Archives for category: Informative Ramblings

A company’s most important asset is its customers.  They are extremely expensive to acquire, but keeping them happy is incrementally inexpensive.  Happy customers buy more product and stay in programs longer.  They are more responsive, and potentially purchase large multiples of product, or higher margin deluxe versions.  They are your best advocates.  What is the lifetime value of a happy advocate?

My first job after university was as a program manager at The Danbury Mint (MBI) overseeing various collectibles (dolls, plates, ornaments, die-cast cars, etc).  Most programs were sold as a one-shot, then converted in-shipment (and through follow-up mailings) to the rest of the series (typically a collection of either 4, 8 or 12 items).  The customer acquisition cost often exceeded 50% of the retail price, and on larger series could be 200%.  If a customer only bought the lead item, the amount of profitable marketing available was minimal.  Through conversions to the rest of the collection, the average customer purchased 2.2 to 2.7 products in a four-item program.  This additional margin allowed us to mail deeper inside, as well as, more outside lists.  Since lead customers were so expensive to acquire, it was vital that we treated them like gold.  It was essential that products shipped quickly, with packaging that would enhance the customer experience.  This was a fantastic educational experience on the lifetime value of a customer.

Direct Response is a fantastic medium that can ramp-up quickly and effectively in a test-expand approach.  Unfortunately, too many marketers focus only on the short term, with a one and done mentality; they often ignore the longer-term value of customers at the expense of immediate profits.  Think more from your customer’s perspective.  Have diligent inventory management so that shipments are never delayed and make sure to regularly ship product to yourself.  How does the product arrive?  Are the proper additional offers enclosed in package?  Is the unboxing experience impressive to your customer?  Is he incentivized to reorder?  Is she incentivized to tell a friend?

Treating the customer well may be slightly more expensive today, but invaluable for tomorrow.

Amazon has been a fantastic deflationary source for consumers, however it is also constantly squeezing seller margins.  Fees, as a percentage of Gross Selling Price, have increased every year since 2009. In 2009, Amazon fees totaled less than 20% of the gross selling price for most third-party sellers.  Now, nearly 10 years later, Amazon fees have risen to nearly 35%.  Since most third-party sellers are unable to increase prices to offset the majority of these fees, margins are constantly under pressure.

Sellers can combat some of the increasing Amazon fees by more effectively managing their inventory to reduce monthly and long-term storage.  Sellers can also redesign certain products to reduce weight and optimize shipping expenses.  However, sellers ultimately have no choice, but to accept the Amazon fee increases.  The margin squeeze has caused valuation multiples of Amazon only businesses to drop significantly over the last several years, especially sellers of staple white-label items.

Several years ago, sellers could offer white-label products, optimize their listings and enjoy year-over-year growth due to the increasing Amazon audience.  However, Amazon is directly capturing an ever-increasing share of white-label products (from batteries and charging cables, to bedding, luggage, and recently small appliances and apparel).  Amazon only had a minor share (or even zero share) of these markets a few years ago, but will control the vast majority of each within the next couple of years.

The speed of this transition is rarely talked about, but will make an amazing case-study in the future, as Amazon is capturing, virtually, entire category after category.  Differentiated, proprietary products were beneficial for third-party sellers in the past, but now they are an absolute must to thrive on the Amazon platform.

Update:  The New York Times published an detailed article today (July 23, 2018) on Amazon capturing increasing market share of white-label products.  How Amazon Is Winning the Online Retail Game. Again.  A few snippets below:

The results were stunning. In just a few years, AmazonBasics had grabbed nearly a third of the online market for batteries, outselling both Energizer and Duracell on its site.

The company now has roughly 100 private-label brands for sale on its huge online marketplace, of which more than five dozen have been introduced in the past year alone. But few of those are sold under the Amazon brand. Instead, they have been given a variety of anodyne, disposable names like Spotted Zebra (kids’ clothes), Good Brief (men’s underwear), Wag (dog food) and Rivet (home furnishings). Want to buy a stylish but affordable cap-sleeve dress? A flared version from Lark & Ro ($39), maybe in millennial pink, might be just what you’re looking for.

Amazon is utilizing its knowledge of its powerful marketplace machine — from optimizing word-search algorithms to analyzing competitors’ sales data to using its customer-review networks — to steer shoppers toward its in-house brands and away from its competitors, analysts say.

Update: October 16, 2018: The below excerpt is from a Bloomberg published article:  Amazon Doles Out Freebies to Juice Sales of Its Own Brands

Amazon has more than 120 brands, about 100 of which were introduced over the past two years, according to TJI Research. One is Amazon Basics motor oil. Less than three months since its July debut, the product has a 4.5-star rating based on about 100 customer reviews. That’s almost as many reviews as a similar Valvoline product sold on the site for six years. More than 80 percent of the reviews for Amazon’s new oil came through the Vine program;  the Valvoline oil had zero Vine reviews.

