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Opinion

(Un)Special Offers [video]

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Special offers can be a great way to increase loyalty among your customers but you need to be careful. Poorly timed or ill-thought offers can actually do more harm than good. Here are a few ‘special’ offers that have failed to in their aim of getting me to buy more.

The poorly timed special offer

Have you ever bought something at full price and then noticed it reduced a couple of days later? Depending on what it is and how much it costs this might not be a massive issue. After all, if you were happy with the product yesterday at the price you paid what’s the big deal? But I’m thinking now of a time when I bought a special-edition boxed hardback book from a small, independent company. In all truth I would’ve been quite happy with the ebook but I like to think of myself who supports small businesses so I preordered the special edition and paid the significantly increased price for the book. The book had been on my shelf for approximately a week when I received an email from the supplier telling me the ‘Great news!’ that they were now able to offer the special edition for 50% off. Maybe this offer was in reflection of the fact that they’d ordered too much stock, maybe they were trying to boost awareness. Whatever the motivation I was left feeling like I wish I’d bought the ebook and saved myself £40. If you must make this sort offer at the very least segment your email list so you only send it to people who haven’t bought the thing in the last week.

The ‘too many strings’ special offer

You know those cashback offers where you buy a thing and then get money back after filling in a massive form and mailing some proof of purchase somewhere? Those suck. We all know that the offer is designed to reel people in while you chuckle about the fact that a high proportion of people will either A) forget to jump through the hoops or B) get put off by having to fill something in. Also, offering the cashback by cheque is just low. It’s 2016. You know full-well that people are also likely to forget to bank the cheque. Everything about this kind of ‘special’ offer shows you only care about sales and aren’t actually interested in your customers. Don’t do it.

The ‘there’ll be another along soon’ special offer

By pushing special offers to prospective clients too frequently you may actually stop them buying. By regularly discounting your products and services you start to undermine your full price items. If this is your strategy and the ‘full price’ is actually an inflated price that you’re not expecting anyone to pay then go for it, I guess. But understand that there may be people who are ready to buy just as your prices jump up again. If someone decides to buy at a certain price and then that price goes up they’re likely to hold back, especially if they know the price is likely to come down again at some point. They may be fully intending to buy from you as soon as the price merry-go-round rotates again but during this window you could lose them to a competitor who’s more consistent.

The ‘forget that we failed at that first thing and buy something new anyway’ special offer

This one is a favourite of telecoms companies. You set up an account for a single product, let’s say super-fast broadband, and then they start calling you and writing to you offering to “review your package”. What they don’t realise is that the one thing I actually want (and pay for) from them is often quite flaky. If you can’t get the core product right offering me something else is not only a waste of your time, it actually reminds me about how disappointed I am in the service I wanted in the first place. When I explain this to the sales person on the phone they invariably show little interest and rather than offer to transfer me to a relevant department who could help they push on with their ‘special offer’. This leaves me irritated and liable to go on a Tweetrant.

I’m sure there are plenty of other ways for companies to irritate me (honestly, it doesn’t take much) but I think that’ll do it for now. I guess it’s only fair for me to give an example of the sort of offer that would work on me. Let’s see…

The ‘ideal customer’ special offer

I personally believe that the best offers are those which exist for a genuine reason. For example, we offer a fixed 22% discount for registered charities. It’s not time-limited, the only condition is that you are a UK registered charity. The reason we offer this is because we love helping charities to do better online. At the same time we recognise the fact that budgets can be tight so we try to sweeten the deal even further.

The ‘package’ special offer

We also offer bundles of services at a hefty discount because we prefer to really get stuck in helping clients in a number of areas at once. Also, the more work we do for one client they less time is lost switching between different things. In reflection of the fact that this is better for us we offer a discount. It’s easy to understand why we do this so it doesn’t come across as manipulative. The point is it’s win-win.

What can you do?

Firstly you should decide whether or not you want or need to create special offers. They simply might not be right for your organisation. If you do decide to put some offers in place just remember to make them easy to understand and take advantage of. And make sure you don’t do anything to upset your existing customers.

Categories
Opinion

Toast (or how to please your customers by making them do more)

A few years ago, on a sunny Winter’s morning, I walked into the breakfast room of a B&B. At first it seemed like any other British countryside establishment, but then I noticed the toasters. Toasters, you ask? Toasters. Every table in the little dining room had its own toaster with a loaf of bread sat next to it. There was a slightly worrying extension lead configuration to host the eight or ten toasters. But after the initial confusion (and a passing thought to health and safety fire hazards) Pete and I started toasting.

Now you might be thinking that this was pretty lousy hospitality. If you’re on holiday and paying for breakfast, shouldn’t someone bring you toast and look after you? Why should you do it yourself? Although on casting furtive glances around the room and seeing other couples happily making their own toast, we shrugged our shoulders and joined in.

There are a few reasons why this highly unusually DIY toast situation was awesome. Firstly, you could butter the toast as soon as it was done and eat it while it was still hot – none of the trying to spread cold butter on cooling toast that’s been sat in the kitchen for minutes before you get it. Secondly, it was bespoke. If you liked your bread lightly toasted and just golden, you could have it. If you prefer a darker bronze, then you could do that too. You could also control the supply, if you were hungry, you could have as many slices as you wanted, without having to ask for more. If you didn’t want much, then there wasn’t wasted food. It seemed the perfect set-up.

