Tag Archive for Harvard Business Publishing

Pricing Strategy

The Harvard Business Review’s Daily Stat reminds us why pricing is so important. The McKinsey Quarterly found a company that was selling an industrial piece of equipment with a net margin of -200%.

Pricing Strategy

Long Term Pricing Strategy

The lesson is that we should price products or services across the product life cycle. The example of the negative net margin occurred because an industrial-equipment manufacturer spread its costs across all products. They were deceived to believe that they were making a reasonable margin on older products. However, a closer examination of expenses of each product phase showed that older products cost substantially more to produce than it had expected.

Proof of Why Large Committees Don’t Work

In decision making groups, 7 people could be the optimal number.

The Harvard Business Review’s Daily Stat shared the findings of Decide & Deliver: 5 Steps to Breakthrough Performance in Your Organization. Once you’ve got 7 people in a decision-making group, each additional member reduces decision effectiveness by 10%. Thus, a group of 17 or more rarely makes any decisions.

What about your marketing? Do you have many people participating in the process?

Engagement and Motivation, Illustrated

The Harvard Business Review’s Peter Bregman told a story of cooking with farm fresh produce in a blog post titled, The Farm-to-Table Secret to Motivating People.

He told of how having the experience of a few days at a farm with his family connected him in unexpected ways to food and led to him feeling very inspired to create some complex food with the produce they brought home. The conclusion he reached was that the earlier and sooner people get involved in a process, the more they become connected to it.

You want to try a new sales process? Don’t figure it all out yourself and then tell your sales people about it. Let them figure it out with you.

Want customers to buy your service or product? Involve them in the creation of it. They feel something deeper than the success of a project gone well. They feel pride of ownership. They feel satisfied by the journey that brought them to their success.

Manage Energy

Allocating energy may be more important and a better way to be more productive than by trying to manage time. The Harvard Business Review’s Management Tip of the Day shared these four tips as ways to replenish your energy, work smarter and prevent burnout:

Take brief but regular breaks. Step away from your desk every 90 to 120 minutes. Take a walk, get a drink, or just stretch your legs.

Say thank you. Being positive boosts your energy level. Regularly express appreciation to others.

Reduce interruptions. Perform tasks that need concentration away from phones and email. Instead, designate specific times in your day to respond to messages.

Do what you love. Understand where your strengths lie and what you enjoy doing. Find ways to do more of those things and less of what tires you out.

Can we help you say thank you to some of your favorite customers? Can we do what we love, helping you with your marketing and mailing, that will allow you to spend more time doing what you love?

Why Corporate Headquarters Are So Desired

The ability of any city to attract or retain the headquarters of an average-size company is worth $3 million to $10 million per year in public contributions to local nonprofits, in a recent post from the Harvard Business Review. The effect seems to be due to the number of wealthy individuals present in the region rather than to the company’s direct contributions. A new headquarters yields, on average, some 275 additional individuals with income over $100,000.

This supports a statement from Local First Arizona about how a much larger percentage of money spent with a locally owned business will stay in the local economy.

A Tribute to the Underdog

As a tribute to cute costumes and a way to help you consider a possible branding message, we want to share some highlights from Harvard Business School professor, Anat Keinan.

The weaker party is often more attractive to many people. The reason might be due to consumers wanting to identify with the underdog. In today’s economically difficult times, it appears, underdog brands are gaining power in the marketplace.

Stories about underdogs overcoming great odds through passion and determination are resonant during difficult times. They inspire and give hope when the outlook is bleak. They promise that success is still possible. Throughout history Americans have embraced the American Dream, which proclaims that through hard work and perseverance anyone can be successful.

Underdog brand biographies (that highlight the companies’ humble beginnings, hopes and dreams, and noble struggles against adversaries) are being used by both large and small companies and across categories. Even large corporations, such as Apple and Google, are careful to retain their underdog roots in their brand biographies.

The common themes that link these brands’ underdog biographies are

  1. a disadvantaged position in the marketplace versus a “top dog,” a well-endowed competitor with superior resources or market dominance, and
  2. tremendous passion and determination to succeed despite the odds.

Marketers can use underdog narratives to positively affect consumers’ perceptions of and purchase of brands. “Underdog narratives are often delivered to consumers through the rhetorical device of a brand biography, an unfolding story that chronicles the brand’s origins, life experiences, and evolution over time in a selectively constructed story.”

