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…
Friday, February 27, 2009
Friday, February 20, 2009
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?!
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?!
Wednesday, February 18, 2009
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.
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.
Thursday, February 5, 2009
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.Let me explain.
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.
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.
Sunday, February 1, 2009
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.
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).
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.
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