Fortune 400 list makers include people in oil (which really seems cool, but think about how uncool it is too), lumber, as well as real estate, hedge funds etc. A while back I listened to the audio book "All the Money in the World: How the Forbes 400 Make--and Spend--Their Fortunes" by Peter W. Bernstein. He details the myriad ways that the richest among us make and spend their cash.
Since listening to this (and before too) I would often look at the variety of shops as my wife and I drive down business districts in local towns and I gawk at the assortment of businesses in each town (yet another way I overwhelm her that this blog might ease).
More recently I have been thinking that in order to make money, you either have to improve many people's lives in a small way, or improve several people's lives in a very profound way. There are only a few out there who touch many people's lives in a profound way. I've noticed that those who manage this usually do it in a nearly imperceptible, but ubiquitous way. They often are not the inventors of a technology, but bring it to the masses packaged in a convenient, predictable way. Examples are all around us. Some well known, others obscure:
German brothers Wilhelm and Georg Shaeffler developed a new way to make ball bearings and grew the company they founded in 1946 to be one of the worlds largest manufacturers of ball bearings making loads of cash in the process. Tiny balls helping billions of people (drawers, cars, wheels...lets just leave it at that. If you use anything with wheels, you've probably used several of their tiny balls).
Ray Croc--you may not agree with McDonalds, but you probably have heard the story of how he brought burgers to the masses. In fact, you've probably had one of his burgers. He didn't invent the burger or McDonalds. He just brought it to the world helping you fill your hunger in a convenient (drive through, short wait), predictable (same every time--same amount, same size, same cooking procedure delivered by a 16 year old exactly the same every time) way.
I recently heard a local story of Harold E. LeMay of Tacoma, WA. I had previously noticed that we use LeMay Recycling at work and heard that we were saving bundles over the previous company we used...and it was more convenient (there's that word again) too. I had also seen the Lemay America's Car Museum as we drive down I-5 in Tacoma (more on crazy ways to spend your millions in another post). I learned his story from one of my patients.
Out of high school, Harold partnered in an automotive business. As my patient put it, one day he won a garbage truck in a car auction. He had trouble selling it, so he looked into the trash collection business. He began Spanaway Garbage Collection Company with one truck. Soon he had more trash than he could handle so he bought another truck. The rest is history. His company became Harold LeMay Enterprises after WW II. He also owned Lucky Towing, HELM Trucking, Lucky Sales and Services and the list goes on. While building his empire on garbage, he also gathered the world's largest collection of autos, motorcycles, trucks and other vehicles and memorabilia (over 3,000 vehicles). Each summer Harold and his wife Nancy would open their estate for the annual LeMay Car Show. After his death most of his vehicles were donated to Tacoma for the museum.
In 1991 he was elected to the National Solid Waste Association Hall of Fame (who knew that existed!?)
In 2011 Harold and Nancy LeMay were inducted into the Washington State Hot Rod Hall of Fame
The moral of the story is threefold:
1. Sometimes your fortune is right under your nose. You just have to see it and seize it. See Acres of Diamonds by Russell Conwell
2. You build your fortune on your failures. Lemay could not sell that truck. If someone else had bought it, it could have been the Someone Else America's Car Museum.
3. Before you can get inducted into the "Hall of Awesome", you have to wade through the "Hall of Garbage" and help out millions of people in a very profound way. Before you can collect cars, you have to collect heaps and heaps of garbage. Imagine a nation without garbage collection and recycling services.
Tuesday, September 1, 2015
Friday, August 28, 2015
Your Customers Are Not You
I've been doing a lot of research on advertising and marketing. In the process a friend of mine from LDS Business College's Self Reliance "Starting and Growing My Business" class suggested I take a "free advertising class" and take a close look at all the mail that comes to my house and dissect the strategies of the advertisers that have targeted me.
What are they doing well?
Which pieces of mail am I likely to open?
Why am I drawn to some parcels and not to others?
Which mail do I look at right away and which go on "the stack"?
I have also been checking out the newspaper advertisements, billboards, TV ads, want ads, garage sale signs, other signs etc. There is an old phrase, "When the student is ready, the teacher will appear." I have learned much about good and bad advertising. One of the main principles is that your customer does not care about you. They do not think like you. They do not know what you know. They do not have the same needs, wants and desires as you. But if you can draw their attention and let them know that you can give them what they need, want and/or desire, you will never go hungry again!...I digress.
A graduate student named Elizabeth Newton at Stanford University performed a study in 1990 about tappers and listeners which I think applies. Try this at home!
Ms. Newton divided a group of human guinea pigs into two groups "tappers" and "listeners". She asked to tappers to choose a familiar song and tap out the rhythm on a table for the listeners to guess. Before the listeners guessed, she asked the tappers to predict the probability that the listeners would correctly guess their song. Out of 120 tapped songs, listeners guessed only three correctly (2.5%). Tappers had predicted a success rate of 50%.
Think of that! The tappers conveyed their message effectively 1/40 times, but guessed that they would convey their message 1/2 times! Does this every happen when we are marketing?
We hear the tune of how awesome our product or service is. We think about all the time and work we put into thinking of a name, a jingle, a meme. We think of all the ways we have made ourselves better than the competition. Then we tap out our message and the customer does not understand or care.
