Cost Per Wow

The Right Moment is Everything

Folks in the tech startup scene are always trying to gather a big audience. Then they get really frustrated when they try to make money off of that audience - and find it to be very difficult.

Their problem is. What do you know about someone who is throwing a sheep? Or playing a game? Or tweeting? The problem is. You don’t know shit about them.

These aren’t the prospects you want. The prospects you want:

• Have money to spend
• Have a problem to solve. A problem big enough to make them spend that money.
• Are equipped to give you money right now, and receive your product (which solves their problem). Right now.

Building up an audience that doesn’t have these traits is fine and dandy if you’ve got millions of dollars in the bank to do some Biz Dev down the road. Bully for you.

So, how do you capture these prospects who have a problem. And money. And have them both right now?

In the internet, I can’t think of any better place than search. In the physical world, well - think about it. There’s a reason you set up your first lemonade stand on a hot day.

How do you capture your prospects at The Right Moment?

How to Get E-mail Addresses - Benihana

My family - who lives somewhere other than where I do - recently went to Benihana’s for my brother’s birthday. My mother sent me an invite to view photos of their night out. To view the photos, I have to enter in my e-mail address.

Do you think I’m going to let a little bit of spam get in my way of seeing family photos? Nope.

Psychology Hacks of Dave & Buster’s

Traditionally, arcades have had to rely on the psychology wrapped into the games themselves to drive profits. But Dave & Buster’s has turned their entire experience into a game that keeps customers spending; and their innovation all revolves around how customers pay for games.

Dave & Buster’s has taken arcade payment to a whole new level with their card system. Here’s essentially how it works: You can’t play any games at all if you don’t have a card. Cards are sold at kiosks, and accept credit cards, which of course makes it easier to spend.

From a conversion standpoint, the kiosk interfaces are very well-designed. Customers are first presented with three dollar amounts that they can fill their cards with, and the minimum amount presented is a hefty $25 - which is a lot of video games.

If you go refuse the recommended amounts, those recommended amounts are highlighted even further on the next screen, with even larger amounts presented as well. Since you’ve already been presented with $25 as the minimum on the previous screen, the $20 option doesn’t look that bad, even though you may have walked up to the machine thinking you’d spend $5.

Once you select a dollar amount, you’re instantly upsold. You’ve already committed to buying some chips, so what’s it hurt to buy a few more? (This is utilizing the foot-in-the-door technique.) It’s a better value, and if you press “no” you’ll miss out on your chance. (This takes advantage of scarcity).”

If you still refuse the up-sell offer, there is yet another smaller up-sell. Notice the powerful language. Supercharge. Yes! Just. More. Contrasting with the bland “No, Thanks” button.

When you’re all done buying your card, you get a real, hefty piece of plastic, just like a credit card. This removes you from the reality of the money you’re spending.

When you go to play games, the values of a game play are very abstract. It turns out that 6.3 “chips” equals about $1.30 on a $10 chip purchase. Also notice that if you play enough chips to get a “Gold” card (1200), you’ll get 10% off all of your games, which is one good reason to keep your card in your wallet - where it will stare at you for years. Another is that the prices of playing games are very unusual so as to leave odd but useless amounts remaining on the card (I now have .7 credits on my card), giving you reasonable cause to come back another time and recharge the card.

Of course the lamest part of any arcade experience is the useless prizes you can redeem the tickets you win for. Not everybody likes stuffed crocodiles. But everybody loves music! This machine will turn your tickets into music purchases, and burn them onto a CD - and you can even hook up your iPod.

As you can see, Dave & Buster’s card payment system ropes their customers into a sophisticated framework that keeps them spending on games. The amazing thing is, they almost didn’t switch to cards.

Design Doesn’t Matter

Anyone who enjoys Asian cuisine recognizes this bottle. It’s Sriracha Thai hot sauce, and it’s good stuff. The design on the bottle is naive at best: a hodgepodge of Asian characters, cartoonish Roman characters, starbursts, and - famously - a Cock emblazoned upon the front. It’s design that any design student worth their salt would likely ridicule. No doubt including the 8 years ago version of me.

But it’s perfect. You recognize this bottle. If you like spicy food, the mere sight of it probably makes your mouth - and eyes - water. The product is of such high quality as to be ubiquitous. And of such ubiquity as to elicit a Pavlovian response.

Sometimes, design doesn’t matter.

Opinions Don’t Matter

The problem that many organizations have is that there are too many people. And people have opinions. And most opinions. Don’t matter.

Should we make the button red or blue? Should it be shiny, matte, or flat? Should our mission statement be “to make the finest products on earth,” or “to make the earth’s finest products.” It doesn’t matter.

That’s not to say that the color or texture of a button can’t make a multi-million dollar difference to a company. But most of the time it won’t. Most people can’t seem to recognize the difference. They make big issues out of unimportant things, and ignore the things that are important.

With every decision there is a potential payoff. If the button in question is on a non goal-oriented page - with 100 visitors a month - in a product that customers aren’t paying you for, the payoff is low. If your designer makes a button for that page that doesn’t flagrantly violate a branding standard, then approve the button and STFU. Work on getting some customers to pay you for that product. Why do you already have branding standards, anyway?

If the button is on a page with millions and millions of views, with a goal that has an actual dollar value tied to it (Groupon comes to mind), then iterate the hell out of that button.

But while you’re iterating, be conscious of the structure of your thinking. What are the assumptions you are making about your customers? What, on the other hand, do you know about your customers? What are the assumptions you are making about what will motivate them? The facts are just those - the facts. The assumptions are also known as hypotheses - test them when possible.

Most decisions aren’t going to take an organization down. Most decisions aren’t going to make any difference in your company’s bottom line. What will ruin your bottom line is inaction. Friction. When you reduce friction. Things. Get. Done.

