I have to tell you I am more than a little disappointed in President Obama’s decision to turn over his email list to what will be a marketing machine for the entire Democratic party, but the importance of that list emphases the value of building your own.

For the first time in history a candidate amassed a list of 13 million emails and knew how to use it to raise more money than any other candidate has ever imagined. If that wasn’t a product sale I don’t know what is. In fact, his entire campaign should be studied in marketing classes as a classic case in product marketing.

While the email list and database you create may not hit the numbers his has, it is the importance of the information itself that we want to focus on. Now, more than ever, consumers are voting with their dollars. The votes (dollars) are going to the candidates (stores and service providers) they believe in. Trust, combined with service and value are what these voters want and if you deliver it, they will come to you over your competition.

Two BizIdea points: Build your list and start now. Be loyal to your list and provide the message and benefits the members seek in the industry you serve. Do these two things and you will be rewarded as the President was.

The Tampa Bay Bucs just fired their Coach, John Gruden and General Manager Bruce Allen. This surprise move was right after awarding both men a 4-year contract extension last year.

Malcolm Glazer, the franchise President, explained that every year at the end of the season the family sits down and reviews where they are and what changes they need to make. Once they decide they make the decision.

The BizIdea Lesson: It isn’t easy to override a big decision you have made in the past; especially, when it is going to cost you big bucks and cause a stir of second guessers in the high media world of professional football. But, kudos to them for doing what they think is right. We all make decisions we later regret but the important thing to do is to not get caught up in the emotion and make the tough decision.  It is also important to note that the Glazer family makes it a point to review its business at the same time every year. I think that it’s also something to incorporate in your business. We try to review ours at the end of each year because that is as close to a season end as we have. Whatever the date you pick it can be a rewarding and important time if you are prepared to make the tough choices.

Southwest Airlines is known for its quirky fun staff, low fares and peanuts for lunch. They may have added another new idea. If you elect to check your bags curbside in Las Vegas, the friendly bag handlers loudly tell you, “thanks for the tip” if you do give them one.

The business lesson: telling someone ‘thanks” is always a good idea. I don’t know if this is a nationwide movement for Southwest or just something the Las Vegas guys thought of but it works at two levels. People are happier when they are thanked and when you hear thanks for the tip said by many people while you are waiting in line you can’t help to feel like a jerk if you aren’t fishing in your pocket looking for a tip to fork out when you check your bag. In an economy were many people are cutting back they sure are forking over the cash in Vegas.

The next time you have a training session with any of your employees that deal with your customers (even if you are your lone employee) remind them to thank your customer for their business. You may not get a tip, but over time you will be rewarded.

As our world continues to shrink, many of our clients are discovering that the ideas that make them money in local markets can be expanded to make them a small fortune in the national market.

 For years, the success of taking a good idea, systemizing, and expanding it nationally has been with us through the franchise model.  The problem with franchising in many cases is the cost of bricks-and-mortar locations where the products or services are sold.  The added expense due to considerable overhead makes profit margins frequently smaller than expected.

 Licensing is the new way ideas are monetized in today’s current environment.  The license is often centered on either a concept or a marketing plan that can be taken advantage of in many locations.  You can make money on the resale of a successful advertisement developed for your business by licensing it to businesses in other areas of the country for use in their area.

 For example, a client of ours has developed a series of television ads that are used to attract calls from people interested in selling their homes.  Whenever he runs these ads, people call in, wanting to sell their property.  Based on a preset screening criteria, he is able to qualify the seller and the property as being one that he is interested in purchasing. 

 This series of advertisements is very successful for him as a local investor.  However, because he is not interested in buying properties outside of his geographical area, he licenses the same advertising campaign to other investors throughout the country.  He shows other investors the way to use the advertisement to get the best results.  He also shows them when and where to place the ads to produce the greatest return on the dollar invested.

 From a financial standpoint, the beauty of the process is that he has very little overhead other than the original cost of putting the program together and the marketing cost to find new investors.  Once he finds an interested real estate investor, the prospect pays a license to use the advertisements, and pay him both an upfront fee and a continuing royalty.  As long as the ads continue to get a response, our client has a product that earns regular monthly income.