When we advertise we need to make sure that we are not being like the tappers. We should not play the message we have chosen. Instead we need to tune into the song our customers are tapping and fill those needs--not the needs we think they need filled, not our needs. Then we will be able to create simple, effective marketing strategies and campaigns that reverberate with our customers and highlight the ways our products and services meet their needs. Not what we think they should need, and especially not what we need or want.
If we play the game of tapping out our marketing message, we will likely have a success rate similar to Newton's tappers about 2.5%. If we instead tune into what our customers want. We will be tapping out a song they already hear and our success rate can be much higher than 50% with our target market.
Try the game this way. Have a listener hum a song, then begin tapping out that song on the table. See if the hummer can figure out what you are tapping. What do you think the success rate will be now? Let's play tappers and hummers. In this game everybody wins!
Now go figure out what your customers want and advertise that! Listen to them and they will hear and understand your message loud and clear!
Addendum: While I was in the processes of writing this post my (Italian) wife told me that McDonald's had run an ad in Italy stating that Italian kids like Happy Meals more than pizza. While this may be true, it's not a song that they want to hear!
Quiz: Recently in preparing an exercise class I heard some statistics that the class can help elderly people avoid falls. This is a measurable fact. We may even hear an old person say they don't want to fall and are fearful of falling (the class also decreases fear of falling). Should I run an ad that says "ATTENTION OLD PEOPLE: come to my exercise class so you can avoid falling!"?
No! That is not the song they are singing. If it is, it's not the song they want to hear. They don't want to be called old, they don't want to exercise and they don't want to be reminded that they might fall.
How 'bout this: "Mature adults come try this new class! You can stay independent and healthy while meeting new people!"
I'm sure you can come up with an even better message. Leave your comment below to improve the above advertisement!
What are they doing well?
Which pieces of mail am I likely to open?
Why am I drawn to some parcels and not to others?
Which mail do I look at right away and which go on "the stack"?
I have also been checking out the newspaper advertisements, billboards, TV ads, want ads, garage sale signs, other signs etc. There is an old phrase, "When the student is ready, the teacher will appear." I have learned much about good and bad advertising. One of the main principles is that your customer does not care about you. They do not think like you. They do not know what you know. They do not have the same needs, wants and desires as you. But if you can draw their attention and let them know that you can give them what they need, want and/or desire, you will never go hungry again!...I digress.
A graduate student named Elizabeth Newton at Stanford University performed a study in 1990 about tappers and listeners which I think applies. Try this at home!
Ms. Newton divided a group of human guinea pigs into two groups "tappers" and "listeners". She asked to tappers to choose a familiar song and tap out the rhythm on a table for the listeners to guess. Before the listeners guessed, she asked the tappers to predict the probability that the listeners would correctly guess their song. Out of 120 tapped songs, listeners guessed only three correctly (2.5%). Tappers had predicted a success rate of 50%.
Think of that! The tappers conveyed their message effectively 1/40 times, but guessed that they would convey their message 1/2 times! Does this every happen when we are marketing?
We hear the tune of how awesome our product or service is. We think about all the time and work we put into thinking of a name, a jingle, a meme. We think of all the ways we have made ourselves better than the competition. Then we tap out our message and the customer does not understand or care.
When we advertise we need to make sure that we are not being like the tappers. We should not play the message we have chosen. Instead we need to tune into the song our customers are tapping and fill those needs--not the needs we think they need filled, not our needs. Then we will be able to create simple, effective marketing strategies and campaigns that reverberate with our customers and highlight the ways our products and services meet their needs. Not what we think they should need, and especially not what we need or want.
If we play the game of tapping out our marketing message, we will likely have a success rate similar to Newton's tappers about 2.5%. If we instead tune into what our customers want. We will be tapping out a song they already hear and our success rate can be much higher than 50% with our target market.
Try the game this way. Have a listener hum a song, then begin tapping out that song on the table. See if the hummer can figure out what you are tapping. What do you think the success rate will be now? Let's play tappers and hummers. In this game everybody wins!
Now go figure out what your customers want and advertise that! Listen to them and they will hear and understand your message loud and clear!
Addendum: While I was in the processes of writing this post my (Italian) wife told me that McDonald's had run an ad in Italy stating that Italian kids like Happy Meals more than pizza. While this may be true, it's not a song that they want to hear!
Quiz: Recently in preparing an exercise class I heard some statistics that the class can help elderly people avoid falls. This is a measurable fact. We may even hear an old person say they don't want to fall and are fearful of falling (the class also decreases fear of falling). Should I run an ad that says "ATTENTION OLD PEOPLE: come to my exercise class so you can avoid falling!"?
No! That is not the song they are singing. If it is, it's not the song they want to hear. They don't want to be called old, they don't want to exercise and they don't want to be reminded that they might fall.
How 'bout this: "Mature adults come try this new class! You can stay independent and healthy while meeting new people!"
I'm sure you can come up with an even better message. Leave your comment below to improve the above advertisement!
