What World of Warcraft can teach you about customer quality

Posted by Christopher S Penn on Feb 9, 2010 in Advertising, Marketing, Money, World of Warcraft | 0 comments

One of my favorite parts of World of Warcraft is the in-game marketplace known as the Auction House. Inside the AH, you can see relatively free markets at work with minimal regulation by the game’s owners. You can especially see how market forces create supply and demand, and if you’re good at understanding human nature, you can make a fair bit of virtual money.

Right now, there’s an in-game Valentine’s Day event going on. Below is a picture of the Auction House and the price of a Buttermilk Cream chocolate. The current asking price in the marketplace is $54, and demand is so high that none are currently being sold – the marketplace is empty of this item.

Yes, $54 for a single chocolate. Suddenly the real world holiday doesn’t look quite as expensive. My character here is about to sell 3 of them for $163.

Here’s the funny part: the in-game quests needed to obtain this item take about 5 minutes, total. (dropping off a charm bracelet to another character and offering 10 characters some perfume samples) So why does the price of this chocolate seem so very high compared to the relative amount of work needed to create it? This marketplace item can teach us a lot about customer quality and behavior.

Some players may not know how to obtain it besides the marketplace. They simply buy everything in the marketplace. These, however, are long-term poor customers, because the moment they get clued in, they will stop buying from marketers and start creating their own items. True, as the old gangster saying goes, you can’t wise up a chump, but that’s not the sort of customer you’d want to rely on or build a business on.

Some players like the convenience of one-stop shopping, and will pay a premium just to be able to buy everything in one place. These are better customers because they have a persistent need (convenience). This makes them a better long-term prospective customer as they have a need that will always need to be met. The downside is that these folks are usually very price-sensitive, so a competitor who prices the same goods at even a penny less will beat you to the sale. If supply is a greater issue than demand, unless you’re always the lowest price, you won’t sell anything.

Some players just don’t like questing, period. They pay a premium in the marketplace – sometimes a very high premium – to not spend a single minute in the game doing things that aren’t fun for them. If you can provide exactly what they need, when they need it, you’ll develop a reputation in-game for being a useful sort of marketer to have around, and the kind of person who they will approach directly whenever they need to buy something. These folks will even ignore marketplace prices and just pay you obscene premiums directly because they know you’re reliable and can get them exactly what they want. It almost goes without saying that these are your very best customers in the long-term.

We have, in short, three kinds of customers – the sucker who may or may not even buy, the customer who wants convenience but is super-sensitive to price, and the premium buyer who wants to outsource everything they don’t want to do.

Which do you want as a customer? Common sense should dictate that if it’s long-term maximum profitability you’re after, you want the premium buyer. It will require more work on your part to develop reputation in your community for being the go-to marketer that has exactly what someone needs, but if you put in the time and effort in your marketplace, you can escape the always-lowest-prices race and make a ton of money.

Now, would anyone like to buy a Buttermilk Cream? Only three left…

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.

The danger of the dabbler

Posted by Christopher S Penn on Feb 8, 2010 in Awakening | 15 comments

Reading this blog post by Mr. Brogan, something bubbled up from years of martial arts training.

Chris argues that the goal is the focus, not the method. Kenpo karate is the method, kicking the other guy’s ass is the goal. If you threw out all your methods, the goals would still be there.

Well, sometimes.

There are goals which are intimately tied into methods. How you get there is part of getting there. Abandon the method every so often for what seems to be a faster, easier, cleaner, newer, better method results in you becoming a dabbler. You’re reasonably okay at a lot of things. You’re not excellent at one thing. You never actually get to your destination, because you keep changing roads, cars, outfits, maps, GPSes, traveling companions, and take every detour imaginable because it seems faster.

Ever done this? You see a traffic jam ahead, get off at the next exit, and spend 30 extra minutes on side and back roads to go around the jam… which in reality is only a 10 minute traffic jam? I have. My hand is up. Guilty. This is the dabbler. This is the person who fails too fast.

The problem with the perspective of goal, goal, goal only (which isn’t what Chris is arguing, but which a lot of people will take away) and books like Seth Godin’s The Dip is that it’s too easy to quit early. It’s too easy to give up soon, to fail fast, when in fact you may not be failing at all, but working through your own limitations.

The other day I tweeted about the Dunning-Kruger effect, in which incompetent people are so limited by their abilities and lack of competence that they don’t realize they’re incompetent. The converse, that the competent are the last to get the memo, is also true. When it comes to goal-only perspectives, here’s the thing – your lack of meta-cognitive awareness about your limitations means that if you give up all the time, if you abandon ship too fast, you will NEVER reach excellence. Ever.

This is the danger of the dabbler. Before you give up, consider whether you’re not actually generating results because the method isn’t working, or because you haven’t amassed sufficient skill yet to make the method work for you. Admitting that is hard. Admitting that means forfeiting some ego and being willing to accept that you still have work to do, you still have more time to put in to achieve excellence…

… and as the Dunning-Kruger effect proves, you may be the last to get the memo about your excellence. Keep going!

Get this and other great articles from the source at www.ChristopherSPenn.com! Want to take your conference or event to the next level? Book me to speak and get the same quality information on stage as you do on this blog.