 In the personal training and fitness arena, many personal trainers are excellent at what they do, but are not as good at knowing how to market their services to others. Our client developed a series of marketing, letters, and promotions that produce a consistent stream of clients to personal trainers.  Trainers are an easy niche across the country because many subscribe to the same trade magazines and are members of the personal training associations.

  Our client focuses his efforts on finding these personal trainers and selling them his successful marketing system.  As in our first example, the client sells the system through a licensed program, which gives him an upfront fee as well as a monthly residual income for the continued use of the system.  If the trainer stops paying the monthly continuity fee to our client, the trainer is barred from using the marketing system, and our client resells the territory to another fitness instructor.

 Think about it for a moment: What idea, marketing plan, or business system do you successfully run in your local area that could be duplicated in any other city in America?  If you have such a program, now is the time to take advantage of it before someone else sells the same idea to others.  You may, at this very moment, have a fortune lying at your feet!

While the news talks about falling consumer confidence, there is one area of the economy that is going strong, and that is the affluent end of the market. People in this class have money and they are willing to spend it to get the “best” and to show that they have the money to afford the best.

To take advantage of this growing trend and growing number of people in the affluent class, you should consider adding or developing a premium product or service to your business. Now, before you say, “This doesn’t apply to me,” let me hasten to add that premiumization can be found in all businesses. True, you may have to be a little more creative in some businesses to segment your product or service, but the added profits are worth it. In most scenarios, premium products have higher gross margins and buyers tend to stay with you longer if you match the premium product or serve with a continuity income program (recurring fees). The reason the affluent stay with you longer is because the price is not a factor in their decision making process. What they are interested in is the status they are gaining, be it real or imaginary.

Here are some examples of premiumized products and services:

· Water: No, we are not talking about regular Evian or Perrier; we are talking mega high-end water.

o Evian’s limited-release Palace Bottle, which is only available in high-end bars and restaurants sells for $15 to $20 a bottle and has a stainless steel coaster and a cool shape.

o Bling H20 is bottled water that comes in limited-edition, corked, 750 ml frosted glass bottles, embellished with Swarovski crystals.

o Tasmanian Rain is captured “on the pristine Northwest coast of the island of Tasmania, Australia.” The water is collected “just minutes from where the World Meteorological Organization records the world’s purest air.” The water never touches the ground so that seems to make it better.

o Carlsberg 900 was introduced this summer in Sweden. Carlsberg 900 is “brewed from refined virgin hops and selected crystal malt, and triple filtered with a longer cooler fermentation process to ensure a pure, delicate taste.” It is priced about the same as Champaign.

· Luxury marshmallows: From Dean & DeLuca’s one-pound Boulé Marshmallow sampler of lemon chiffon, passion fruit, vanilla and rose-petal flavors ($28) to Pete’s Gourmet dipped marshmallows, which are $1 each.

· Honey: New varieties are being imported from China and Argentina along with blends from many sources. Since honey’s flavor and color are determined by the source of nectar, there is a huge variety of local and exclusive types of honey, with floral sources varying from tupelo gum tree and Tasmanian leatherwood to cranberry and orange blossom. The Savannah Bee Company, for example, sells its honeycomb jars with this awe-inspiring description: “Filled with honey equaling the life’s work of two bees, each golden cell brims with the concentrated nectar of thousands of rare and remote Georgia flowers.”

· Chocolate: Chocolate companies are now charging top-dollar for wasabi-infused bonbons from San Francisco to Singapore.

While the food and beverage sector definitely leads the premiumization trend, there’s much more going on:

· The Hasbro FurReal Friends Butterscotch Pony seeks to “fulfill every little girl’s dream of having her very own pony.” From Hasbro, “Butterscotch is a miniature Shetland pony, with a fur coat and mane that feel just like a real pony. Butterscotch also has built-in sensors all over her body, which enable her to respond to children in lifelike ways. If talked to, she will cock her head toward the speaker quizzically and blink her eyes. She will also react to petting, showing her enjoyment by rubbing her head against a child, twitching her ears, and swishing her tail. At over three feet tall, Butterscotch is more than strong enough to support a rider up to 80 pounds in weight.”

· Toilet Paper is making its entry into the premium market by Renova selling its Renova Black, promoted as the first fashionable toilet paper. The toilet paper is priced at about $5 per roll. Renova Black is also available as Renova Red, Renova Orange and Renova Green.