Sunday, August 16, 2015
100 Things To Do On a Free Day
100 Things to do on a free day in no particular order, repeats allowed:
1. Pre school
2. Play with my kids
3. Science experiments
4. Take my wife on a shopping spree
5. Learn to fish
6. Go golfing
7. Fly to my brother's house and go golfing with him/them
8. Learn to fly an airplane
9. Learn to fly a helicopter
10. Sail
11. Learn Spanish
12. Learn Chinese
13. Read a fiction book
14. Read to my kids
15. Have my kids read to me
16. Rent/buy rollerblades and go rollerblading
17. Miniature golf
18. Cook lunch
19. Cook dinner
20. Do laundry...is that a free day thing...I don't get around to these things on other days-Support day?
21. Learn to Sail
22. Play the song Sail while sailing
23. Go sailing with my wife's grandmother and say "look I'm sailing...I sail"
24. Watch What About Bob on a boat even though I think I like it about as little as my wife's G-ma
25. Play guitar
26. Have my wife teach me to crochet
27. Go to the zoo
28. Go to the temple
29. Have a picnic
30. Fly to NC and play a board game with old friends (not old ones, but old ones you know?)
31. Learn to scuba dive
32. Plan a vacation for another free day (or is that a support day or delegate thing?)
33. Read
34. Sleep in
35. Breakfast in bed
36. Kiss my wife
37. Give my wife a massage
38. Get kissed by my wife
39. Go for a long walk
40. Eat cake
41. Go get a maple bar and a slurpee and figure out how to mail them to NC
42. Read the newspaper
43. Go to an estate sale
44. Go to an auction
45. Play football
46. Play soccer
47. Play basketball
48. Play volleyball on a real beach
49. Go to the beach with my kids
50. Build sandcastles
51. Lie on the beach
52. Learn to surf
53. Surf
54. Go someplace warm and exotic and surf
55. Go visit my cousin in NY and surf in cold water
56. Surf in the surf tee hee.
57. Visit a rainforest
58. Visit a national park
59. Visit a state park
60. Learn Dvorak (typing)
61. Lean Dvorak song on piano
62. Learn to play piano
63. Learn a piano concerto and duet with my wife and teach my oldest child a song on piano and invite people over for a concert with brownies
64. Make brownies with my son
65. Help my mother clean out her basement
66. Ride a horse
67. Ride my brother's horse
68. Golf
69. Eat delicious food
70. Eat delicious food in Italy
71. Hang glide
72. Climb cliffs
73. Go spelunking
74. Write a book
75. Do a crossword puzzle start to finish
76. Make a crossword puzzle with fun words like spelunking and galoshes
77. Write a song
78. Write a song and play and sing with guitar/piano with high school best friend
79. Eat Pringles
80. Go on a campout without pre-planning (prob with my kids) a la my high school self with two besties (not with my kids then..)
81. Row
82. Explore an island
83. Draw with sidewalk chalk
84. Golf with my Father-in-law and Brothers-in-law
85. Learn to fish
86. Shoot a gun
87. Get really good at archery
88. Take up fencing again
89. Poke someone with a sword (with safety gear)
90. Plan a bank heist scenario
91. Write an action novel with a bank heist scenario
92. Shoot the bull
93. Camp in a tee-pee
94. Make (have made) cowboy and Indian costumes and get laser tag equipment and play cowboys and Indians on real horseback
95. Before doing above research if laser tag equipment could harm horses. If so, do above with broomstick horses with kids instead of adults
96. Plan and act out zombie scenario for my brother-in-law's birthday
97. Watch Bones with my wife--all day
98. Pick a new show to watch with my wife
99. Play video games including retro ones
100. Watch old timey horrer movies with bro-in-law
Idea from Work Less, Make More: Stop Working So Hard and Create the Life You Really Want by Jennifer White
