Create strong routines = long term success

I remember being a toddler and not wanting to brush my teeth. In an effort to keep my teeth clean (and to save thousands on dentist fees) my parents made a chart. They went and made my younger brother (who always brushed his teeth) a chart also. When we brushed, a sticker was placed on the chart. When we brushed two times a day for a whole week we got a really big sticker placed on the chart. By appealing to my competitive side, my parents managed to get me to do the unthinkable; they got me to brush my teeth.

While I am not a dentist, I never understood why little children needed to brush their teeth. Weren’t they going to fall out anyway? I am sure that there are medical reasons why children must brush, but I am also confident that proper routine as a child will save that same child thousands of dollars on dental fees as an adult.

A few years ago, I was working at a telemarketing sales office that was selling a “long sale” product. Out of laziness (and because every agent gets overwhelmed for their first few work days) agents were not using the CRM properly. After a few months, management stated feeling their salaries tighten since the salesmen were not closing enough deals. After considerable research, management came to the conclusion that the low closing ratio was not due to lack of training; rather it was simply because the salesmen were not following up with their clients. Every sales agent had tens if not hundreds of potential clients who had “slipped through the cracks”.

Management put a HUGE push towards using the CRM that was offered during each agent’s initial training period. At first, they offered bonuses to anyone who had every client in their CRM by the end of the workday. As that started costing significant resources and the sales ratio did not yet justify such an allocation, they changed their plan of action. Management implemented the following rule, “Any client who was not in your CRM was not your lead. That lead became fair game to any other sales agent. But to their dismay, even after agents were retrained on the CRM software, agents were not able to seamlessly incorporate the CRM into their everyday use. Some would come in early and enter all of their leads from the previous work day, while others would stay late to input that same information. Some would even take a break between calls to input the information on the spot so that they would have a clear description of the call and the client’s needs. Management’s plan worked for a few weeks. What every agent had in common though was that after a week of work every agent became lenient again with the CRM data input.

The agents were not able to break their bad habits. For reason unclear to me, the business eventually closed down. It is possible that the product was no good, or even that the business model was off, but one thing is for sure, we will never know. All I do know is that the salesmen let themselves down by not trying to close every available deal. To this day I am a bit confused about what happened at that office. Particularly in a sales office every employee must do everything in their control to make as much money as possible. By simply inputting their sales information into the CRM each agent would be increasing their chances at closing deals. Why weren’t the agents able to break their previous bad habits?

I have found that setting correct routines always pays off. Even in situations where that might mean working twice as hard for the initial few days of a new job. While it may take an agent longer to make their first few sales, that agent will be creating a proper routine with will help them generate success down the road. An agent’s ability to build a proper foundation is what will protect that salesman from the intense sales turnover found in the telemarketing industry. Similarly, a company that enforces initial proper routine and discourages sales shortcuts will be around to see the success of that simple decision.

Success can be yours for only $10.99

Why are some people successful while others struggle? The world seems like an unfair playground where some lucky few live the good life as the rest of the world watch in envy. Wanting to be a successful person myself, I studied the element of success in order to understand how I could attain this illusive attribute.

I have created a 6 point summary on what I feel are the building blocks to success.

Step 1: Vision
Many people are blocked from achieving their life long goals because they lack the very first building block required: vision. What did Moses, Abraham, and Martin Luther King all have in common? They all had a dreams. All beginnings start with some sort of vision. Whether your personal vision is of wealth, happiness, or love, if you can’t envision it, you will not be able start creating an appropriate plan of action.

Step 2: Plan of action.
A plan of action is different than a vision. Many people have dreams of living a successful and happy life, but few actually follow up on those dreams with a creative plan of action. Get a good education and learn a solid trade. Dreamers do just that, they dream. Until you start to create a means, there will never be an end.

Step 3: Drive/Motivation
Everyone wants to be rich, but only those who have the motivation to get off their rear end can ever amass significant wealth. If you do not see any family estate checks coming your way in the near future, that might mean it’s time to get motivated about creating immediate income. Motivation has many factors and oftentimes can have many different faces. Whether someone is looking to impress others, to win over a potential spouse, or simply to be respected, all of these things within the right circumstance can create personal motivation. While some motivational speeches linger longer than others, no one motivational technique works best for all. Every clock ticks at a different time and with a different rhythm. Motivation is the building block towards creating success.

Step 4: Buying the lottery ticket
To this day no one has ever won the lottery without buying a ticket. The first real step at creating success requires taking a chance on ones self. Simply put, sometimes you need to pay $1 in order to win millions. From my experience, majority of dreams do not turn come to fruition not because of laziness but because individuals are not able to get past step 4. Success requires taking chances. To some, this can be the scariest step.

Step 5: Believing that you can succeed.
Many people who have a vision and are able to create a proper plan of action, are still not able to believe that they can actualize their goals. Just because someone “buys a lottery ticket” does not mean that they think they have any chance in winning the lottery. If you do not honestly believe that you should be awarded your dream job, you will never be able to actualize your lofty aspirations. While I do not suggest going to group “success seminars”, I do believe that there is value in what these seminars have to offer. Believe in yourself a bit more each day and as your confidence grows so will your sudden found success.

6: Work hard.
There is a Hebrew saying that goes as follows, “According to the pain - will be the gain.” Stop reading about multi level marketing schemes and get rich quick programs. If there were ways of making millions overnight, everyone would be doing it. Your work is only as good as the time and effort you put into it.