I’m not sure if the reasons behind the toasters were to give customers exactly what they wanted, or if it was to free up time in the kitchen by not serving toast every few minutes. The proprietor seemed pretty savvy, so I’d like to think it was both. We thought it seemed like a good idea and it was actually quite fun so we enjoyed our breakfast but eventually forgot all about the unusual toast situation.

The other day, I was staring down the top of our toaster at home waiting for it to pop when I remembered the dining room full of toasters. It got me thinking, the customers were doing the labour that they were paying for, but they were happy. A quick check for the B&B on Trip Advisor shows 22 five star reviews all mentioning the table-top toasters. It seems that the pay-off for putting in a minimal amount of effort resulted in receiving an efficient and tailored service. Where else might we be able to implement this approach?

With the toast situation, only a small part of the process was given to the customers. They still received a full breakfast from the kitchen (and were not expected to do the washing up) but they had control over the extras. So I’m not suggesting that customers are made to do all of the work that they are paying for, but there seems to be an opportunity to let them get involved and take on some actions that result in benefits for the customer and suppliers.

Are there any parts of your online service that you could hand over to your customers? Are there any processes that take up your time that would be easy for your customers to do themselves? What could you achieve with the extra time you’d save? Would your customers actually be happier to do some work themselves if they see a real benefit? Food for thought.

Categories
Opinion

Lessons I learned from the design of the NES

This week I was in the rare position to be able to learn about the design of the Nintendo Famicom (that’s the NES to us Westerners) from its designer Masayuki Uemura. He spoke for a couple of hours at The National Videogame Arcade run by GameCity in Nottingham. It was a great event where we heard about design decisions, successes and failures of the Famicom from it’s inception in Japan to becoming a global phenomenon.

What follows are the lessons that stood out to me as important for anyone in business.

Differentiation

Nintendo is an older company than you might realise. They were founded in Kyoto in 1889 and originally made playing cards before moving into traditional toys and games much later. In the early eighties Nintendo launched what would become the hugely popular Game and Watch line of LCD handheld games. There were plenty of these types of games available from other manufacturers but Nintendo did something different. Where most of the other games on the Japanese market tried to emulate the success of games like Space Invaders Nintendo made games around what would become iconic characters. The created Donkey Kong and Mario and produced games with characters licensed from Disney. Their games stood out in the market and this differentiation lead to huge sales.

Beware of false economy

After the success of Game and Watch Nintendo started working on the home console that would become the Famicom. They were expanding into a new market so wanted to keep costs down. One of the ways they did this was to hardwire the two controllers directly into the body of the console meaning they couldn’t be unplugged or replaced by players. This saved a small amount of money as fewer components were needed in manufacture. This decision was made after rigorous testing of the buttons which found the controllers could withstand over 10 million button presses. But the testing made assumptions about how gamers would press the buttons without finding out how they would actually use the pads. Nintendo realised their mistake when they started receiving consoles returned due to faulty controllers. After investigation they found that people were pressing the buttons slightly diagonally rather than straight down from directly above. This seemingly insignificant difference resulted in a 10% failure rate and as the controllers were not replaceable this meant huge numbers of consoles were returned. A costly mistake that could have been avoided by either not trying to cut corners or testing in a real world situation rather than a lab.

You may be unaware who the true audience is for your product

Along with the Famicom Nintendo created various accessories, one of which was the Family Basic Keyboard. This was intended to help children learn to program at home. When Nintendo started getting lots of calls from children on behalf of their parents they discovered that adults were using the Family Basic Keyboard as a practice device for the word processors that were being introduced into Japanese offices at the time. Apparently children weren’t actually that interested in the keyboard.

Failure can lead to expansion

Nintendo set itself a sales target for the Famicom of one million units within six months. Unfortunately only 440,000 sales were made in the first year after launch. This lead to an evaluation of the US market to see whether the product might perform any better over there. The short story is: it did. In total Nintendo sold around 34 million units in the United States. Had they hit their original Japanese sales targets they may never have entered the American market. Or they may have been less careful about how they launched which could have reduced their success. More on that below.

Test the water with a soft launch

To gauge how Americans would react to the Famicom games Nintendo created an arcade cabinet called the Nintendo VS System. While it looked like a traditional arcade machine it was really just a Famicom, two joysticks and a screen in a big box. The VS System was introduced into American video game arcades to assess the popularity of games. When it became clear America was enjoying the games Nintendo had already created they decided the time was right to launch the home console into its new market.

Tweak your offering for new markets

After missing the target at home in Japan Nintendo wanted to make sure the American launch of the Famicom was a greater success. They redesigned the console physically to resemble a VCR as these were hugely popular in American houses of the time. Having learned their lesson on the false economy of the hardwired controllers they opted to use detachable units. The final thing to decide on was a name. ‘Famicom’ could not be used as another company was already marketing a product called the Family Computer. The name NES (Nintendo Entertainment System) was decided on just one month before launch. Another option was the ‘Nintendo Learning System’. It’s interesting to ponder whether the NES would have done as well had it been saddled with that name. My guess is that it wouldn’t.

Find out what your audience loves

The other change Nintendo made for the US market was to bundle the system with their light gun because, as Uemura told us with a smile, “America loves gun.” They also made an optional robot available to make the system “appear futuristic” and tie in with American popular culture of the time.

So after initial disappointment Nintendo went on to create one of the greatest successes in video game history. Even though they no longer occupy the same position in the market there’s a lot we can take from Nintendo’s successes and, perhaps more importantly, their failures.

Oh, and if you don’t know about the National Videogame Arcade and GameCity you should check them out, they’ve just been named as one of the UK’s most creative companies by Creative England.