1. Pre school
2. Play with my kids
3. Science experiments
4. Take my wife on a shopping spree
5. Learn to fish
6. Go golfing
7. Fly to my brother's house and go golfing with him/them
8. Learn to fly an airplane
9. Learn to fly a helicopter
10. Sail
11. Learn Spanish
12. Learn Chinese
13. Read a fiction book
14. Read to my kids
15. Have my kids read to me
16. Rent/buy rollerblades and go rollerblading
17. Miniature golf
18. Cook lunch
19. Cook dinner
20. Do laundry...is that a free day thing...I don't get around to these things on other days-Support day?
21. Learn to Sail
22. Play the song Sail while sailing
23. Go sailing with my wife's grandmother and say "look I'm sailing...I sail"
24. Watch What About Bob on a boat even though I think I like it about as little as my wife's G-ma
25. Play guitar
26. Have my wife teach me to crochet
27. Go to the zoo
28. Go to the temple
29. Have a picnic
30. Fly to NC and play a board game with old friends (not old ones, but old ones you know?)
31. Learn to scuba dive
32. Plan a vacation for another free day (or is that a support day or delegate thing?)
33. Read
34. Sleep in
35. Breakfast in bed
36. Kiss my wife
37. Give my wife a massage
38. Get kissed by my wife
39. Go for a long walk
40. Eat cake
41. Go get a maple bar and a slurpee and figure out how to mail them to NC
42. Read the newspaper
43. Go to an estate sale
44. Go to an auction
45. Play football
46. Play soccer
47. Play basketball
48. Play volleyball on a real beach
49. Go to the beach with my kids
50. Build sandcastles
51. Lie on the beach
52. Learn to surf
53. Surf
54. Go someplace warm and exotic and surf
55. Go visit my cousin in NY and surf in cold water
56. Surf in the surf tee hee.
57. Visit a rainforest
58. Visit a national park
59. Visit a state park
60. Learn Dvorak (typing)
61. Lean Dvorak song on piano
62. Learn to play piano
63. Learn a piano concerto and duet with my wife and teach my oldest child a song on piano and invite people over for a concert with brownies
64. Make brownies with my son
65. Help my mother clean out her basement
66. Ride a horse
67. Ride my brother's horse
68. Golf
69. Eat delicious food
70. Eat delicious food in Italy
71. Hang glide
72. Climb cliffs
73. Go spelunking
74. Write a book
75. Do a crossword puzzle start to finish
76. Make a crossword puzzle with fun words like spelunking and galoshes
77. Write a song
78. Write a song and play and sing with guitar/piano with high school best friend
79. Eat Pringles
80. Go on a campout without pre-planning (prob with my kids) a la my high school self with two besties (not with my kids then..)
81. Row
82. Explore an island
83. Draw with sidewalk chalk
84. Golf with my Father-in-law and Brothers-in-law
85. Learn to fish
86. Shoot a gun
87. Get really good at archery
88. Take up fencing again
89. Poke someone with a sword (with safety gear)
90. Plan a bank heist scenario
91. Write an action novel with a bank heist scenario
92. Shoot the bull
93. Camp in a tee-pee
94. Make (have made) cowboy and Indian costumes and get laser tag equipment and play cowboys and Indians on real horseback
95. Before doing above research if laser tag equipment could harm horses. If so, do above with broomstick horses with kids instead of adults
96. Plan and act out zombie scenario for my brother-in-law's birthday
97. Watch Bones with my wife--all day
98. Pick a new show to watch with my wife
99. Play video games including retro ones
100. Watch old timey horrer movies with bro-in-law
Idea from Work Less, Make More: Stop Working So Hard and Create the Life You Really Want by Jennifer White
Friday, July 24, 2015
Today Matters--The Daily Dozen
I have developed the habit of listening to audiobooks on my commute. Since my commute is only about 20 minutes each way, I get less than an hour of "reading" in each day which usually is not enough time to finish a book in the 21 days I have before the library calls the audiobook due (I rent books on my smart phone from OverDrive). So I have gotten into the habit of listening while I do the dishes. This gives me extra listening time soI can finish a few books a month (somehow my wife and kids dirty a lot of dishes while I am at work:)). While I think this annoyed my wife at first because she was not always interested in my book, now I think she appreciates only having to do the dishes occasionally and has moved into the other room while I listen and clean. Now I only annoy her with conversations about the books...we can't win them all.
As an aside: according to Tom Corley http://richhabits.net/?s=read+non+fiction 63% of wealthy people listen to audio books during commute to work vs. 5% for poor people... I must be one of the 5% :) I wonder if when I become wealthy I'll pull the wealthy up to 64% and the poor people will drop to 4%...
I recently finished listening to a book Today Matters: 12 Daily Practices to Guarantee Tomorrow's Success by John C. Maxwell. I really liked how he discussed how each practice affected him in each decade of his life. This sort of showed me a timeline of how practicing each of his "Daily Dozen" principles could affect my life if I start living them now. As a physical therapist I recognize how small changes in behavior can make large changes over time, but it's easy to give up before you see the fruits of your labor. Almost like a farmer giving up on his seeds because he doesn't see them germinating underground. Many times it takes a long time to see progress and it can be difficult to recognize the progress as it comes slowly. I often tell my patients that they may not notice the changes just like a child cannot see their growth in height day by day, but it is significant if measured against a standard scale every 6 months or year.
Maxwell recommends ranking the daily dozen from 1-12 with #1 your strongest and #12 your weakest. Then discuss your ranking with a friend. Then spending 60 days working on two practices from your top 6 and one from your bottom 6. I had trouble ranking them 1-12, but dividing them into top 6 and bottom 6 was easier. Below see the list of "daily dozen" in the order he covers them in the book. I am starting by working on #'s 2, 4, and 5. However, I find that they all are connected and I can't help but be working on others simultaneously. As part of #5 and in an attempt to not overly annoy my wife with random babblings about the books I am listening to, I will begin posting more frequently in this blog. I also feel that this will show my progress in much the same way Maxwell demonstrated his. Without further ado, the daily dozen:
1. Attitude --> Possibilities
2. Priorities --> Focus
3. Health --> Strength
4. Family --> Stability
5. Thinking --> Advantage
6. Commitment --> Tenacity
7. Finances --> Options
8. Faith --> Peace
9. Relationships --> Fulfillment
10. Generosity --> Significance
11. Values --> Direction
12. Growth --> Potential
Now get out there and live them every day...because Today Matters!
As an aside: according to Tom Corley http://richhabits.net/?s=read+non+fiction 63% of wealthy people listen to audio books during commute to work vs. 5% for poor people... I must be one of the 5% :) I wonder if when I become wealthy I'll pull the wealthy up to 64% and the poor people will drop to 4%...