Remember there is no road to overnight respect and recognition. Create reasonable goals for yourself and with time you will find yourself on the path of actualizing your goals.

Vote on my outsourcing poll

http://polls.linkedin.com/p/29175/oyugx

My 6 points on sales burnout

Being the CEO of an outsourcing company has taught me two important things. Flattery will get you somewhere, but honesty will get you everywhere. Secondly, even the best employee, if not treated properly will burn out.

In my opinion sales might have the highest burnout rate of any profession. Burnout happens for different reasons. Some are avoidable and some are not.

Here are six reasons of how I have personally witnessed employee burnout in the outsourcing arena.

1. Long Sale - Short Sale
Certain sales people can only sell the short sale. I know that personally I have trouble with a long sell. There is a self rewarding feeling when closing short sale after short sale. In my experience even in the case where the commission payout is less, sales reps would rather close 10 sales in one week then 1 large sale. The adrenaline of closing helps employees over their next potential hurdle.

2. Too much stress
Sales managers often take the fun out of sales by putting unnecessary pressure on their sales team. While it is normal to have pressure in sales, too much will eventually breed resentment between sales reps and managers. Create realistic goals that can be achieved, otherwise goals will not be met.

3. Lack of recognition
Sales people need to be recognized for their sales successes. To this day I still feel energized by getting a sale and being acknowledged for it. While being rewarded financially is great, being recognized for a great achievement can mean even more. Simply writing an employees name on a white board because they reached a specific sales goal in most circumstances is not enough. Creating goals is important, but even more important is creating valuable recognition programs once those goals are reached. Additionally, I have found that the opportunity for advancement in a company is often times much more valuable than any possible bonus, raise, or prize.

4. Lack of Enthusiasm.
Selling the same thing over and over again without any change in product or responsibility can lead to burnout. As a general rule, people need to be challenged. Scripts need to be changed, and things need to be mixed up. Whether "mixing things up" means playing some music in the office, or even switching the seating arrangements, this kind of obvious refresher is mandatory. Doing exactly the same thing everyday can strip employees of their positive motivation. By creating program excitement you will at the same time be creating more potential sales.

5. Not Suited for the Sales Arena
Just because someone is good at sales does not mean they enjoy it. Many sales people are just in the wrong profession. Doing something that you dislike (even if you do it successfully) can lead to burnout. While selling can be the very nature of all business (a true salesmen can see sales everywhere, whether it's in a job interview, or bargaining for a car) not everyone is built to make a career out of it. Waking up everyday and heading off to the boiler room will inevitably break even the best of sales reps.

6. Respect
Getting back to my opening statement of this post, “Flattery will get you somewhere, but honesty will get you everywhere.” Sales reps are just as educated as any other professional. Everyone who is someone in sales knows which companies are paying their employees, and which companies have created pyramid schemes with hopes of striking it rich. Pay your employees on time and what they deserve. Do not forget that ultimately only your sales reps can bring success to your organization.

We're sorry sir, here is $50. Please don’t hate us.

For all those who don’t know, I have had some issues with Capital One. Some very troubling issues.

After significant amounts of time on hold with customer service, I decided to switch my purchasing power back to Visa. That’s when Capital One took out their “big guns”. They started throwing money at me.

Let me explain.

Capital One admitted to me that they have no idea what they are doing. For some reason unknown to them they canceled two of my credit cards. A plausible reason for the incompetence could stem from the fact that all important figures in the Capital One fraud department have been outsourced to India. In an effort to band-aid this terrible business decision Capital One has decided to hand out Ulysses S. Grant's to anyone who has a complaint.

I wonder if this specific tactic could work in the real world. I can see it now, a big bully is pushing around some smaller underclassmen. “Don’t beat me up big bully. Here, take 50 bucks.” I have a feeling the bully would take the money, and still do some face pounding.

Realizing this was a strange phenomenon, I decided to try and push my luck. I told the agent that $50 was not going to be enough. I demanded at least $100. “I am sorry sir, the maximum I am allowed to give out to frustrated customers is $50. If you would like, call again tomorrow and I will give you another $50.”

I guess their business plan is working. Apparently, $50 bills work as a good pacifier to appease angry customers when you’re outsourcing all of your telemarketing to Indians.

You Always Get What You Pay For

I have written many times about specific companies' lack of customer service. I find that people suffer from bad customer service in Israel specifically because of the accepted aggressive mentality of Israelis. While they don’t mean any harm, terrible customer service is the outcome.

I have somewhat grown accustom to the abusive way Bezek, Hot, Orange, etc. deal with their customers. Certain things still do tick me off though. Throughout all of my bad experiences I have had, never did I receive terrible customer service not because the company representative on the other line was a jerk, but because the person on the other end off the line didn’t actually speak English!

Let me explain.

I write this blog after hours of being on the phone fighting with simple minions who, to my current knowledge, really do not understand any English. They simply read from a script. The conversation went as follows. I said X they said Y. I said Z they said A. In a case when I said something that they didn’t understand they simply reiterate the last sentence that they had said. No joke! I wanted to give my readership a glimpse into my most recent painful experience. Here goes...