#Amazon  #DirecttoConsumer  #Private-label  # AmazonThirdParty  #AmazonSqueeze

View story at Medium.com

Invisible Influence: The Hidden Forces That Shape Behavior, is is another well-written, fun read by Johan Berger.  We underestimate the social influence of others on ourselves, yet we acknowledge its influence on others.  Through various research studies and quirky experiments, the book discusses how everything around us influences how we act, even if we don’t realize the impact.  Invisible Influence discusses how people imitate each other, as its safer to choose what has already been chosen by someone else, and this popularity can be self-fulling.  That restaurant must be good since its always crowded.  (This lasts until its oversaturated and eventually falls into the Yogism: Nobody goes there anymore, its too crowded).  Invisible Influence is an excellent companion to his bestseller Contagious: Why Things Catch On published in 2013.

Invisible Influence also touches on how successful products are often ‘similar but different’ than prior successful items.  This matches a personal mantra of offering customers more of what they are already buying.  If a customer is making a purchase they obviously like the item, therefore the next questions should be:  Do they want multiples of the item, Do they want the item in a different color (or format), Would they like a deluxe (or miniature) version of the item, Do they want complimentary/symbiotic items?  When we introduced Obama Coins years back, the original item was $10, but through offering additional strong similar and complementary items, we were able to raise the revenue per order to $66.

Below is a short animated introductory video to Invisible Influence:

Tenth Successful Transaction Sourced by Little White Dog inc for SCS Direct Inc in the Past Four Years

Little White Dog inc is honored to announce the addition of Cooks Choice to SCS Direct’s Housewares portfolio.  Cooks Choice, creator of numerous innovative products for grilling and home cooking, should be strong fit in SCS Direct’s growing housewares brands.  SCS looks forward to continuing the longstanding relationships Cooks Choice has developed since its founding in 26 years ago.

Little White Dog is proud to have worked with SCS Direct on its acquisitions of Cook’s Choice, Bentology, Kuissential, CucinaPro, SVAN, MD Essentials, Fasta Pasta, Itzbeen Innovated, Camerons Products and FlyeBaby.  Little White Dog continues to search for additional strategic partners with proprietary, quality products and strong retail distribution that can enhance SCS Direct’s platform.

Little White Dog is proud to announce SCS Direct Inc’s acquisition of Fasta Pasta.  This is the third transaction Little White Dog inc has sourced for SCS Direct in the past twelve months.  The official press release is below:

SCS Direct Inc Acquires Fasta Pasta – The Award-Winning Original Microwave Pasta Cooker

Fasta Pasta Joins the SCS Direct Inc Line of Revolutionary Products

Fairfield CT (PRWEB) September 25, 2014

Fasta Pasta – the original microwave pasta cooker was recently acquired by SCS Direct Inc., a consumer products company based in Milford, CT. Fasta Pasta perfectly cooks Al Dente spaghetti, fettucini, linguini, macaroni and lasagna quickly in any microwave. In fact, Fasta Pasta was recently awarded best microwave pasta cooker by Cooks Illustrated, August 2014, beating out products costing two and a half times as much. In addition, Fasta Pasta has been featured on dozens of TV shows including Rachel Ray.

Fasta Pasta cooks pasta quicker and better, with less mess, than boiling noodles in a pot. It saves time, energy, and is easy to use. Simply fill to the marked water line, add pasta, and in half the time of boiling, your pasta is perfectly cooked. Fasta Pasta is also great for rice, ramen noodles and perfectly steamed vegetables. The Fasta Pasta Original Microwave Cooker can be found at specialty cooking stores and Amazon.com

SCS Direct proudly offers award-winning lines of household products, including Camerons Products, Good Cooking, Deco, and Simple Cups. “When Fasta Pasta was introduced years ago, it revolutionized pasta making for the busy family, ” notes Howard Greenspan. “We are thrilled to offer this award winning product as part of our growing product line.”

The Fasta Pasta transaction was sourced and negotiated by Little White Dog Inc based in Norwalk, CT (http://www.LittleWhiteDoginc.com). Fasta Pasta is SCS Direct’s third successful transaction in the previous twelve months, including Camerons Products and Itzbeen Innovated. Little White Dog continues to search for additional strategic partners with proprietary, quality products and strong retail distribution that can enhance SCS Direct’s platform.

SCS Direct Inc. is a product development company and creator of best selling brands that include: Flyebaby, Ride Along Dolly, Simple Cups, Deco, Good Cooking and numerous others. SCS products are featured in countless independent stores and many mass retailers including Amazon, Bed Bath and Beyond, William Sonoma, BJs Warehouse, ToysRus, and more.

http://www.prweb.com/releases/2014/09/prweb12198734.htm

Going into 2013, I set the goal of reading twenty books and through the end of July I have completed twenty-five.  My top 7, as well as my entire 2013 reading list, is outlined below (basically in the order they were read).  I highly recommend the top seven. as each is a fun, thought provoking, and worthwhile read.

