Profitable Choices

ocean_sunrise“So, any new revelations from your trip, sir?” I asked, pleased that I had gotten the conversation started this time.

“Eh? Sorry Watson, I was lost in thought regarding some lessons learned during these travels,” replied The Effective Detective in a way I was sure was meant to annoy me. “Each time I cruise, I am impressed with the choices the company has made to make your trip an experience while at the same time ensuring that they make money in the process.”

“In what way, sir?” I asked, curious about the direction our conversation may take.

“What they do that is a great lesson for businesses large and small is touch the emotional side of their passenger which in effect distracts said passengers’ attention from things that they must pay for that also have extremely high margins. A simple thing like a beautiful view, or a more solid example, highly attentive service, and some interesting shows, cost only marginally more than if they reduced the size of the crew or had less impressive shows,  but goes a long way towards distracting the passengers from noticing they pay for every soft drink – where the margin is fairly high; Americans especially feel that free refills are their birthright.”

“Why not do both and make even more money?” I ventured as The Detective paused.

“Bah!” spat The Detective. “A comment worthy of a know nothing MBA!” he exclaimed with obvious distaste. “The idiotic, if somewhat logical sounding, assumption that if cutting some costs is good, then cutting a lot of costs is even better! I would have expected you to have your head out of a spreadsheet, Watson,” The Detective glared at me dourly.

“Sorry sir, I was just presenting a thought,” I said meekly.

“Of course Watson. I should not have exploded so. I see and hear such stupidity so often, I sometimes speak without thinking. When you look at everything in your business as an entry in your profit and loss statement, it is easy to forget that your customers are not just results added into income, but flesh and blood beings that make decisions about your business based on their perceptions. If you take something away from them, you need to replace it with something. If they perceive a fair trade, then you have struck the correct balance. The more emotional the connection you can make, the greater the chance you have of perception of a fair trade,” The Detective took his characteristic pause.

“Which is why service is such a good choice I would assume. Since it adds a human touch to the transaction. It makes a person to person emotional connection,” I volunteered.

“Precisely Watson! In the case of our cruise ships, the more shows they provide can also make emotional connections. Ones of pleasure, or perception of value – ‘Hey I saw them in New York! Paid thirty dollars to see them too. I get to see them free on the ship!’ Yet drink prices – especially for non-alcoholic sodas are relatively high. Yet, who cares when the bartender or server smiles nicely, is prompt, and asks if you are having a great time? A great combination of service and value.

“Could they make a fraction more money by cutting back on such things? Less crew per passenger, lower quality shows? Of course. At least in the short-term. As word got around of the shortage of value, customers would bolt. The cruise line would either have to change – and for most businesses in this situation is too little too late, or cut price – which may or may not work, and at any rate defeats the whole purpose of the cost cutting exercise, ” The Detective finished.

“So give up a little here and there to make a lot more, eh sir?” I ventured, more confident in my question this time.

“Quite so, Watson. Let us move on.”

Marketing Lessons From Ancient Rome

ostia“Watson, I had the most interesting insight when visiting the former Roman port of Ostia Antica a few days ago,” began The Effective Detective, taking charge of our conversation at the start, as he has done a few times in the past.

“Former port, sir?” I asked, dreadfully ignorant of Roman and Italian history, I had no idea if Ostia Antica had become a former seaport in recent or ancient times.

“Ah, Watson, I see we need to work on your classical education,” The Detective jabbed at me, then continuing on before I could respond, “Ostia Antica was abandoned by the Romans some 1,500 years ago when the path of the river Tiber changed after some particularly bad flooding. Remarkably it has sat relatively undisturbed, and intact for centuries.”

“What caught my eye was one section of the town described as the Piazzale delle Corporazioni or Square of the Guilds. This was where the importers and exporters would ply their trade. Some of course advertising goods they had brought in, some buying goods to transport outside of Rome, and some advertising the transport of such goods. Nothing out of the ordinary you might say, being that Ostia was a port. There were two things that I found interesting and of course a lesson for today,” The Detective paused, obviously hoping I would inquire as to the content of the lesson. As always, I decided not to disappoint.