It all started with my “clever” decision to switch all purchases to the new Capital One No Hassle Rewards Card. Capital One is the only credit card (that I know of) that does not have a foreign transaction fee. In addition, they offer the exact exchange rate on purchases made abroad. That, tied together with the fact that they offered me 2% back on all purchases, makes me a proud Capital One Platinum holder.

My most recent episode occurred when I called Capital One to dispute a fraudulent charge on my credit card. I had purchased a Bluetooth adapter for my computer in some shady Israeli hardware store. When I returned to my office to try out my new gizmo, to no one’s surprise, the adapter did not work. I returned the item to the store. Only after the owner had his precious merchandise back did he alert me that there would be no refund or store credit for the damaged merchandise I was tricked into buying.

With the power of a platinum MasterCard in my wallet, I walked off. All the while knowing that while he might have won the battle he would surely lose the war. There was no need for me to get physical or raise my voice. I would flex my MasterCard muscles and get my way. I called up to dispute the charge.

Life was fine and dandy until a few days ago when I tried to make a purchase at New Deli (they make best hot dogs in town). “I am sorry sir, but this card is being declined.” How could that be? I had just gotten my new credit card a few months ago! I gave the man my Israeli platinum card (even more impressive than my American one. It actually has a sim card in it!). “I am sorry sir, but this card is also being declined.” I thought the worst. Maybe the Mossad had somehow found out about my hot dog obsession and had canceled my bank accounts and were now searching for me. It took me a quick second to realize how silly that possible scenario was. (Turns out my Israeli card not working was just a fluke).

I got back to my office and told my employees that I would be making a business call and therefore would be unavailable for a bit. I closed my office door and put on my investigative hat. I called up Capital One “customer service". “I am sorry sir, but I see here that you contacted us a few days ago and canceled that credit card. A new one has been issued.” Apparently they had mistakenly confused my story. Capital One thought I had called them and explained that someone had stolen my credit card. Capital One had already canceled my credit card. I was quickly explained that it was impossible to reactivate the card and that was why a new one had already been issued. I would be receiving the new card in the mail within 10-14 business days.

After 3 hours of fighting with incompetents on the phone I was finally transferred to someone located in the United States. “Sir, I am sorry about the confusion and I will reactivate your card. There will be no need for the replacement card. You should be able to use your original card now.”Apparently the nice man located in the United States was just as incompetent as the other 15 Indians who were getting paid just under $1 an hour. You cannot reactivate a shut down card.

I got my replacement card in the mail overnight UPS from the United States. Of course my wifes name was spelled wrong.

When outsourcing your Customer Service please at least try and make sure the people who will be working for you ACTUALLY speak English. I learned a long time ago that you always get what you pay for. Its too bad Capital One is perfect for my spending needs or I would cancel it! I guess my revenge is in the fact that it costs a full month’s Indian’s salary to UPS the credit card to Israel. Still unsure who came out with the upper hand on this one…

Where is your lost and found box?

I have seen some weird things so far in my outsourcing days. Today, I came across something that really made me raise an eyebrow.

I am sure you are familiar with the liability forms located on all hotel paraphernalia. “The hotel is not responsible for lost or stolen goods”. Or when you rent a car how the rental company makes you sign a form stating that, “The car rental company is not responsible for stolen items left in the car or for damage to its underbelly and tires”

Well just the other day I was introduced to another seemingly redundant liability warning.

Let me explain.

On one of the projects IOC Israel outsources for American companies, restaurants owners need to send copies of their menus so my team can put it on the website Bite2Eat.com. Every restaurants menu is a bit different, but they all have the same minimum denominator of food and prices. Some menus are fancier, others are in small font, Some are so big they don’t fit into a fax machine, but they all share a minimum level of professionalism.

I got a menu sent over to my office today that was nothing like its others! Every food item was situated next to a cartoon animal. (Snoopy - Garfield - Barney - all sorts of others I could not distinguish). As I was perusing the menu I happened upon an even greater abnormal addition to this already strange menu. This menu had the words, “The restaurant is not responsible for lost or stolen items on the restaurant premises” printed in the largest possible unsuspicious font.

Losing something in a hotel - plausible, having something stolen from your car - believable, but what exactly are people losing at a restaurant? Their pants? What valuable items are people bringing into restaurants these days? When I go out with my wife I bring only myself and my wallet. How often are people and or wallets going missing in this specific restaurant?

Could this be a scheme where the restaurant secretly steals your stuff and then points to their protective liability sign. I can see them saying, “Hey, look at the sign! We aren’t responsible if someone stole your shirt while you were sitting eating your food”.

I dunno guys. Something sounds a bit fishy…

Elevator madness

The laws of elevator physics requires passengers to exit a full elevator before others can enter. This apparently needs to be written in large, bold, and underlined type on every elevator located in a mall.

Let me explain.

Just a few weeks ago I went shopping in Malcha mall (Jerusalem) and was witness to an amazing feat. People were standing in line waiting to ride the elevator. In fact, a small Israeli boy asked me if it was free to ride. I had never seen people wait so patiently in line before. Everyone was staring at the monitor that had written on it which floor the elevator was currently positioned on.

I thought to myself, why would any human being ride an elevator when there is an escalator located near by? Do they have a stroller, or a small child with them that requires the use of an elevator? Is it the fancy see-through glass encasing the elevator that excites them enough to wait in line? Could it the cool lifting feeling that the elevator offers its passengers? I would think that an escalator would be a cooler sensation, look ma, these stairs move!