I recently finished listening to a book Today Matters: 12 Daily Practices to Guarantee Tomorrow's Success by John C. Maxwell. I really liked how he discussed how each practice affected him in each decade of his life. This sort of showed me a timeline of how practicing each of his "Daily Dozen" principles could affect my life if I start living them now. As a physical therapist I recognize how small changes in behavior can make large changes over time, but it's easy to give up before you see the fruits of your labor. Almost like a farmer giving up on his seeds because he doesn't see them germinating underground. Many times it takes a long time to see progress and it can be difficult to recognize the progress as it comes slowly. I often tell my patients that they may not notice the changes just like a child cannot see their growth in height day by day, but it is significant if measured against a standard scale every 6 months or year.
Maxwell recommends ranking the daily dozen from 1-12 with #1 your strongest and #12 your weakest. Then discuss your ranking with a friend. Then spending 60 days working on two practices from your top 6 and one from your bottom 6. I had trouble ranking them 1-12, but dividing them into top 6 and bottom 6 was easier. Below see the list of "daily dozen" in the order he covers them in the book. I am starting by working on #'s 2, 4, and 5. However, I find that they all are connected and I can't help but be working on others simultaneously. As part of #5 and in an attempt to not overly annoy my wife with random babblings about the books I am listening to, I will begin posting more frequently in this blog. I also feel that this will show my progress in much the same way Maxwell demonstrated his. Without further ado, the daily dozen:
1. Attitude --> Possibilities
2. Priorities --> Focus
3. Health --> Strength
4. Family --> Stability
5. Thinking --> Advantage
6. Commitment --> Tenacity
7. Finances --> Options
8. Faith --> Peace
9. Relationships --> Fulfillment
10. Generosity --> Significance
11. Values --> Direction
12. Growth --> Potential
Now get out there and live them every day...because Today Matters!
Saturday, March 7, 2015
Winning in the Margins--50 cents = $434,124
Winning in the Margins!!
Richard Paul Evans wrote the book The Five Lessons a Millionare Taught Me. Lesson four is "Winning in the Margins". It's been several years since I read his book and I don't truly remember how he explained the principle, but this principle is one that has stuck with me and somewhat haunted me. Though this isn't exactly how he meant it, if I remember correctly, I'm beginning to see that we need to "win in the margins" of every part of our life and business. Said another way, it's the great magnitude of little things.
I’m convinced that this is the primary reason for business success or failure. Success in business finances and personal finances isn't a matter of doubling income, it's a matter of doubling net profits! This can be done in several ways. A failing business and successful business are usually not that far apart. Understand that if I make $4,000/month and I am saving $400/month. I only need to make $4,400 and save the extra $400 to DOUBLE my retirement income. In other words an increase of 10% in salary can increase your retirement savings by 200%! And if we take the same principle into retirement things get even better! If you can retire on 100% of you retirement savings (and I hope you can, otherwise you probably should think three times about retiring, and then keep working instead) then you can blow the extra on whatever floats your boat (how 'bout buy a boat and then buy what floats it to the little island that you also will own one day) or retire a lot sooner! Or realize that your time is freed up to make some real money and make a real difference in the world and your world.
All the little things matter a ton! It’s the last little push that makes all the difference. Your salary pushes you up the hill, the margin pushes you the last 3 feet so you can coast down the other side. Once you've paid for all of your expenses, every dollar you earn goes in your pocket (after Uncle Sam picks your pocket of course).The little things--the extra dollar you earn (Richard Paul Evans' mentor's meaning), the extra dollar you don't spend, the extra smidgen of a percentage point added to a loan, the extra smile you give your customer, the extra perk you give to over-perform, the extra flair you give your marketing, the extra thanks you give your employee, the extra few dollars negotiated in a business contract, the extra $1/hour you negotiate in your salary which equals $2080 if you work full time. If you can’t get an extra dollar try an extra 50 cents for $1040, or even 25 cents for $520. Ask your boss for an extra 25 cents when you are negotiating your salary--who can say no to that?--and you get yourself a nice Christmas bonus of $520. You may even get a Christmas bonus from work too!
In addition to skills and attitude (much of which depends on your upbringing and social construct and much of which depends on what you are willing to work for), I bet this largely accounts for the disparity between classes--at least between low and upper middle class. If you and I both live on $50,000 to pay all our bills and you make $50,000 and I make $55,000 and invest the extra $5,000 at 7% per year interest in a Roth IRA from age 20-65 (check out bankrate.com for many easy financial calculators). I will have over $1.5 million dollars when I retire and you will have $0. If I want to double my retirement to over $3 million, I need only make $60,000 per year instead of $55,000. Or perhaps I ask for an extra 25 cents/hour when we get hired and I make $50,520 per year. That 25 cents ($520/year) invested = $158,991 in retirement. You could go on a SWEET 25 cent vacation for $158,991 even factoring in inflation. Or blow it on Christmas for the next 45 years, that works for me too. If you can make an extra 1% (8% instead of 7%) on your interest, you get an extra $58,071. Two simple tiny changes: 25 cents and 8% = $217,062. May as well ask for a dollar, you may get 50 cents and then you’re well on your way to half a million!
As a business owner, if you negotiated 25 cents lower, you could give out some sweet $520 bonuses to all your employees every year! Or if you are an owner of a company with 1924 employees, you could pocket an extra $1,000,000 a year. Of course you’d have to consider whether that extra 25 cents would lose you some good employees or morale which may cost you more. But most studies show there are better ways to say “thank you” to your employees than an extra 25 cents an hour...like saying "thank you"…though a $158,991 Christmas retirement check wouldn’t hurt either.