· Air travel is hot for premiumizing its product. We are not talking just the first-class seats but true flying “apartments.” Airlines like Emirates with first-class private suites, Singapore Airlines with 12 suites on board each new Airbus 380 and Jet Airways’ Sutie in the Sky have taken first-class to new levels. You have to see these suites.

· Airline terminals are catching the premium bug as more passengers want to escape the masses and flue de jour that may be flying around. First-class terminals are being created to make life (and layovers) a little easier. Cost is going up, but so are services and convenience.

· Hauzen is Samsung’s new premium home appliance brand. Products include a washing machine, Kimchi Cooler (if you have to ask, don’t worry, you won’t like it!), refrigerator and air conditioning systems.

· Baby furniture. Combining functionality with style, not only do the next generation of parents want their babies to be comfortable, they want them to get used to style. Everything in this product area is being premiumized from strollers to cribs and rocking chairs.

· Lenovo now offers the ThinkPad Reserve Edition Laptop, encased in leather. The Reserve Edition has some decent enough stats, but the real interesting spin is that it is being sold by invitation only. Invitations increase premiumization and selectivity and, of course, exclusiveness.

And just in case you have not been convinced that all categories can be premiumized, we saved the best for last.

· Car Radiators. A British company, Feature Radiators, now produces, “The best contemporary designer radiators (including stainless steel radiators), traditional cast iron radiators, electric radiators and towel rails on the market. With over 150 radiators on display in our showroom, expert advice, unrivalled customer service and nationwide delivery, Feature Radiators has been recognized as the UK’s leading radiator specialist.” You will be happy to note their radiators are available in classic white and silver metallic.

Admittedly, we have tried to take a little extra time and give you some of the more interesting types of products and services that are moving into the premium category. We hope we have been successful in convincing you that this trend is growing both here in the United States and throughout the world. By taking the time to analyze your own product or service line up, you have the opportunity to boost your revenues and or profit margins by adding a premium product or service to your lineup.

Most businesses focus their attention on the products that they offer.  What do they look like? What is the design? What is the best price we should offer it for? But these are questions everyone asks.  This is true not only when you are developing a new product, but as you continue to market old ones.

 

More important than the product itself, however, is the system that surrounds the product.  When Apple began to consider the development of digital MP3 players, there were many competitive products in that space.  In fact, Sony should have been the hands-down leader in the marketplace. What the businesses that offered digital players were not focusing on was that it wasn’t just the ability to play music that customers were interested in, nor was  another digital player the real opportunity in the marketplace. 

 

The real problem with digital music was the overall difficulty in managing one’s own music.  The producers of digital players were thinking about the hardware, not the real problem.  They should’ve been thinking about the overall system.  MP3 owners had trouble locating, buying, downloading and managing their music library.  The unique thing that Apple did, in order to make the iPod so successful, was to integrate all of the music management operations into one easy–to-use system.  Yes, the iPod was cool looking and the presentation for it was modern and hip, but the product wasn’t just the iPod.  The product was the whole system: the iPod, iTunes and even the integration of all of the tools within the Mac itself. Where the other MP3 player producers had seen a unique new piece of hardware in which they could have a competitive MP3 product, Apple saw the big picture — creating the music system around the product.

 

The concept of system creation is certainly not new.  The very essence of the franchise industry is centered on the process of designing easy to use systems that anyone can follow.  The story of McDonald’s is a prime illustrator of the theory of system success.

 

McDonald’s wasn’t the first seller of hamburgers or milkshakes.  However, what Ray Kroc did that others had not done before him was to create a system that allowed the different operators to deliver to the consumer the exact same product, no matter who was cooking the hamburger or shaking the milkshake. The result today, based on the initial design of a system and the perfection of that system, is the reality of thousands of McDonald’s throughout the world.  Amazingly, because of the system you can go into any McDonald’s, wherever you are and the consistency of the products will always be the same.  McDonald’s may not make the best hamburger, but they do have one of the most consistent systems in business history.

 

These two examples highlight the theory that great success is more attributed to the system delivering the product than it is to the product itself.  As a business owner, you should establish a specific methodology within your own organization to periodically review products and ask yourself the question,  “How can I create a standardized system that effectively markets and delivers this product over and over in a successful fashion?”  This doesn’t mean that you run out tomorrow and change all of your marketing and sales processes.  If you do, you will probably face disaster.  Instead, look at some of your products that may be underperforming and begin to make changes to create a marketing and sales process that constantly delivers the same product in a manner that gives your customer new benefits that they want.

