Archive for June, 2010

In my part of Tempe, Arizona, I am Varsity Coach for the Boy Scout troop. So one thing that interests me is teaching young people to be creative and look at the world around them for ideas.

The Boy Scouts of America recently announced a new merit badge – Inventing – that fosters creativity and innovation.

The requirements for the Inventing Merit Badge are essential skills for any entrepreneur.  Let’s see how you stack up.

Your advertising message needs to be in front of as many people as possible.  But reaching out to everyone is cost prohibitive.

The art of advertising effectively is to segment the population and find out what your ideal customer looks like so you can pay just to be in front of them.  If it cost a dollar to reach out to one person, it would cost $310,000,000 to reach everyone in the United States – once.

Whatever you sell, that probably isn’t going to be effective.  Coca-Cola doesn’t reach out to people once.  (They are one of few companies that reach out to everyone, though.  You can do that when you had revenue of $31 billion in 2009.)

Once you have segmented your market, you need to spread the word.  But you might be disappointed that one of the modern “laws” of marketing is wrong: Sex doesn’t sell.

I know what I said last week.  It still applies in most situations.  But in a climate of disruptive innovations, listening to your customers can cost you industry leadership.

Your customers know what they need now.  But if you always base your plans off of what your customers think they want in the future you will lose your position of industry leadership.

Your customers are chasing markets with higher sales and higher margins.  They should and you should.  But there are new businesses trying to expand from their markets to yours.

An example from the steel industry over the last 20 years in the United States is a prime example of this problem.

By now you have read about the problems with AT&T and iPhone 4.  There were so many orders that AT&T stopped taking new orders.

This probably isn’t good for AT&T, who may soon lose iPhone exclusivity.

But from Apple’s perspective, the problems with AT&T are the perfect advertising.

If you had a football stadium full of every potential customer for your product or service, what would you tell them to make them love you?

How will you keep them from tuning out after 10 words?

Don’t frame yourself based on your competition.  Don’t talk about about the products and services you offer.

I happened across one of the most brilliant advertisements today.

A friend passed it along to me on Facebook.  All you have to do is “Like” the Redbox page and you get a password for a free one night movie rental on June 21st.  Redbox wants people on their “Like” page (at 622,000+ as I type this).  People want free movie rentals. Of course I will share the location for your free movie (below the fold).

The biggest little problem I have heard lately is employees texting on the job.

One text message is no big deal.  You lose a minute or so of productivity per text message.  But what happens when someone receives and sends 30 text messages an hour as they carry on at least three conversations?

Where will your future competition come from?

In The Innovator’s Dilemma, Clayton Christensen talks about the threats that come to existing businesses from innovation.

Innovations could be anything from the telephone (which displaced telegraphs), to mini-steel mills (which displaced larger steel mills), to word processors (which displaced type writers), to digital photography (which displaced chemical film), to computer aided drafting (which displaced hand drawn designing), to blogging (which displaced print newspapers), to anything else.

The graph below summarizes the findings of The Innovator’s Dilemma.