So there I was with my double stroller, 2 crying babies, bags of already purchased items, and in front of me in line for the elevator was a bunch of perfectly healthy looking teens. Albeit arse looking, they did not appear to have any physical impairments. Everyone was waiting patiently for the elevator to arrive.

Once I did successfully enter the elevator I was quickly pushed into the back by a group of over eager passengers. When the elevator finally reached my floor, I was not even able to exit the elevator as more and more people pushed their way into the elevator!

What is the marketing secret behind the elevator? Companies all over the world have tried without success to market items that contain elevator levels of excitement. Some unique products were close to reaching this high level of customer anticipation. Companies like Beanie Babies, Tickle Me Elmo, Apple, (just to name a few) have spent millions in marketing and are still not able to get people to wait in line in order to receive their products.

I am going to open this one up to the blogging world. Is the appeal of the elevator simply the laziness of modern man? Am I the only person left who takes the stairs?!

The Reverse Loss Leader

A reverse loss leader occurs when a stores “loss leader” actually costs them a customer. This can happen by a loss leader being inappropriately priced, or by a store forcing customers to buy astronomical amounts of merchandise in order to even qualify for the “loss leader". This reversal of a great sales tactic surprisingly happens fairly often. It actually happened to me just the other day!

Let me explain.

I went shopping yesterday in Ace hardware store. I was looking for a hat rack and other possible items for my new hat store (I bought a hat store last week. We are still looking for a name, suggestions are welcome). While I was perusing the aisles I happened upon a terrific sale. Giant plastic bins great for storing childrens toys, blankets, books, whatever, at an amazingly low price! The bins were marked down from 112 nis to 69 nis and further marked down to the low total of 20nis per bin. Obviously excited, I stacked 6 of these bins into my cart. I would have taken more, but my cart was totally full from the extra large bins.

Not wanting to take a chance that the sale would end in the next few minutes, I sped straight to the checkout line. On my way I was stopped by a sales agent, “You know those bins are only on sale if you buy 500 nis worth of merchandise. Once you have purchased 500nis only then you will get one bin for 20 nis”. He had understood that there was no way that someone would buy the bins for the proposed not on sale price of 69nis.

Apparently I was not the only customer to be confused by this strange loss leader. If ACE had actually written, “Buy 500 nis - get a plastic bin for the discounted price of 20 nis” I would not have gotten confused.

For a few seconds I debated buying 500nis worth of junk. It only took 3 seconds to return the items to their shelves and eventually leave the store.

This just in! No one is spending 500 nis in order to save a few shekels. Additionally, please put prices on store merchandise. Not everyone will be spending 500 nis on every purchase.

That loss leader, lost them a customer.

With great power comes great responsibility

I have a secret to share. My television fixes all broken electrical appliances.

Let me explain.

Over the past few years whenever I had a problem with my cell phone, my ipod, Or even my DVD player, I would simply put it on top of my television and 48-72 hours later the issue would be fixed. My items would be as good as new.

Recently I have started to wonder how I could possibly market this great phenomenon. I created a business plan that would require minimum investment (I would need to buy 2 or 3 new televisions in order to fix 20-30 appliances per 72 hour time period)

I planned on charging based on the size of the appliance that needed to be fixed. The more space your item took up on top of my television the more I would charge.

With my business plan in hand I felt confident that I was onto something with real potential. I approached a few possible investors and each of them were perplexed. They asked, "How could I patent the television fixing appliance principle? How could I protect myself from copycats who will piggyback off of my new great invention?"

They were right, once word got out that televisions could fix electrical appliances I would never be able to make money by fixing them. I would be destroying an entire market place. Electrical appliance repair is easily a multimillion $ industry.

On one hand, I do not want to announce to the world that 43 inch Hyundai televisions have the built in ability to ??pretty much?? fix any electrical appliance as long as it (the appliance) fits on top of the television. But on the other hand, don't I have a responsibility to the people? The world demands a cheaper and simpler way to fix its appliances! With great power comes great responsibility.

Once you pull the pants down - it is impossible to bring them back up.

In order to ensure price control a unique product must enforce a MAP (minimum advertised pricing) pricing policy.

For those with little experience in the retail world, MAP pricing forces wholesalers and retailers to keep to the proposed manufacturers' list price. Should a retailer sell the item too cheaply, he will be blacklisted. In today's market of aggressive internet sales, under cutters, and bargain aware shoppers, the only way to ensure your suggested price points is to force sellers to sign a MAP pricing agreement.

There is a commonly known slogan that floats around in the retail marketplace. "Once you pull the pants down - it is impossible to bring them back up." Meaning, once one fool decides to heavily discount an item, no other retailer will ever be able to make full margins on that specific product again. (My grandfather uses the same slogan in Yiddish - I think it has a totally different meaning).

Ever wonder why for the first few years of circulation Crocs were not attainable in Israel for under 200NIS? Wouldn't it make sense for one of the many backwards shops on Ben Yehudah Street to lower their price points in an effort to shift the equilibrium and create more sales? When a store buys inventory they need to feel confident that they are not going to have their margins cut by a discount store located down the street from them. Hence the creation of the MAP pricing strategy.