Friday, August 8, 2014
Just Gonna Be Popular
I've been reading an interesting book called Viral Loop, by Adam L. Penenberg. In a part of the book that doesn't seem to flow with the rest, but perhaps explains the rest of the book better than the rest of the book, Penenberg goes on a tangent about human nature and the societal and human need to be connected with others, and yet be special. It jives with some of my recent thinking about business and life. Here are a few questions to get you thinking:
Why does that 3-9 year old boy or girl that you've never met before come up to you at the park and yell, "Watch what I can do!"?
Who was the most popular girl or boy at your school? Why? Were they actually the most interesting person? Why did almost everyone want to be friends with them?
Why do lunchrooms/cafeterias in every circumstance have tables that are full and tables that are empty? Why do you sit at the table that you do (likely the full one in some circumstances, and the empty one in others)?
Are the most popular movie actors and actresses the best actors/actresses?
Why do some businesses with great ideas fail? And yet why do you know what a Snuggie is?
Why do you like certain people, companies, products, candidates?
Why do combat troops follow certain leaders into battle against all odds?
Why do some sports teams/athletes know they can win no matter what?
Why did you share that funny quip on facebook? Why did you talk about or share that app with your coworker or family member or friend?
Why have or haven't you used the incentive program from work that pays you money if you bring in a new employee?
Why is it hard to sell something you aren't excited about?
Why do you make more noise when someone walks in the room?
Why did you share your food at dinner stating, "This is delicious, try some!"? And why did you equally enthusiastically say, "Ugh! This is disgusting! Here, try some."?
Something awesome, new, wonderful, cool, exciting, hilarious, lame, stupid, thought provoking or touching, just isn't that great without someone to share it with.
Robert Kiyosaki (author of the Rich Dad, Poor Dad series) talks about having the necessary business skills to succeed and building a BI triangle. He also states that every person and family and business all have a BI triangle that needs to be in balance to be a success.
Penenberg talks about the need for a product to be good, sharable, and easy to use in order to become a viral loop. You have to want to share it, or you won't...even if they pay you.
This is why incentive programs don't work well, but social media does. What matters in the equation is me...or you. How you touch your customer, friend, family member is more important than you or your product--because it includes them.
People repost that stupid facebook message because it makes them feel important and connected. People don't talk to strangers because they don't want to feel stupid (or get mugged). People sit alone at a table because sitting alone makes them feel safer than the chance of being rejected at the big table. People love to watch Brad Pitt because they wish they could bring him home for dinner. They watch Steve Buscemi because he's a great actor and happens to be in the film (how many of you had to look up who Steve is?). That little kid wants you to watch him, because an awesome trick isn't awesome unless someone can see how awesome it is. And because if no one watches him, he'll have to admit that he's not that awesome. Nobody wants that.
They say people can judge if they like a person in less than 5 seconds. The first impression is the most important impression because nobody likes changing their minds--they are usually right (or else they'd inherently be wrong...and once again Nobody wants that!). I think people can judge a business, or a website in the same amount of time. Only the cyber world functions much faster than the real world. This is both a blessing and a curse. You can become a success much faster, or a failure much faster. But you don't have as much time to make adjustments.
So, how do you make your business or yourself a success? You feed the need others have to be special and feel connected (this is often called customer service). You make yourself popular. The only problem is that I don't know the answer to the question: why was that boy/girl in school popular?
I'm convinced I'm going to have to watch all those horrible 90's chick flicks about high school girls becoming popular to understand.
Other thought provoking questions why does Pareto's law hold true in so many instances? Is the reverse also true?
Why does that 3-9 year old boy or girl that you've never met before come up to you at the park and yell, "Watch what I can do!"?
Who was the most popular girl or boy at your school? Why? Were they actually the most interesting person? Why did almost everyone want to be friends with them?
Why do lunchrooms/cafeterias in every circumstance have tables that are full and tables that are empty? Why do you sit at the table that you do (likely the full one in some circumstances, and the empty one in others)?
Are the most popular movie actors and actresses the best actors/actresses?
Why do some businesses with great ideas fail? And yet why do you know what a Snuggie is?
Why do you like certain people, companies, products, candidates?
Why do combat troops follow certain leaders into battle against all odds?
Why do some sports teams/athletes know they can win no matter what?
Why did you share that funny quip on facebook? Why did you talk about or share that app with your coworker or family member or friend?
Why have or haven't you used the incentive program from work that pays you money if you bring in a new employee?
Why is it hard to sell something you aren't excited about?
Why do you make more noise when someone walks in the room?
Why did you share your food at dinner stating, "This is delicious, try some!"? And why did you equally enthusiastically say, "Ugh! This is disgusting! Here, try some."?
Something awesome, new, wonderful, cool, exciting, hilarious, lame, stupid, thought provoking or touching, just isn't that great without someone to share it with.
Robert Kiyosaki (author of the Rich Dad, Poor Dad series) talks about having the necessary business skills to succeed and building a BI triangle. He also states that every person and family and business all have a BI triangle that needs to be in balance to be a success.
Penenberg talks about the need for a product to be good, sharable, and easy to use in order to become a viral loop. You have to want to share it, or you won't...even if they pay you.