Why you should install MY iPhone app

Posted by Christopher S Penn on Feb 5, 2010 in Awakening | 16 comments

Yes, folks, download my iPhone app! (iTunes required)

It’s got some AMAZING features that will make it stand out from every other iPhone app out there:

• It will regularly track your movements via GPS and silently upload them to my Google Earth master map, letting me watch wherever you are on the planet in real time.
• It will silently disable the airplane mode so I can track you in flight. Take that, TSA!
• On a regular basis, it will silently sync your contacts to my secret mailing list database and mark them as double opt-in with your phone’s IP address as the confirmation IP for verification purposes.
• Your phone will automatically sort through all the photos in its library and using a brand new algorithm, will mail me the most incriminating ones. As a bonus, you’ll find them all in iPhoto tagged with “blackmail”.
• Taking advantage of the iPhone’s powerful GPS and media capabilities, any time the phone detects that it’s some place important, like Congress, your bank, or your corporate headquarters, it will silently activate the microphone and camera, record everything that’s going on, and mail it to me.

Of course, all of these innovative features will happen behind the scenes, so to make sure YOU get some benefit out of my iPhone app, it will randomly display pictures of adorable kittens. Meow!

Yes, I’m joking (or am I?). That said, every time you install an app on your iPhone, you have absolutely no way of verifying the codebase or knowing what you’re putting on your phone. You don’t know what the app does behind the scenes.

If you have anything of importance on your phone, personal or corporate, think real carefully before loading it up willy-nilly  with third party applications, even ones “blessed” by Apple, Google, or others. If you don’t need it, uninstall it. Better yet, don’t install it in the first place. From time to time, back up your device, format it, and restore your data and current applications only.

Enjoy the kittens.

Enjoyed it? Please share it!

Get this and other great articles from the source at www.ChristopherSPenn.com

BBC Commentary on the news

Posted by Christopher S Penn on Feb 5, 2010 in Funny | 0 comments

Outrageously funny and sadly true.

Hat tip to Mr. Brogan.

Enjoyed it? Please share it!

Get this and other great articles from the source at www.ChristopherSPenn.com

Your ACE in the hole: Energize!

Posted by Christopher S Penn on Feb 3, 2010 in Advertising, Marketing, Public Relations, Sales | 5 comments

We talked last time about what marketing, sales, and product & service groups are supposed to manufacture. Let’s talk about the verbs that go with them, so that you have an idea if what you’re doing is in alignment with those verbs, and one verb in particular. Quick review:

• Marketing takes audience and makes qualified leads
• Sales takes qualified leads and makes customers
• Product design and customer service takes customers and makes evangelists

So let’s take a look at the verbs of this funnel. In short: ACE.

• Attract.
• Convert.
• Energize.

Attract is what marketing does. Create demand for your ideas. Attract attention to what you have to offer. Assuming it’s good, people will pursue a line of inquiry and become a qualified lead. Attract also helps filter out some stuff – is what you are doing likely to attract leads? Billboards attract eyes, but unless they’re hyperlocal (Eat at Joe’s Next Exit), their value is questionable. Are you attracting the right people? You may be getting all the buzz in the world for your event, but if no one can afford to attend it, those thousands of visitors and millions of pageviews are worthless.

Convert is what sales does. Convert puts the emotional and rational values on the table with the qualified leads, the prospects, and helps them to convince themselves that your product or service meets or exceeds their needs. Again, convert is a useful verb. Is a sales practice converting? Do you know what converts and what doesn’t convert?

Energize is what product design and customer service do. We used to call this retention, but when you think about it, retention kind of implies that your customers are fleeing your products and services. It implies they want to run away as fast as they can, and you have to pull out all the stops to keep them from doing so. No, if your product doesn’t suck and your customer service actually cares about its customers to any degree, then you’re not talking about retention as much as you are talking about energizing your customers.

• Energizing them to use the product or service to its full potential.
• Energizing them to give you unsolicited suggestions about what would make it even more rave-worthy.
• Energizing them to tell everyone who will hold still long enough about your product or service as your unpaid word of mouth marketing department.

Energize is where all your profit is, long-term. If your product sucks, it will not energize customers to do anything more than pay the bills – if that. If your service sucks, it will only energize customers to hate you, very publicly and very loudly. Energize is what will destroy the other two departments, marketing and sales, because marketing will not be able to attract audience due to your stigma in the community. Sales will not be able to overcome fear, uncertainty, and doubt in what few prospects you have. Eventually, you’ll either have to make even more ethically questionable marketing and sales choices just to keep the lights on or go out of business.

The flip side is the fun part. Products that are raveworthy and service that is insanely great means that marketing just has to get people to the web form to sign up. Marketing can clock in at 10 and clock out at 2 with an hour martini break in the middle of the day because existing customers are raving about what you’ve got and forcibly dragging friends into your showroom. Sales has to triple its manpower just to process the paperwork, and prospects need little guidance except perhaps what color ink to sign on the contract. All of this comes from energizing your product design to be great and your customer service to be the best thing anyone has ever experienced.

Unsurprisingly, energizing product design and customer service is really, really hard. You as a company must be committed at every level, in every way, to putting your customers first and foremost. Everyone from the janitor who answers the phone late at night while cleaning to the CEO must get it, must understand that the vast majority of your long-term focus must always be on doing right by the customer. The moment that you lose that focus, you lose your ACE in the hole, and until you get it back, you’re on the path of the corporate death spiral.

Attract. Convert. Energize.

Profit.

Photo credit: DotBenjamin

Enjoyed it? Please share it!

Get this and other great articles from the source at www.ChristopherSPenn.com