Before I got into the call center business I was employed to do sales for a midlevel international manufacturer and distributor. The company's name is not important as I am confident they are not doing anything irregular amongst their industry. In an effort to increase sales and customer awareness of the products that my company manufactured, the sales team was explicitly instructed to contact those retailers who were blacklisted for breaking MAP pricing agreements. We were told to do this in order to create a "push for the product". Items we distributed were also sold to those same blacklisted stores, with hope that they would never cut off the hands that fed them.

Like all sales strategies, MAP pricing is only as strong as you enforce it. Unfortunately for the company I was working for, a few blacklisters bought hundreds of units of the items we manufactured and sold them for minimal profit. They afforded to do this based on the fact that they were able to sell huge volume since every other shop was following the MAP pricing agreement and was therefore selling the item for nearly double the price. After months of selling the item, it became nearly impossible to get anyone to touch anything that we manufactured for fear of being undercut.

Similar to real life, the rules only apply to the good guys. Promptly after realizing this company's sales strategy I decided I had had enough. Obviously I was not paid for my last few weeks of work. Someone who takes advantage of the system will do just that in every case possible. Whenever someone asks me, "Where can I find a good job?" I always tell them, "Wherever you do decide to work, keep your eyes open." Regretfully, there are a lot of dishonest people out there. If they are dishonest with others, you can be sure that when the time comes they will cheat you out of your paycheck.

Sales Terms

It's your first visit to Israel and you decide to take a stroll around town. You are hoping to buy some nice souvenirs for family and friends. Lucky for you the nice tourist shop in the hotel has decided to give you a 50% discount because you are such a brave tourist. Additionally the beautiful Judaica shop on Ben Yehuda is giving you a 60% discount as long as you pay over $2,000 on items in the store. These shops are giving you these "great" discounts because its their "Grand Opening Sale". What a wonderful day!

But you know what they say… if it’s too good to be true, it probably isn't.

Here are some sales terms that in America mean true savings, but regretfully here in Israel mean true headache.

List price: Disregard this number. There is no connection between this number and the actual price. There is no MSRP in Israel. A manufacturer would never have the chutzpah to "suggest" a retail price to a wholesale company. Each store makes up a list price that fits in well with their "huge" discounts.

Large order sale: Now we're talking extreme savings - or so you would think. Many times I have been told, "The price for one is 30 shekels, but I will make you a deal. I want to sell all of the pieces I have left in stock, if you buy all 90 I will sell them to you for 28 shekels.” Sounds like a good deal right? But what am I going to do with 90 wine glasses?

Factory outlet: Rumor has it that Naot has a factory store up north. I still have not witnessed this first hand, and cannot therefore attest that it is not some sort of sales scheme. As a default, I would be wary of any Israeli telling you, " This price is better than anywhere else, there is no need to do price comparison. We are the factory outlet".

Seconds: Merchandise that is more extensively or apparently flawed than irregulars and imperfects and should be more deeply discounted; it sounds like a good deal right? Between you and me, if it looks broken, it probably is…

Comparable value: What the retailer considers the merchandise to be worth. This does not mean the item ever did, or ever will, sell at that price. All in all, this is a comparatively unscientific term and shouldn't bedazzle you. Disregard it, similar to "list price".

Liquidation sale: This is generally held by a store going out of business in order to completely unload stock. Discounts often start at about 30 percent and go up to 80 percent and more, as the store counts down to its final days. Note: Be extremely wary! There are stores in Geula and Meah Shearim that have been going out of business for 20 years now. I have to admit it’s an interesting sales tactic though…

Close-out sale: Another potential for major savings. In this case, the retailer gets a deal from the manufacturer on discontinued items, and passes some of the savings on to the consumers. As if! What’s really going on is that the store is having problems selling the merchandise. To make matters worse, the store has in addition realized that the items they did manage to sell had defects. The store has now decided to move the product at a faster rate, in order to get it off their shelves.

Grand opening sale: This sales strategy normally is used to increase market share and shop awareness amongst potential customers. Unfortunately, this commonly abused sales tactic works only on tourists. After seeing stores that have had grand opening sales for the span of a decade, you start to wonder if this tactic ever gets old… I figure, if they are still having the sale, there must still be people out there being fooled.

Balloon sale: Common sale found in the United States. To be honest I have no idea how it got its name. I have no idea how a balloon can attract customers unless they are looking to sell items to children aged 2 -4. Finding customers in that age bracket who have credit cards would be challenging unless your store is located in Manhattan.

Buy 1 get 3 free: This sales tactic was made famous by Optica Halperin. After tens of years of customers purchasing only what they needed, Optica Halperins sales and marketing team got a bit greedy. In an effort to lure potential customers they quadrupled their prices and offered a “buy one get 3 free sale". Sounds great right? But who needs 4 pairs of glasses? Note: Optica Halperin did not realize that prescription glasses are not really an impulse buy.

Moadon: Many Israeli stores have picked up on this sales tactic from the United States sales giants ( Best Buy - Walgreens- Giant Food) . Unfortunately, they did not calculate the discount to Moadon purchase price properly. “ No sir, I am not willing to pay 500 Nis right now so I can save 2% on all sock purchases I will be making at your store all year”. Do not be fooled by the potential savings - rarely does it make sense to buy into a Moadon. If It did they wouldn’t only ask you about signing up once you had taken your wallet out in preparation to pay. (my mother in law thinks some Moadonim are worth it…)

All in all, I love Israel. Even though the price points in the United States are better, I am happy I live here. As you can tell by this and also previous posts, I did not move to Israel for the sales. I moved here because that’s what an observant Jew has got to do! (also because my in-laws are great!)

