos Quote:

 5. Obsess over Customers. As Bezos said in his Wired interview, the best customer service experience is when they never have to contact you.

Forbes Article: 6 Things Jeff Bezos Knew Back in 1997 That Made Amazon a Gorilla

In my early days of Flying Cart it was my goal to get people to email and call us. We saw that as a sign of engagement.  We were completely wrong. People just want the product to work. Getting your email open and typing out a question is a lot of work and nobody wants to do it.

Remember the last time you contacted customer support? It was probably because the product didn’t work the way you wanted it to. The worst thing of all is only in very few cases does someone actually contact you – most people (like me) will just hit the back button until they find a product that works for them.

When someone contacts support with a question think about how you can solve it before they even ask it.

The Virgin America Strategy?

I had the pleasure of flying on a Virgin America (VA) today.

Why did I book it? It was cheaper.

Over the past few months Virgin America (VA) has been significantly cheaper than all other airlines. I believe VA is trying hard to make their airline tickets the cheapest and then making that cost up in other methods. Here is what they are currently doing to make up that cost:

Advertised Experiences

Google will you give you a wifi-enabled Chromebook to use on your flight for free. I’m sure Google paid a hefty penny for this deal. The Virgin America ticket counter agents even allowed Google to make an announcement on their PA system!

$8.00 On Demand Movies at Your Seat

You can order movies on demand on your flight. $8 is just the right price that I would actually pay if I was bored. Anything more than that I would feel guilty about.

Branded Everything – Product Sponsorships

One Water for your drinking pleasure and Method branded soap in the bathroom to keep your hands clean.

Low Prices, Sponsorships, and Up-Sells. Could this be how VA wins?

This reminds me of a story I read in the “Myth of The Robber Barrons” about how Vanderbilt dominated the steamboat industry in the 1830’s. Here is the story:

Moving to New York, Vanderbilt decided to compete against the Hudson River Steamboat Association, whose ten ships probably made it the largest steamboat line in America in 1830. It tried to informally fix prices to guarantee regular profits. Vanderbilt challenged it with two boats (which he called the “People’s Line”) and cut the standard New York to Albany fare from three dollars to one dollar, then to ten cents, and finally to nothing. He figured it cost him $200 per day to operate his boats; if he could fill them with 100 passengers, he could take them free if they would eat and drink two dollars worth of food (Vanderbilt later helped invent the potato chip). Even if his passengers didn’t eat that much, he was putting enormous pressure on his wealthier competitors.

One sentence summary of story: Vanderbilt made his steamboat rides free, up-sold snacks to make up the costs, and this led to his competitors going bankrupt.

I’m a huge fan of this strategy, so sign me up!

I couldn’t help myself so I did a quick brainstorm on what else Virgin could do to make their money back:

1. Partner with Netflix – give the customer the option to either buy the movie for $8 or sign-up for a free trial to Netflix and watch their entire streaming collection. Netflix should pay $30 per sign up and give them a cut of the recurring revenue if the customer stays.

2. Sell another flight right at my seat – Allow me to buy my next flight at my seat and give me a $30 discount if I do it during the flight. A good way to make this up-sell even better is let them know they can cancel anytime and the cost will stay as credit in your VA account.

What are some other ways VA can make money? Let me know in the comments, I’d love to hear them!

See Through Soap Containers at the Airport

I saw this soap container at the Denver airport and it made me smile.

#1 I always find myself pumping soap from an empty container. With the see through soap container I can know right away if I should be wasting my time or not.

#2 This is super optimized for the janitor staff. No longer do they have to check all the soap containers. It is very obvious which ones need to be refilled.

I really enjoy seeing optimizations that help the customer and reduce support time (in this case the janitor staff time).