 

The other opportunity for each of us in business is to take a broader look at the marketplace we are in, to see if there are other products that we could add to our mix that would be better delivered to the consumer with a system.  Let’s look at the pizza industry for an example.

 

 There have been many changes over the years to the pizza industry as it grew from mom-and-pop restaurants serving pizza to the major chains of today.  In many cases, these chains became successful because they created systems that were attractive to the consumer.  Many years ago, Domino’s bought market share from the mom-and-pop restaurants as well as chains such as Pizza Hut by delivering pizza in 30 minutes or less, or it was free. In this case it was not the pizza that was changed; it was the system surrounding the product that was altered.  If we revisit the pizza industry today, we see that there is little distinguishing one pizza offering from another.  While there may not be a great opportunity to make a new pizza that is more attractive to the consumer than the ones being offered, there is probably another opportunity for the system surrounding the pizza.

 

One such example can be found in a restaurant called Diana’s Gourmet Pizzeria.  Diana takes aim at several standards of delivering pizza to the consumer and creates a new type of system around it in the process.  First, she introduces the concept of “personality” into the system.  Diana promotes herself as well as the pizza.   She adds personality to the pizza and by doing so carves out a position that makes competition difficult.  Yes, you can buy pizza, but the only place you can buy Diana Coutu’s pizza is at Diana’s Gourmet Pizzeria. Diana even offers a simple but effective guarantee to pizza, “You’ll love our pizza or it’s free.” 

 

In addition to the personality Diana has injected into the pizza industry, she has also added other unique marketing ideas to her system.  Diana offers membership levels and royalty rewards programs.  For example, if you are in a silver membership plan you pay $25 a month, but you get $30 in credit each month to order pizza, gold members pay $50 a month and get $65 a month in pizza and platinum members pay $100 a month and get $130 a month worth of pizza.  Additionally, if you are a platinum member, you get exclusive access to a private telephone number that no one else gets that gives your call priority access and bypasses the regular queue system.  Most importantly, your order is moved to the front of the line, ahead of all other orders.  If you have ever waited for your pizza order to be taken and processed, you know that this is one area of the system that many people will love.

 

Diana also takes her pizza system to a new level by writing a monthly newsletter called The Pizza Press that is delivered to her customers and prospects.  The newsletter adds the personality of Diana and her family, while at the same time gives advice about pizza and the all-important coupons. I predict it won’t be long before someone takes note of the unique system  Diana has created to deliver product and takes it worldwide.

 

The next time you think about adding any product or service to your business, think about a unique system to structure around the product that delivers it in a manner that is both unique and beneficial to your customer.  If you create a system, you will find that leveraging the product is easier and the opportunities for rapid growth of the product are dramatically increased.

 

 

Sam Zell, is a multibillionaire.  He made most of his money in real estate investments and is considered a big time entrepreneur.

Mr. Zell’s latest big move was to take control of the Tribune Company by taking it private.  The stock of the public company had recently taken substantial price falls as most newspaper companies have.  The investing public believes that newspapers are a dying breed but Mr. Zell sees opportunities.

This past week, Mr. Zell came down to speak to the Orlando Sentinel (owned by the Tribune) employees in the middle of their corporate parking lot.  He told the employees that he wanted to create a corporate culture based on entrepreneurial rewards providing the benefits to those who contribute ideas that build your profits.  “My head is focused on the future,” Mr. Zell told the employees “it does not turn 180°.”

During his speech to his new troops, Mr. Zell said the company would reward success.  He set up his new company through an employee stock ownership plan. Although he maintains a large amount of Tribune stock and the right to buy more, he clearly has intent on rewarding the employees.

The interesting point to all of this is the lesson it teaches us.  Here, is an experienced entrepreneur in the real estate business looking at another industry and seeing great opportunity in what many believe is a dying industry.  It is a solid example of someone who sees opportunity when others merely see problems.  This has always been the assets of of successful entrepreneurs..  While this is an example on a very large scale,  the lesson applies to all of our businesses.  We must constantly be on the lookout for un-performing products or services, and consider how they can be altered or rejuvenated to increase our bottom line.  It is, as always, the fortune at our feet that we must not overlook.