Top 7 Books so far for 2013

2013 Reading List

3D Printing

  • Makers, The New Industrial Revolution; by Chris Anderson  -Genuinely fun, fast read.  See Makers review.
  • Fabricated, The New World of 3D Printing; by Hod Lipson an Melba Kurman – Well done book with lots of worthwhile information.  There is less cheerleading than Makers, with more meat about future 3D printing areas including Bioprinting, Food processing and environmental.
  • Additive Manufacturing, 3D Printing, and the Coming Stock Market Boom; by Dr Alexander Elder – Short blurb which gives solid background info on 3D and also discusses the few 3D printing companies that are public.
  • 3D Printing: The Next Technology Gold Rush – Future Factories and How to Capitalize on Distributed Manufacturing by Christopher D Winnan
  • It Will Be Awesome If They Don’t Screw It Up: 3D Printing, Intellectual Property, and the Fight Over the Next Great Disruptive Technology, by Michael Weinberg – Short white paper (30 pages) mainly concerning Copyrights, Patents, and trademarks with respect to 3D printing.
  • What’s The Deal with Copyright and 3D Printing, by Michael Weinberg – Another short paper (30 pages)
  • From Bits to Pieces: The Business Innovation of 3D Printing, by Peter Keen – Discusses 3d printing for larger corporations.
  • The Tinkerers: The Amateurs, DIYers and Inventors Who Make America Great, by Alec Foege – Not about 3D printing, but celebrates the American innovative spirit.

Non 3D Printing

  • The Darvis System for Stock Market Profits, by Nicholas Darvis  http://www.scribd.com/doc/69831850/darvas
  • The Icarus Deception, by Seth Godin
  • The Physics of Wall Street, by James Owen Weatherall
  • Radical Openness: Four Unexpected Principles For Success, by Don Tapscott and Anthony Williams
  • Contagious: Why Things Catch On, by Johan Berger
  • The Power of Starting Something Stupid: How To Crush Fear, Make Dreams Happen, And Live Without Regret, by Richie Norton
  • The 4-Hour Work Week, Expanded and Updated, by Tim Ferriss
  • The Gamification Revolution:  How Leaders Leverage Game Mechanics To Crush The Competition, by Gabe Ziccherman and Joselin Linder
  • Speed Reading: How to Double or Triple Your Reading Speed in Just Under 1 Hour, by Justin Hammond
  • The Science of Marketing:  When to Tweet, What to Post, How to Blog, and Other Proven Strategies, by Dan Zarrella
  • For The Win: How Game Thinking Can Revolutionize Your Business, by Kevin Werbach and Dan Hunter
  • Hidden in Plain Sight: How to Create Extraordinary Products for Tomorrow’s Customers, by Jan Chipchase
  • Gamification and Game Mechanics Made Simple, by Nordic Press
  • The End of Big: How The Internet Makes David The New Goliath, by Nicco Mele
  • Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification, by Rajat Paharia
  • Straight Flush: The True Story of Six College Kids Who Dealt Their Way to a Billion-Dollar Online Poker Empire and How It All Came Crashing Down, by Ben Mezrich.  Fun read, but a slight let down from Ben Mezrich’s prior works Bringing Down The House, Busting Vegas, Ugly Americans or even Rigged.
  • Youtility, Why Smart Marketing Is About Help Not Hype, by Jay Baer

Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification is a fantastic read, probably my favorite of 2013.  The book was published in late May and written by Rajat Paharia, founder of Bunchball.  It builds on the gamification theme with genuinely implementable ideas.  Loyalty 3.0 is the combination of Motivation (behavioral science), Big data, and Gamification.  It stresses intrinsic motivation over external motivation, although there are definitely appropriate uses for both.  Loyalty 3.0 discusses game mechanics (Fast Feedback, Transparency, Goals, Badges, Leveling Up, Onboarding, Competition, Collaboration, Community, and Points) using real world examples and provides a roadmap for implementing a Loyalty 3.0 game plan (Plan, Design, Build, Optimize), weaving in case studies throughout.  This book is a must read for all marketers, especially anyone interested in gamification.

A few highlights from Loyalty 3.0 are listed below:

  • Loyalty 3.0 has three major components that, when combined, are much greater than the sum of the parts: Motivation + Big Data + Gamification
  • Knowing what truly motivates people – and what doesn’t – enables us to create stronger engagement and true loyalty.
  • People often wonder why others dedicate their time and efforts such as contributing to open-source projects and writing and editing on Wikipedia for no financial gain…. Because there is a strong sense of purpose, of making a dent in the universe.
  • Gamification is not about creating games at all.  With gamification, your core experience is the centerpiece, and the gamification mechanics go around it.
  • It takes talking to fewer users than you think to find most of your problems.  “Once you talk to one user, you’re already getting valuable insights.  By the second user you’re hearing some of the same things you’ve heard before.  Beyond the second user, you increasingly hear the same things from each subsequent user so that by the time you reach the sixth user, you’re learning very little that’s new”.
  • Think with Arcs – people need beginnings and endings.
  • Put Levels and Goals on a Curve – Consider making the first few levels achievable in a fast, easy progression to get user engaged and create a sense of accomplishment and progress.  The goals and levels should then get increasingly more difficult.

 

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