The Loss Leader

I had the wonderful opportunity of spending a short but relaxing vacation with my wife ( no kids - they stayed by her family) at the Dead Sea this week. I was highly impressed with the hotel, and even more so by it’s keen understanding of the concept of having a “Loss Leader”

Let me explain.

We stayed at the Golden Tulip Club located on a private beach on the Dead Sea. The Golden Tulip, like all other 5 star hotels offers all sorts of gimmicks in order to increase their “market share” of the tourists and Israeli vacationers who wish to spend some idle time by the world’s lowest point below sea level. While every hotel has its uniqueness, the Golden Tulip found its way into my wallet the traditional Jewish way, By feeding me.

Some hotels offer free upgrades, some free massage, but only the Golden Tulip offered me all inclusive full board. Let me explain what that means ( upon arrival, I did not even properly understand myself) Not only did we have 3 full meals included in the very reasonable price, we also had free alcoholic drinks on tap, along with 7 different choices of soda. Snacks ( cakes and pancakes) were being serve at all hours of the night, just in case someone did not stuff themselves properly during the scrumptious meals. The open bar was open 24 hours a day and trust me, the alchohal was flowing.

Throughout my entire stay I did not understand how the hotel could be profitable. They had a very advanced free game room equipped with play stations, Nintendo wii’s, foosball, internet, and all sorts of other entertaining programs and games for no entrance fee. There were enough games to keep 20-30 people busy. There were over 5 pools ( not including Yam Hamelach) They even had a casino party ( which we won of course) where prizes were given out to the person with the most money at the end of the allotted time ( I won some nice dead sea mud and salts)
Being as I always look for deals, I had purchased our hotel stay at an excellent rate. Only when I went to the hotel’s spa did I fully understand how the hotel could offer such lavish amenities. The hotel was equipped with 40 “health rooms” to be used by masseuses and beauticians. When my wife went to schedule an appointment, she was told that everything was booked up and was given a time in the future ( later that day) that she could set up an appointment.

I quickly did the math ( they are charging 180 for a 30 min massage and 270 for a one hour) I figured they could easily be clearing close to 10,000 nis per hour on the spa alone! I am sure their costs are not that significant (the dead sea mud is located about 30 feet from the hotel) The spa is open for at least 12 hours a day ( 10,000 x 12 = 120,000 NIS)

Now that’s a smart business model. If you build it, and offer free food, THEY WILL COME!!

Customer Retention

While watching The Office (TV Show) I recalled a sales tactic I had previously blogged about. This sales term when translated from English to Hebrew somehow gets lost in translation. The sales term is customer retention…

Let me explain.

In the TV show The Office ( shown on NBC) Ryan ( the temp working in a sales office) was quizzing Michael Scott ( the boss) on commonly known business terms and tactics. He asked Michael “which is more cost effective to sign up a new client, or to retain a current one.” To which Michael Scott answers, “ um, neither - it a trick question.”
Ryan responds “ To keep an existing client is 10 times more cost effective than signing up a new one.”

A few weeks ago I broke away from Israel’s greatest telecommunications tyrant. I discontinued my services with Orange (Partner communications). Even though I still have 2 years left on my contract with them, I decided to cut my losses and I notified them that I would not be using their services. Orange told me that there would be all sorts of insane penalties for “breaking their contract”. Even after being made aware of the penalties I still wanted to cancel. Simply put, I was tired of being taken advantage of. After hours of fighting, they told me to hold off canceling for a bit. They would have someone from customer retention speak with me to see if they could keep me as a customer.

Being a telesales professional, I have to admit that I was a bit excited to speak with this sales magician. In my personal case, where someone is willing to pay insane amounts of money in order to leave Orange telecommunications death grip there is little you can do. What could Orange possibly have up their sleeve? What could this retention agent possibly do to morph me back into a satisfied customer?

I asked Orange how long it would be until I receive a call from this customer retention magician. She replied, “It will take between 24 - 48 hours until they will contact you.” Now that threw me off a bit, are there that many people looking to cancel their accounts that Orange needs to wait two full days? I forgot about this concerning matter with hopes that this “agent” would have some special potion that would make things all better.

I doubted anything could be done as Orange had already done the despicable. Orange decided to increase my bill 18.75% without notifying me. I was routinely checking over my bill and noticed that the bill had been significantly higher then any previous bills. I called them up to complain, but was met with a simple, “ True we changed your fee rate, but the plan you had was too cheap - we had no choice”. After fighting with them for days it was clear to me that I would not be getting my old plan back and this new more expensive plan was my only option.

That’s how I got myself into this whole migela. Of all the people in the world to take advantage of, Zev Hecht is not one of them. Getting back to the story at hand, I am sitting - waiting - holding my breath for Orange to get back to me…

Meanwhile, I contact Cellcom to find out what kind of a plan they can offer. After 96 hours of waiting Orange responds with their “counter offer” in order to keep me as a client. They offer me a plan that is actually more expensive than my current plan. But that’s not all, in order for me to take this more expensive plan, I would actually have to sign a new 3 year contract with Orange. After explaining to their retention department that the current plan I had was actually cheaper than their “ special plan” they seemed downright stumped. They ridiculed the other providers, explain to me that only they could give me proper service. They even threatened me.
I switched to Cellcom a week ago and have been happy since.