This is why incentive programs don't work well, but social media does. What matters in the equation is me...or you. How you touch your customer, friend, family member is more important than you or your product--because it includes them.
People repost that stupid facebook message because it makes them feel important and connected. People don't talk to strangers because they don't want to feel stupid (or get mugged). People sit alone at a table because sitting alone makes them feel safer than the chance of being rejected at the big table. People love to watch Brad Pitt because they wish they could bring him home for dinner. They watch Steve Buscemi because he's a great actor and happens to be in the film (how many of you had to look up who Steve is?). That little kid wants you to watch him, because an awesome trick isn't awesome unless someone can see how awesome it is. And because if no one watches him, he'll have to admit that he's not that awesome. Nobody wants that.
They say people can judge if they like a person in less than 5 seconds. The first impression is the most important impression because nobody likes changing their minds--they are usually right (or else they'd inherently be wrong...and once again Nobody wants that!). I think people can judge a business, or a website in the same amount of time. Only the cyber world functions much faster than the real world. This is both a blessing and a curse. You can become a success much faster, or a failure much faster. But you don't have as much time to make adjustments.
So, how do you make your business or yourself a success? You feed the need others have to be special and feel connected (this is often called customer service). You make yourself popular. The only problem is that I don't know the answer to the question: why was that boy/girl in school popular?
I'm convinced I'm going to have to watch all those horrible 90's chick flicks about high school girls becoming popular to understand.
Other thought provoking questions why does Pareto's law hold true in so many instances? Is the reverse also true?
Tuesday, August 5, 2014
When People Become Commodities
Stay with me on this one. It all comes together in the end.
In 1856, the Chicago Board of Trade enacted a system for grading corn. This was the introduction to the world of Number 2 Field Corn (for a more technical definition of field corn--if you like that sort of thing--please see the bottom of this post). No. 2 field corn is what most Americans (by "American" in this case, I mean citizen of the United States of America, as Canadians have not fully gone corny and can still buy a Coca Cola made with sugar which they shouldn't be drinking either) eat the most of every day. Think of high fructose corn syrup, corn syrup, corn starch, modified corn starch, corn meal, corn chips, corn flakes etc. And that's just the list of ingredients and products where you will recognize that you are drinking or eating corn, there is also the list of things you won't recognize that are derivatives of corn: ethanol (yes, your car consumes No. 2 field corn too), ascorbic acid, baking powder, caramel color, calcium citrate, caramel, cellulose, citric acid, dextrin, maltodextrin, dextrose, lactic acid, malt, magnesium citrate, xylitol, and my personal favorite, xanthan gum, and the list goes on.
So what's the point? Before 1856, if you wanted corn you would buy a bag of it with a seal or mark on it so you knew what farm it came from. If you didn't like it, you could "vote with your feet" or wallet and buy from another farmer. But you personally would vet the corn yourself. Different growers had different types of corn and growing methods that may yield a better or worse product, but you would get to decide what you liked best. Farmers did their best to produce the best corn at the cheapest prices.
After 1856, all corn that met the standard "No. 2 field corn" was brought to the granary and stored in one large pile to be processed together. Farmers did their best to produce corn that met the minimum standards (No. 2 field corn). As much of it as possible without regard to quality beyond the minimum "No. 2". Corn was officially a commodity. As such it became interchangeable with other corn meeting the minimum standard. Nobody cares where a commodity comes from. If gold comes out of the ground in South America or Africa it is interchangeable as long as it has the same number of carats. If your field corn tastes better than your neighbors, nobody will ever know, because by the time it reaches your table as corn flakes it has been mixed with all the other corn of the same grade and processed beyond recognition. The bottom line with commodities is that increased quality beyond the minimum standard is meaningless.
Earlier this year, I became a commodity. I began working for a healthcare staffing company. When a healthcare professional calls in sick unexpectedly, or has a baby two weeks early, or has a vacation that no one can cover, they call my company. My company sends a "No. 2 field healthcare worker". They send me. Or someone who is interchangeable with me and the person who we are replacing. We are commodities. We have the necessary degree, vaccinations, license and time available. I know of a healthcare professional who could not find a job after graduating (likely because of ageism). After interviewing at several companies with no success after the interviews, she took a job at a staffing company and then filled in for many of the people who were hired in her stead. The kicker--the companies had to pay almost double for her services (commodity prices rise during a shortage).
The problem with becoming a commodity is that you are treated like one. Just like with corn, the people I work for aren't looking for the best replacement. They are looking for any viable replacement. Also, it doesn't really matter what quality of care they provide as long as it meets the minimum standards (nobody dies and nobody makes a scene). What is the number one question a prospective employer is asking? "What is your productivity percentage?" This is akin to asking a farmer, "what is your yield per acre?" It is assumed that the yield meets the minimum standard and no more thought is given to quality. Quality is no longer the goal, quantity is king.
The sad truth is that you can have the largest yield per acre and still be unprofitable. Likewise, you can have all your employees be highly "productive" as a healthcare facility and still be in the red. Productivity matters only so long as you are profitable. Not to mention that with healthcare we are talking about workers and patients who are people and not products like corn. It's a little scary what may happen in the future of healthcare quality, when productivity is the primary driver.