SEO is the new “location, location, location”

Folks on the tech scene talk about product a lot. But sometimes product isn’t nearly as important as distribution. The caveat is that sometimes great product is distribution.

You’ve heard the old adage “location, location, location.” This bit of wisdom illuminates the fact that distribution is every bit as important as product. If you have a restaurant on a busy street corner with lots of foot traffic, people will eat there, no matter how much your food sucks. To stay in business, it helps if your food is good, but it’s not required.

It’s surprising how many companies don’t transfer this knowledge to the web. The title tag of their website will say “welcome to CompanyX,” rather than “widgets, keyword widgets.” They only need to type a few widget keyphrases into the Google keyword tool to figure out where all the “foot traffic” is.

Of course, traffic doesn’t always equal business, depending on your product. If you sell college textbooks, you probably won’t do well in even the most busy part of a retirement community. You might want to locate on or near a college campus. Foot traffic is better than golf cart traffic in this case.

Sometimes you have to capture your customers at the right moment in their life. You can do this with the right keywords.

So, 1) do your keyword research, and 2) use SEO best practices.

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Photo from mtarlock

You Aren’t Google or Apple

I see lots of companies trying to copy the design of Google or Apple when designing their home page; and this is usually misguided. To understand why, you need to understand the factors behind their design.

On one end of the spectrum, some companies say to themselves “we want our site to look like Apple’s. A really compelling image about our product, with a short explanation right up front.” They expect to impress their customer this way, and while this can actually help, it’s best to evaluate your own customers, objectives, and offerings to be sure this approach is right. Here’s some of the factors behind the design of the Apple home page.

Apple

• Sexy product. The the product is really huge on the home page. Your product is probably not as sexy as Apple’s, so it probably doesn’t need to be as prominent. Can your customer really attach your product to their identity the way they can with an Apple product? Is this even feasible? Probably not, so there’s no way “large-image-plus-explanatory-copy” should take up as much space on your home page as it does on Apple’s.
• Physical product. The sexy Apple splash is a good lead-in to introductory information about the product. Their customers can watch videos about their products that further showcase their great design, while explaining features.
• Consumer audience. This is more about fashion than it is about saving money, or increasing Q4 revenue.
• Narrow objectives & interaction pool. Sure, Apple has lots of products, but they’re usually only going to be pushing a few at a time - whatever’s newest. And they pretty much want you to do one thing. Buy them.

On the other end of the spectrum are companies who want their home page to be more like Google. “Just really simple, with one interface element.” This clearly works well for Google, but here’s why:

Google

• Familiar user task. When Google came on the scene, everyone already knew how to use a search engine. It needed no introduction. Just type and hit search.
• Repetitive use -> layering of interaction. many people use a search engine dozens of times a day, so this allows Google to “hide” many of its features. You know exactly what to do with the first time you use it, but over time you learn that you can use it to find movie showtimes ( movies 60614 ), convert units ( 300 inches in miles ), or search within a domain ( site:kadavy.net life hacks ). Though Google and Apple have drastically different home pages, here is where they are similar. Think of all of the functionality they cram into one little button on an iPod.
• Limited user flows. What do you go to Google for? To search. Not so much to browse, or to see what’s up with your friends, or to buy things. This simplicity is reflected in its appropriate interface.

Does this mean you can’t learn anything from Google or Apple when designing your home page? God no. You can learn plenty, as long as you think about the why, and not the what.

Zappos CEO Tony Hsieh at SXSW 2009

“We run our warehouse 24 hours a day, even though that isn’t the most efficient way to run a warehouse…when a customer orders some shoes, and they show up on their doorstep 8 hours later, that really *wows* them.”

“We only show items on our website that are physically present in our warehouse.”

“We don’t have scripts, we don’t upsell, and we don’t have call times.”

“Spend as much time on the phone as it takes to *wow* the customer. Our longest call time in our history is 4 hours.”

“Every rep is trained, if an item is out of stock, to direct the customer to a site that does have it.”

“We have passed on alot of really talented people…if they aren’t good for our culture.”

“Performance reviews are 30% based on contribution to culture.”

“If you’re an accountant or lawyer…you go through the same training as the people in our call center.”

“At the end of the 1st week of training, we will pay you for the time you’ve spent training, plus $2000 - if you want to leave Zappos.” (starting pay for call center rep is $11/hr). “We keep increasing the offer, because we don’t feel enough people are taking it” (3%)

“We now have a Twitter class as part of the new hire orientation…You can see all of our employees Tweets at http://twitter.zappos.com”

They had a customer that bought a wallet, returned it, and decided she didn’t like it. However, she left $150 in the wallet. One of the warehouse workers sent the cash back to her with a letter. The warehouse worker could have easily pocketed the money and nobody would have known ($150 is significant money to a warehouse worker), but this shows what our culture is right.

“We want to own the three C’s: clothing, customer service, and culture.”

“Zappos is happiness in a box” -Zappos customer

“Committable core values: willing to hire & fire based on these values.”

“We don’t have a brand or positioning document.”

When a reporter comes to the company, rather than only having a few “official” people to talk to, they are allowed to wander around and talk to anyone they wish. Zappos isn’t afraid of what a particular employee might say.

“Take as much as you’d like”

That’s what the Southwest flight attendant said as he offered me bags of peanuts. People will naturally police themselves, only taking 1 or 2 bags (I took two), but the offer to “take as much as you like” pays dividends in customer experience.

P.S. This is written from a Southwest plane - yes, this plane has WiFi (Skype & the like thankfully blocked).

120,000

120,000 Twitter users have 500 followers or more. Twitter is growing exponentially. What do you want them to say about your product?