Apparently in Israel - signing on a new customer and keeping an old one, well who cares. Lets just eat some shwarma…

Giving man the choice...

Any successful salesman knows that a prospective client must have the opportunity of choice in order for the salesmen to properly close a quick sale.

Let me explain...

By creating the option of choice, a prospective customer feels that he or she is actually making an educated decision based on mental calculations. The customer pushes aside any possible inkling of doubt and happily welcomes the prospect of buying a product that they don't actually need.

This false sense of choice is given to customers on a per minute basis. Choice has become such a lucrative business tactic that every possible product is now offered in different sizes, colors, shapes, and smells. When someone goes to the bathroom in Israel, they actually have the choice of the "big flush" or the "small flush". I personally find myself purchasing medium sized spice containers to be used for a recipe that I make approximately once every 20 years. Even as I am walking out of the store I am reassuring myself that the small was too small, and the large was simply too large. All the while this particular spice company has made another shekel on my purchase.

I recently added this common sales tactic into the everyday operation of one of my call center projects. Ever since the project was outsourced to IOC Israel we have been charging all sorts of different fees in order to "mask" the fact that the diverse programs we are offering are super expensive. Even though the program is VERY much worth it, the price alone deters the majority of possible customers. After months of sales I decided to implement the option of choice to our prospective clients. I now offer customers a "cheaper" program that in actuality is significantly cheaper than our original price. ( I make less should someone take this option) along the same plot line, I also added two other purchasing options. One that was even more ludicrously expensive, and the other that was just slightly more expensive than our original asking price.

Interestingly enough, having the option of paying less ( in order to convince people to pay more) worked! Not even one customer has taken the cheaper plan. Majority of our customers now take the middle plan which is just slightly more expensive and therefore more profitable for my office. There are even customers who boast, "Money is no object to me, give me the best and the most expensive". I happily do!

On your next trip to the store, be eccentric. Ask for the smallest sized shampoo. Smile to yourself knowing that no one can trick you into doing anything you don't want to do...

Toddler beds etc…

I understand the market strategy to sell children’s versions of adult necessities. In an effort to create lucrative markets, businesses billionaires have convinced us that our children need miniature versions of adult products.

My son has a mini stroller for his teddy bear Ahris. He has little shoes just like the Steve maddens I had in 12th grade ( His were actually more expensive!) he wears the same Fox sweater that I have ( I am a size X X large – but more on that in a different post) and now, my eldest son Donniel’s newest advancement the “toddler bed”

It all started earlier this week when my son decided that he did not want to go to sleep. He jumped out of his crib, opened his door, walked down the stairs, and surprised Etana ( my wonderful wife) and myself in the kitchen with a HUGE smile. We sang him Shema and put him back in the crib. After a few minutes of calm and quiet he climbed out again. He was not going to sleep.

What did parents do before the Sealy mattress? Did Toddlers have smaller tents in which they slept on shorter bails of hay? What did parents spend all their money on if not miniature versions of things that even the parents don’t really need.

Well, I caved. We searched online but the price of a toddler bed was more expensive than an adult bed ( no surprise there). Luckily my in-laws know someone who had triplets and therefore have they have 3 toddler beds gathering dust in the house, With my Father in Laws help we received the bed two days ago. He still won’t sleep on it, but at least now I can sleep at night knowing that I have fulfilled my job as a parent and gotten my eldest son a miniature version of my bed.

“A strong offense is a good defense.”

My basketball coach in 12th grade told me that line, and at the time I was naive enough not to question it. We had a terrible defense, and I think he was saying it just to make us feel better.

Here in Israel the meaning of that slogans somehow got lost in translation. In Hebrew its translated to, “ bad customer service means you can charge whatever you want whenever you want”

Let me explain – I got my phone bill last night, and naturally, being the good Samaritan that I am, I paid it on time. I threw the bill somewhere to be looked at “in the future just in case”. Weird thing happened today, I saw the bill and was interested enough to check it over. “That’s weird” I thought to myself. I have a 35 nis charge for reconnecting my Bezek line, and a 55 nis charge from 013 Barak for long distance calls.

Being as my phone was never disconnected, I had no idea why I would be charged for Bezek reconnecting my line. Similarly I have a VOIP line in my home, and therefore would never use 013 for long distance calls ( not to mention the fact that I am not a customer of 013.)

I put on my investigative hat and called up Bezek…
“I am sorry, you are being charged for the reconnection of your line because it was disconnected for 12 days and we had to reconnect it for you”
Hmm.. Wouldn’t I notice not having a house line for nearly 2 weeks?
I pushed her a bit and she refunded me the money that I was wrongfully charged. I asked about the 013 charges for long distance.
“ I am sorry, we are simply forwarding the bill that 013 is charging us for you long distance calls. You need to take up your issues with them”
I called up 013 Barak
“ I am sorry I see here one hour of calls made to Texas and Montana” If only I had actually known someone in Texas or Montana then this whole little scam would be plausible ( still not actually believable though... )
013 refused to help me ( no surprise there) They refused to let me speak to a manager or anyone who had any authority greater then a speaking peanut with bi-focals.