Many contemporary brand biographies contain underdog narratives. Product packaging, corporate Web sites, direct mail advertising, blogs, and marketing communications tell the biographical stories of brands.

  • Avis’s classic slogan “we’re number 2” emphasized that it was playing second fiddle to a giant in the rental car business.
  • Brands such as Google, Clif Bar, and Apple celebrate their garage origins. Hewlett-Packard recently bought, and has a whole section on its Web site dedicated to, the garage in which it started. It is now a historical landmark.
  • Starbucks, in an effort to reverse declining sales, recently launched Pike Place Roast, which emphasizes the brand’s humble Seattle coffee culture beginnings.
  • Adidas’s “Impossible Is Nothing” campaign emphasized the underdog stories of famous athletes.

Details from France Provide Signals

The Harvard Business Review’s Daily Stat republished information from the McKinsey Quarterly about how people over age 55 will drive two thirds of all growth in consumer spending in France over the next 20 years. These findings can offer implications for other developed countries.

French Consumers

French Consumers

Consumers do respond differently to different types of media. While most of us still prefer direct mail, older consumers prefer it even more.

Advice for New Ventures May Help Established Businesses Too

The Harvard Business Review offers great short tips in its “Management Tip of The Day”.

These were offered as tips for new fragile ventures. They suggested that knowing these three things would help to manage through this precarious time.

  1. How many days you have to live? Businesses fail because they run out of cash. Knowing exactly how many months or days you have to live can help you better manage costs and your funding strategy.
  2. Why you are doing this. Success requires hard work and constant attention. If you don’t know exactly why you should make the effort, neither will your funders.
  3. The top two critical issues. Be precise about which two issues deserve the highest priority. These may not be the most urgent, but are the ones that matter most to your venture’s success.

Too Much Contact to Businesses Can Hurt

The Harvard Business Review featured some results from a McKinsey & Company study that found that the “most destructive” failures of business-to-business sales reps are too much contact with customers (35%). Customers want to be contacted, not bombarded. The upside of getting things right is significant: A primary supplier perceived as having a high-performing sales force can boost its share of a customer’s business by 8 to 15 percentage points.

Chart of Ways Customers Are Turned Off

The methods of “bombardment” are in person, by phone or via email. Postal mail is not listed. Use direct mail to stay in touch with business customers without making them feel inundated.

The “WOW!” Number

A recent Harvard Business Review Blog asked, “What Surprising Number Will Change Your Business?”

Numbers are the universal language of business. We use them to win approval for product introductions, to attract investors for our startup ideas, to make the case for expanding into new markets or entering new categories. In other words, numbers, when used well, tell a compelling story.

Marketing and advertising is about big ideas. But it is also very much about numbers: budgets, ratings, impressions, ROI. Which brings us to the search for the “Wow!” Number, and why one piece of data may be worth a thousand words.

Here are a few such numbers.

  • 70% of teens who abuse prescription drugs get them from home.
  • 80% of women plan to exclusively breastfeed; only 20% actually do.
  • Many are in front of whiteboards 4 hours a day, but only use them for 4 minutes.
  • 80% of people age 45+ consider changing careers; only 6% actually do.

Why do these numbers tell a story? Because they’re simple and easy to understand. Because they’re human and easily relatable. Because they surprise us, and/or capture the gap between intentions and actions.

And how do you get to such numbers? Juxtapose: “Put related numbers together to create new information.” Try different contexts: “What’s the social angle? The green angle? Put it in terms of time, or length, or volume.” Turn them over: “2% one way might not be as interesting as 98% the other way.”

However you choose to rethink your approach to numbers, it’s an important way to address a huge missed opportunity. Business isn’t just a battle of products and services. It’s a battle of ideas about priorities, opportunities, values, and value. Ultimately, those competing ideas get reduced to competing numbers. So, if you can arrive at numbers that matter, you’ve got a better chance at winning the battle of ideas.

We have told you some surprising numbers about mail in the last few months:

More than 70% of Gen Yers (born 1977-1994) and Gen Xers (born 1965-1976) sort their mail immediately

76% of internet users were directly influenced to buy an item or service thanks to direct mail

78% of email recipients do not open the message, so that means that 94.1% of email recipients are not clicking through to landing page