“So what was the lesson we could learn from the traders of 1,500 years ago?” I asked.

“As I said, two things that I found interesting. The first was the competition, ringing this square were 60 “booths” – for lack of a better name. Imagine slugging it out on a daily basis when your competition was not just in the same town, but physically right next to you trying to entice customers. Those merchants must have been able to express why they were better than the guy next to them with no hemming and hawing. Either you could make a concise and compelling case or your prospect moved over 15 feet to listen to another pitch. They had no choice but to be able to make their case in a matter of seconds, and make a compelling one at that. Today, how often do we hear people who expect you to listen to a message that goes on and on? Definitely something to be learned there.

“The second and even more interesting lesson was the other way that they marketed their products and services. With pictures! They knew that not all of their prospects would be literate, so they not only would spell out what they offered in Latin, but in mosaics inlaid in front of their booths. Of course they sometimes indulged in a small bit of exaggeration: showing their boats protected by Neptune himself or how they can overcome sea monsters, but I imagine like exaggerations today, such things were taken with a grain of salt by the prospective buyers. The point was they made sure that anyone coming into the square no matter what class or level they came from would understand what they offered. Simplicity of message!” The Detective concluded.

“A most fascinating history lesson, sir!” I exclaimed.

“And an exhausting one as well, Watson. It was quite the trek around Ostia. Let us continue our discussion at another time,” The Detective said, ending our conversation for the day.

Is that all there is to it?

Image courtesy of Stuart Miles /

Image courtesy of Stuart Miles /

The Mystery of The Mixed Message

“I trust you had an enjoyable Christmas sir,” I said, taking the initiative in today’s conversation.

“Quite so Watson, and I trust you had the same,” came the reply from The Effective Detective.

“Thank you sir, but something has been nagging at me since  a previous conversation regarding customer experience,” I replied, steering the conversation to the subject that had been bothering me.

“And that something would be?” asked The Detective.

“Well sir, I understand that each business has its own experience that it can define. Then it must attempt to find a market that wishes to engage in said experience. However, that cannot be the only thing that matters could it?” I queried, extremely curious to see if I had been over-thinking this.

“Ah, Watson, an excellent question, and one that I wish had your, and most likely everyone else’s, desired answer of yes. Unfortunately it is slightly more complicated, but luckily not all that more complicated.

“Woven into the experience is a little nebulous thing called value. Whilst it is critical, in fact paramount, that you find the audience that wishes to engage in your experience, you must provide one that meets their expectations for such an experience, such that they feel, for lack of a better expression, that they ‘got their money’s worth’. This is the value. Not to pick on Walmart… too much… but let us review that experience again. Cheap stuff at rock bottom prices. However, they cannot just stock the shelves with things that do not work at all, or break as soon as they come out of the box. While people do not expect the quality of a high-end purchase, they do expect something functional for the amount of money that they are spending,” The Detective explained.

“So value is quality,” I said, feeling that I understood.

“To a degree, Watson, but not the only component,” The Detective responded, with a slight smile.

“Ah, I am confused once again, what else is there?” I asked dejectedly.

“How do you attach a quality metric to a presentation, Watson? Some of the most informative speakers out there provide fantastic value, yet in a harsh evaluation of their style, they might not have delivered said information in the highest quality speech. Another example would be information products. Not all of them are packaged in the highest quality cases, with studio quality sound and/or video. Yet many provide a great experience and exceptional value to their purchasers. On the opposite end, one could put on a perfect presentation, but not provide an iota of value, which I believe in anyone’s estimation would qualify as failing.

“Value comes into play even with free giveaways and events, because nothing is truly free, we might extract an email address,  and no matter what, the end-user is giving us their time, the single most important commodity of all. Thus value and the experience are intertwined. We must provide an experience that our market desires, but it must also provide value to them!” The Detective finished with his characteristic flourish.

“A difficult concept to wrap one’s head around sir,” I replied.

“Quite.  But one must consider the return on such an investment. That, dear Watson could very well be incalculable.”