This whole episode got me thinking… could they be putting on a strong offense to show that they have no defense? Do they purposely just make up charges in order to increase their profit margins? Is there anyone else who feels like the supermarket is purposely charging you more for the items at the checkout register then what was clearly written as the price in the shopping isles? It may be lying and it may be out right dishonest, but for some its not a bad sales strategy. No one really pays attention anymore. We just hand over our charge cards similar to the way blind men do when receiving their paycheck in cash “I guess this makes sense”.

There has got to be a better way…

New business term - Confusing marketing.

As an adolescent I misunderstood marketing. I thought that the purpose of a sale was to create excitement over a product. I was told that the value of a sale was to increase sales…

Either I got everything wrong, or things work differently here in Israel.

Let me explain…

I walked into an “Israeli” clothing store hoping to buy myself a new rain coat. I saw all kinds of flashy signs trying to pull my attention to the clearance and sales items. Naturally my first stop was for the sales racks. I began to check over all the wonderful items that were on sale. I picked out 2 things that I thought would fit me nicely, and glanced over at the sales sign hoping that it would better explain the pricing structure of these “on sale” items. “buy 2 pants and 3 pairs of socks – and get an umbrella free” What does that mean? I could use some pants, but I have no need for socks or an umbrella…

I decide to disregard the entire sales rack and I ventured off to find a normal sale that might suit my needs. In my moment of clear headedness I spotted the coat rack. Being as I had came into the store for a coat, it made sense to me to at least go over and try some on. The sale was “buy 2 coats, get 2 coats free”

Now what does that mean… If I buy 2 coats, I will be getting 2 coats free? Would the 2 original coats retroactively become free? If I do buy 2 coats, will receive an additional 2 coats free? Or does it mean that if I buy 4 coats the next 4 are free? Who needs 2 coats? or an even better question, who needs 4 coats? I just need the one coat…

I went to the register to ask for an explanation about the sale. I asked what the price was for just one coat. She told me “no reason to buy just buy one, read the sign, you need to buy 4…

I miss the days when sales were simple… 40% off clearance sticker price – great - do you accept credit cards???

What is the next wave of billionaire businessmen currently thinking?

Every successful businessman at some point has had the same thoughts running through their minds. "How can I make more money, How can I keep my current amassed wealth?"

In the past generation if you met someone who I like to describe as "super wealthy" it would be a good bet to assume that either this person inherited their good fortune, or they created it by knowing how to "buy low and sell high". It feels as if things in the business world may have changed. With the crash of the housing market, the current dollar fluctuations, and the uncertainty of the stock market, it has become significantly harder to point out "Super wealthy".

I remember at an earlier period in my life it was easily distinguishable who was wealthy, or at least who wanted to be perceived as "well off". It all started with those lucky individuals who had cell phones, then those who had newer versions of cell phones, then palm pilots, then Blackberrys. Now- well, now it’s those who have private jets. With multi billion dollar ponzi schemes afloat and rampant home foreclosures even those with "private jets" are feeling the crunch.

So now, getting back to the age old question, "How can I make more money, how can I keep my current amassed wealth"? The answer is simple. A successful businessman must ensure the highest level of professionalism throughout his/her entire staff. But how is that possible in a market where everything is outsourced, and everyone is looking to cut corners to meet strict deadlines.

To answer that question, I would like to revisit a realization that came to me only a few years ago. I was at the time working as Director of New Business Development in a mid sized international shipping company. It was the end of the week and I had been cold calling potential clients for the past few days in order to bring new business to my company. My phone started ringing with hopes that it was a prospective client, I decided to push off the weekend just another bit, and answer the phoneTo my surprise it was a not native English speaker trying to sell me some b2b product. Even though I myself was currently employed to do cold calls, I hung up the phone after I discovered that he was indeed cold calling me. I was actually disgusted. I thought, " It is so close to the weekend, don't these people have any respect".

It was then that it hit me. My realization was simply, how did I plan on being successful cold calling companies if I myself just received a cold call and my first impulse was to slam the phone down! From that day on I thought there had to be a better way.

Getting back to our question at hand, everyday we ask ourselves "How can I make more money, how can I keep my current amassed wealth". What’s my answer? Simply put, the answer is a country created by the United Nations in 1948. A country that is considered to be the Jewish ideological state and at the same time the Jewish homeland. By outsourcing to Israel any business can “cut the corners” and not lose any level of quality or professionalism.

The varied international demographic composition in Israel allows it to offer businesses qualified native language speakers for any possible business need. The trend of outsourcing has been pushing India, Philippines, Brazil, and many other third world countries. Customers are getting tired of being hassled by phone calls made by heavily accented callers. They call during dinner, they call on Sunday, and they sound unfamiliar.

It’s been a few years since since I moved to Israel but I have been building my dream ever since. I live in Israel which is a unique land not only for Jews, but also for anyone looking for the highest level of professionalism at off-shore costs. It is no surprise that Israel proudly holds the award for greatest higher education to civilian ratio. With the recent influx of immigrant populations coming from North America, Europe, and Russia, Israel has become an ideal outsource location.

My company IOC Israel is just one of the many call centers located in Israel. I can only speak about my staff, but I know that we can be ranked amongst the best in the world.Israel is shaping up to be a serious contender for world’s next provider of quality telemarketing and sales.
In closing, to answer the question the next wave of successful businessman are trying to find ways to “cut the corners" but still remain just as professional.

Contact me today with any questions you might have.
Info@iocisrael.com
http://www.iocisrael.com/