Marketing: August 2006 Archives

Spiralfrog is a company that offers free downloads of music that are "free" because you have to listen to advertisements. You may not copy the music, so it offers piracy-prevention features to music companies. You also need to visit the site of Spiralfrog once a month; if you don't, the music will be de-activated, and you won't be able to listen to it. The New York Times has an article on this company that's supported by Universal Music Arguably, these are not very draconian measures. Once you get used to doing these, you won't even notice that you're doing them. But how many hoops are you willing to jump through to get to "free" music for the first time.

1. Is this the simplest they could make it?
2. Why restrict copying? If people shared the music with ads inserted in the music, wouldn't that increase the number of ad impressions?
3. With so many web based businesses offering ad supported free content, isn't the customer going to tune out when she or he hears the ad? What about Ad Fatigue?

Tags: Spiralfrog, Universal Music, Ad supported business models

Tom Peters posted this on his blog Depends on What the Meaning of "Is" Is. I responded to the post with my own ideas on re-imagining news shows. So here it is again (with slightly better formatting): Re-imagining Evening News: Using the themes of Analysis, Newsiness, Customisation To begin with there are precedent to Re-imagining this -

1. Periodicals versus newspapers.
2. Bloggers versus periodicals

Newspapers were used in times gone by to "catch up with the latest, that happened the day before". Periodicals were used to crunch that out - analyse it from different angles and offer balanced opinions on both sides. The TV evening news started taking apart the "newsiness" of the morning newspaper. Things that had happened during the day had already been covered in the evening news, so newspapers focused on those items that had occured the night before while giving editorials on issues whose newsiness was lost. CNN and other 24 hour news channels are now doing to the evening news what the evening news did to the morning newspaper. Periodicals stayed the same all through the TV onslaught, since they focused on analysis. The Internet and blogging put paid to that: Now you can get analysis quicker than the periodical. I think this is how the evening news should evolve. It should split into two parts:

1. Part A should be a common program - giving the highlights of the day along with quick analysis. (The BBC morning show where they discuss newspaper articles is a good example)
2. Part B should be a la carte - Depending on the preferences of the viewer, as measured by a TiVO, or some other device, the Part B will contain "newsy and analytical" content that is relevant to the viewer.

It's just a thought, but let me know what you think of it, and how Katie can use her tremendous brand to push such a concept.

This article by Sid Frank (Director, Professional services at Revenue Technologies) is a pretty good read! It was published in the Professional Pricing Society Journal in 2002. Here's a link to that article. The only shortcoming is that you need a lot of previous transactions to use this process. Six Sigma is a statistical process and cases with just a few datapoints cannot be solved using this. Tags: Pricing, Six Sigma, revenue

I got these from Guy Kawasaki's blog, where he previewed a book by Andy Sernovitz, the CEO of the Word of Mouth Marketing Association, called "Word of Mouth Marketing". There are 10 ideas in all at his original post

1. A study by the Verde Group showed that people who heard about a bad shopping experience are less likely to go to the same store than the person who actually had the bad experience.
2. The most powerful word-of-mouth advocates might be the customers who have only done business with you once so far. They are the most excited; repeat customers are probably accustomed to the great product/service and therefore, ironically, less likely to talk about it.
3. Incentives and rewards are likely to reduce word-of-mouth advertising because motivation becomes suspect. You can’t “buy” word-of-mouth advertising.

Now, I'm bootstrapping yet another venture - whose marketing effort (surprise surprise) will be driven by word-of-mouth marketing. Looks like I need to brush up on the stuff again, and buy this book!

So they take a pet theory and stretch it like chewing gum. Here's a great example of such wrong thinking: 'Product sabotage' helps consumers by Tim Harford on the BBC website.

I am against this statement of his

"But the really clever tricks are where companies tweak their product line in an attempt to persuade customers to identify whether they are lavish or stingy - the lavish customers are simply turkeys voting for Christmas."

I think tuning a product or service "package" that's a necessary way of making sure that your most precious customers - the ones that pay - see the extra value you deliver. So those customers who pay less get less and those so called "lavish" customers who pay more get more.

Which is absolutely fair.

This also means if a company wanted to give a customer a discount, the most effective way of doing so would be to offer them a higher product spec for the same price. It would be even better if the extra value offered was intangible.

Even intangible value drivers are real. Here are some examples
A "good" doctor
A "friendly" attendant at a restaurant
"Fair-trade" coffee
The list goes on....

And as a pricing consultant, I can confidently advise you and Tim that if you wanted to pay the cheapest for a cup of coffee, you could brew it at home.

Tags: Tim Harford, pricing, product management Trust me I'm an economist

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I gave a talk on pricing, marketing and in general customer segmentation and satisfaction to a group of professionals at the American German Business Club in Dusseldorf on the 21st of August. Here is the presentation I used there. There are extra notes in the "notes" section of the powerpoint. Tags: AGBC, American German Business Club, improving prices, increasing prices, consulting

Presented at the American German Business Club on 21st August 2006