There is a vital lesson buried in the August 19, 2009 Jet Blue announcement that they were suspending sales of the $599.00 “All You Can Jet” promotion they’d debuted only seven days before. Any student of Behavioral Economics could have predicted that an “all you can eat” approach would inspire vastly different behavior than if Jet Blue had charged a lower fixed fee plus $1 per mile. Similarly, over a decade ago when AOL switched to a usage-independent flat price, connection time increased four times more than they anticipated.

“All you can eat” is an entirely different price than “very, very cheap.”

Traditional economics says that lowering the marginal price from $2 to $1 should have a similar effect to lowering it from $1 to $0 — but experience and experiments have both shown that the traditional demand curve acts in an odd manner when we reach $0 marginal cost. Jet Blue’s executives should have known better. But the Jet Blue management team is not alone.

Many executives assume their customers are more rational than they really are. For example, most leaders believe in enhancing the options given to customers, but increased choice can actually freeze decision-making by overwhelming the shopper. Excessive options is a key reason that an average of 60% of all online shoppers abandon their purchases mid-stream.

Small business owners and entrepreneurs like to jump right in and get started, which is crucial to success, but it’s also important to prepare and plan and set objectives, especially when it comes to email marketing. When you’re getting started with email marketing make sure you step back and think through what you’re trying to accomplish. The best way to do this is to try and see things through your customer’s eyes.

Last month, I gave a talk on “Surviving and Thriving in Real Estate” to about 200 people. I went around the room and met about 50 people before I spoke. I asked, “If you were giving today’s talk, what would you say?” I got eight great ideas and shared them with the audience. I showed them: If you’re working, you already know what works.

Outsourcing has received a bad rap in some circles because of its association with job losses that occur when corporations “export” jobs to countries with much lower labor costs than the U.S. But those of us who run small and home businesses have a different perspective on outsourcing. For us, outsourcing is the “secret sauce” that lets us pull together the resources to handle temporary work overloads, reduce fixed costs, speed products to market, simplify distribution, provide more or better service to our customers, and compete with our deeper-pocketed competitors.

It’s a shame that most of you will only meet Marcia through the printed or electronic page because her enthusiasm and energy are contagious. Being a multi-mistake-maker myself, the first thing I said to Marcia was “I bet you have a long line of small businesses who want to be in your column.” When Marcia told me that she literally had to beg companies to share their ‘Biggest Mistake’ I couldn’t believe it…

Before TMZ released the infamous tape of a foul-mouthed Christian Bale on the set of Terminator 4, our Batman hero had played Patrick Bateman, just your everyday serial killer in the film American Psycho. Say what you will about the story’s controversial message, the scene in which Patrick Bateman proudly displays his new business card is simply classic. (“Oh my god, it even has a watermark.”) There are, thankfully, more savvy professionals today advising their colleagues and clients to run, not walk, to LinkedIn. This portal is revolutionizing networks for American small businesses. How…

Q: Help! I own a small consultancy business. A new client e-mailed me a few days ago but the message ended up in my spam folder, as did her follow-up. Now she won’t return my calls. How can I get her back? — Aaron
A: You probably can’t.
The new client concluded, fairly or unfairly (but fairly, I think) that if things are going wrong already, at the start of your working relationship, it does not bode well for work down the road.
But I suggest that a bigger issue is at play, …

The recession is putting hundreds of thousands of people out of work each month — 522,000 from companies of all sizes and 175,000 from small businesses, specifically, for January, according to ADP’s employment latest report.
Given these massive losses and a bleak job market, industry forecasters say they expect to see more people turning to self-employment. But who says you have to go it alone? Partnering is a viable option, whether you’re looking to start a new venture or, perhaps, bring someone on-board what you already have under way. This article …

Consumer confidence is at an historic low and the financial news seems to get worse by the day. With a new Administration in Washington, there’s a lot of uncertainty about exactly how and when promised changes will take place.
But even if your business is struggling, you can take steps to turn it around and be poised to grow this year, says Paul Rauseo, managing director at the George S. May International, a Chicago consulting firm. Practical tips from Rauseo and other small business experts follow….more atTurning Around a Struggling Business …

Companies too often hinder their own success by focusing too narrowly on selling products and not on what their customers actually need, says Dev Patnaik, a business strategist. Businesses could be more successful — and see competitive opportunities faster than their rivals — if they looked differently at what they were doing.
Mr. Patnaik, founder and chief executive of Jump Associates, a firm in San Mateo, Calif., that advises companies on growth strategies, and a part-time professor at Stanford, has written a book, Wired to Care: How Companies Prosper When They …