Design Your Customers’ Decisions

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.

Read more at Design Your Customers’ Decisions – Harvard Business Publishing, 26 Aug 2009

Flickr photo credit: pawpaw67

By |2012-01-05T06:58:54+01:00August 27, 2009|Blog, Marketing|0 Comments

101 Tips for Getting Started with Email Marketing

Sometimes it seems like EVERY business in America is using an email marketing service – but there are tons of small businesses (more than half – see below) who either do not use one or need to drastically refresh their email marketing activities – beyond just the occasional random email they shoot out to their lists.

Campaigner has just launched a new series of “101 Tips for Getting Started with Email Marketing” to help companies create and execute an effective email marketing strategy. You can sign up to receive a few tips each week via email, or read them as they are posted on Campaigner’s website at http://www.campaigner.com/lp/101tips.aspx

The tips will focus on a different theme each quarter of 2009, starting with Building a Strong Email Marketing Foundation. Here are the first five…more at 101 Tips for Getting Started with Email Marketing – SmallBizTechnology.com, published 29 March 2009.

Flickr photo credit: Esparta

By |2012-01-05T07:15:25+01:00March 30, 2009|Blog, Online Marketing|0 Comments

6 Steps to Better Business Solutions

Learn to think like a business consultant and turn your experience into expertise.

Physician, heal thyself is good advice if you run a small business. You already know how to fix the problems in your business, and you know how to grow from those problems.

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.

Your experience is more valuable than the expertise of a dozen MBAs and Ph.Ds. Your experience becomes expertise when you look squarely at your problems and create solutions. You just need to know how to think like your own consultant.

Fix Your Business

Follow six steps to think like a consultant and fix your business. …more at 6 Steps to Better Business Solutions – Entrepreneur.com, published 26 March 2009

Flickr photo credit: Ms Photo

By |2012-01-05T06:45:30+01:00March 30, 2009|Administration & Finance, Blog|0 Comments
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