It seems as though it has gotten to be that every time you go to a business meeting someone wants to whip out a Non Disclosure Agreement (NDA), and ask you to sign it. Don’t! Having said that we know that from a practical standpoint there will be times where you will sign an NDA in order to move forward in a potential joint venture or other type of transaction. If you find yourself faced with that uncomfortable position, at least take the time to read the NDA you are presented before you sign it, because not all NDA’s are alike. Just for fun I started collecting and comparing different ones people gave out and was amazed by some of the differences.

One of the most far-reaching NDA’s is the one that contains a non- compete clause. Amazingly, this is getting more frequent because people are using other people’s forms that contain the non-compete language and once it gets into circulation it is harder to stop. At a minimum, you want to strike the Non-compete part of the NDA. It is one thing to agree not to disclose information you are getting that you have no prior knowledge about, but it is quite another for the other party to try and stop you from competing with them if negotiations don’t run well. In most cases you wouldn’t sign a non- compete without very careful negotiations on language about territory and duration…yet in a weak moment you might sign away your ability to compete just because someone hands you what looks like a “standard” NDA. In fact, make it a point that anytime someone hands you a document and says, “its ok its just a standard NDA” (or another type of contract for that matter) make it a point to put yourself on red alert. The issue is always “whose standard” (likely theirs) and that’s the problem.

Before you sign anyone’s NDA, make sure you review it carefully to make sure the only thing you are agreeing to is not to “reveal the information you are about to receive to others if you did not already have that information or that it was otherwise not available from another source”. This normally is said in about three paragraphs instead of one short sentence, but that is the essence of all someone should need from you. If you give the opposing party more rights than that, you could have a problem if you decide to do a separate business deal with someone else in a business that is even similar to the company that you signed the NDA with. Another option you can exercise when someone offers you an NDA is to just take the position that you don’t sign NDAs. This is easier to do if you are the have the upper hand in a negotiation and you have lots of people wanting to work with you, but several of our clients have taken this position and don’t budge. You might miss seeing some new and exciting stuff if you take this position, or the other side may just decide not to force you to sign after all. Naturally, you could always change your mind if they tell you they won’t move forward without it. Some people think it is weak to change your mind when you are negotiating but we choose to believe it is just part of the process and you haven’t given up anything at all.

Naturally, we would be remiss as lawyers if we didn’t say, “But On the other hand” (as lawyers always do), and say to you that when the tables are reversed and you are the one handing out the NDA for others to sign, make it as strong as you can. In some cases you may want to have non-compete language and even a non-disparagement provision so people don’t bad mouth you. Getting beat up on the internet by people saying bad and untrue things about you is a problem these days because some of the comments last forever on the web and hurt you with potential new business. You can start with NDAs, but be sure to keep the non-disparagement provision in mind whenever you are drafting any agreement,. What we have tried to do in this article is raise the issues and concerns about NDAs. Spend a few moments thinking about them and plan mentally what you are going to do the next time someone hands you one and asks you to sign it. Planning ahead mentally will keep you from being caught off guard. Now that you know what to expect you can react according to your own advantage and not someone else’s.

Coming home from work today, I decide to stop off at the store to pick up a bottle of wine for diner. The store is located on a convenient less traveled route home but in what is generally considered a rough area of town. The liquor store was busy and I was  talking with the people around me as is frequently my custom when one of the men in line buying his brew turned to look me up and down a little questioningly.

“You been around long,” he stated in a tone that made me unsure whether he was asking, telling or suggesting I might have been around too long.  I acknowledge that I had.

“What’s this recession mean,” he asked me dead serious.

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Ok, from the beginning I will admit that I don’t always get along with Banks, but this really frosts me.

I get my credit card statement in the mail and happen to look at the current interest rate being charged … 30.24 %!

“You’ve got to be kidding me,” I said not just to myself but anyone in reasonable earshot.

Naturally, I grabbed the phone (hitting the speaker button because I knew I would be on hold for awhile) and settled in for another confrontation with my credit card company.

“30.24%,” the voice from the other end of the phone finally mused after keeping me on hold for the obligatory 10 minutes. “Well, you have been a good customer for over 20 years, I can probably get that down a little for you… how about 9.25%?” the voice suggested quickly adding, “And I can take off your annual fee, how about that?” as if I wouldn’t agree.

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