As a side note, if you are in a field where you are commoditized, you need to either differentiate or "de-commoditize" yourself by making yourself or your product special in some way so you can justify charging more for it. Or you need to out produce your competitors and become one of the biggest purveyors of your good or service so you have some control or ability to bargain over prices or control the supply line. If you are unable to get large enough, some industries have had some success establishing co-ops to gain collective bargaining power. If that term sounds familiar, it is because of the labor movement (commodity workers) establishing unions (co-op) demanding worker rights last century.
What is No. 2 Field Corn?
No. 2 field corn is a grade designation of the U.S. Department of Agriculture Federal Grain Inspection Service. It is corn that has a minimum test weight of 54 pounds per bushel at 15.5% moisture. It has a maximum limit of 3% broken kernels and foreign material and cannot exceed 5% total damaged kernels.
https://www.extension.org/pages/39109/what-is-no-2-field-corn#.U93EF0DOdP4
In 1856, the Chicago Board of Trade enacted a system for grading corn. This was the introduction to the world of Number 2 Field Corn (for a more technical definition of field corn--if you like that sort of thing--please see the bottom of this post). No. 2 field corn is what most Americans (by "American" in this case, I mean citizen of the United States of America, as Canadians have not fully gone corny and can still buy a Coca Cola made with sugar which they shouldn't be drinking either) eat the most of every day. Think of high fructose corn syrup, corn syrup, corn starch, modified corn starch, corn meal, corn chips, corn flakes etc. And that's just the list of ingredients and products where you will recognize that you are drinking or eating corn, there is also the list of things you won't recognize that are derivatives of corn: ethanol (yes, your car consumes No. 2 field corn too), ascorbic acid, baking powder, caramel color, calcium citrate, caramel, cellulose, citric acid, dextrin, maltodextrin, dextrose, lactic acid, malt, magnesium citrate, xylitol, and my personal favorite, xanthan gum, and the list goes on.
So what's the point? Before 1856, if you wanted corn you would buy a bag of it with a seal or mark on it so you knew what farm it came from. If you didn't like it, you could "vote with your feet" or wallet and buy from another farmer. But you personally would vet the corn yourself. Different growers had different types of corn and growing methods that may yield a better or worse product, but you would get to decide what you liked best. Farmers did their best to produce the best corn at the cheapest prices.
After 1856, all corn that met the standard "No. 2 field corn" was brought to the granary and stored in one large pile to be processed together. Farmers did their best to produce corn that met the minimum standards (No. 2 field corn). As much of it as possible without regard to quality beyond the minimum "No. 2". Corn was officially a commodity. As such it became interchangeable with other corn meeting the minimum standard. Nobody cares where a commodity comes from. If gold comes out of the ground in South America or Africa it is interchangeable as long as it has the same number of carats. If your field corn tastes better than your neighbors, nobody will ever know, because by the time it reaches your table as corn flakes it has been mixed with all the other corn of the same grade and processed beyond recognition. The bottom line with commodities is that increased quality beyond the minimum standard is meaningless.
Earlier this year, I became a commodity. I began working for a healthcare staffing company. When a healthcare professional calls in sick unexpectedly, or has a baby two weeks early, or has a vacation that no one can cover, they call my company. My company sends a "No. 2 field healthcare worker". They send me. Or someone who is interchangeable with me and the person who we are replacing. We are commodities. We have the necessary degree, vaccinations, license and time available. I know of a healthcare professional who could not find a job after graduating (likely because of ageism). After interviewing at several companies with no success after the interviews, she took a job at a staffing company and then filled in for many of the people who were hired in her stead. The kicker--the companies had to pay almost double for her services (commodity prices rise during a shortage).
The problem with becoming a commodity is that you are treated like one. Just like with corn, the people I work for aren't looking for the best replacement. They are looking for any viable replacement. Also, it doesn't really matter what quality of care they provide as long as it meets the minimum standards (nobody dies and nobody makes a scene). What is the number one question a prospective employer is asking? "What is your productivity percentage?" This is akin to asking a farmer, "what is your yield per acre?" It is assumed that the yield meets the minimum standard and no more thought is given to quality. Quality is no longer the goal, quantity is king.
The sad truth is that you can have the largest yield per acre and still be unprofitable. Likewise, you can have all your employees be highly "productive" as a healthcare facility and still be in the red. Productivity matters only so long as you are profitable. Not to mention that with healthcare we are talking about workers and patients who are people and not products like corn. It's a little scary what may happen in the future of healthcare quality, when productivity is the primary driver.
As a side note, if you are in a field where you are commoditized, you need to either differentiate or "de-commoditize" yourself by making yourself or your product special in some way so you can justify charging more for it. Or you need to out produce your competitors and become one of the biggest purveyors of your good or service so you have some control or ability to bargain over prices or control the supply line. If you are unable to get large enough, some industries have had some success establishing co-ops to gain collective bargaining power. If that term sounds familiar, it is because of the labor movement (commodity workers) establishing unions (co-op) demanding worker rights last century.
What is No. 2 Field Corn?
No. 2 field corn is a grade designation of the U.S. Department of Agriculture Federal Grain Inspection Service. It is corn that has a minimum test weight of 54 pounds per bushel at 15.5% moisture. It has a maximum limit of 3% broken kernels and foreign material and cannot exceed 5% total damaged kernels.
https://www.extension.org/pages/39109/what-is-no-2-field-corn#.U93EF0DOdP4
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