#56/111: Permission Marketing

What is it about?

How do you advertise? Seth Godin differentiates between interruption marketing (e.g. banner ads, TV ads, magazine ads) and permission marketing (sending information directly to people who accepted to send your information).

What can I learn?

Leverage interruption marketing: Permission marketing is often a bit mis-defined. It’s not about stopping your advertising, it’s about using it better. You have basically two options in advertising: a) You try to make a sale directly or b) You try to get the permission to give them more information. Seth recommends b) because it’s a less expensive step for your prospect (giving away their email vs. giving away twenty bucks) and you have a less expensive channel for frequent information (sending emails vs. buying magazine/tv ads).

Build trust: After the first step is done, it’s time to nurture your prospects. If you aren’t a big brand, you probably want to build trust first. Send them some relevant information: Articles, Top X Lists, How-to instructions, etc. After some time, you can sprinkle advertising in your emails. However, if you actually sold to them, don’t stop providing relevant information. This will increase your customer lifetime value.

Conclusion

At first, I was a bit unsure about actually reading this book, because I read Purple Cow by Seth Godin and wasn’t really impressed. Though, this book is impressive. Seth Godin wrote it in 1997 and it was incredible visionary. Today, it is unsurprisingly a bit outdated though the basics are still useful.

#55/111: Influence

What is it about?

What influences your decisions? What have citizens’ action committee and Chinese communists in common? Robert B. Cialdini writes about different studies which analyzed how people’s decisions are influenced.

What can I learn?

Rejection-then-retreat: This technique is often applied. You request something greater to get a smaller thing done. Let’s imagine that you sell dining tables. You could take your customer to the cheapest table in the hope that he will buy that, at least. Or you could take him to the most expensive, which he will probably reject and then move to cheaper ones. Not really surprisingly the second approach works far better. However, it is surprising that your customer will also be more satisfied because you retreated.

Lowballing: This is an interesting technique outside of business, where it is probably illegal. Cialdini talks about an experiment where citizen signed for an initiative to make their city prettier. Some weeks later they were asked if they would offer their garden to place a huge sign saying “please drive slower for your own safety”. Many more people accepted who signed for the initiative than those who didn’t. Why? Signing the initiative shifted their self-perception to being a responsible citizen. More interesting, the Chinese communists used the same technique for prisoners in the Korean war.

Social proof: This one is relatively well-known. Cialdini quotes a statistics that says that about 95% of all people are followers, i.e. if they see that most people use a product, they will also use it. If you take a step further and apply scarcity it will become more interesting. So, we got a product that people want but there isn’t enough for everybody. The triggered response will probably to buy the product as fast as possible.

Conclusion

What a great book! There are lots of insights and awesome stories, raging from door-to-door sales people to Chinese communists in war to a doomsday cult which was infiltrated by two psychology professors. If you haven’t read this book yet, go to Amazon, your next bookstore or the next library and read it! Recommendation!

Startups Lessons Not Learned or Lame Startup Thinking (via 24 Ways to Start)

What is it about?
Mike Butcher, TechCrunch Europe Editor, writes about lame startup thinking (in Europe). In my experience there is so much truth in this article, it’s a must read.

What can I learn?

Learn about money: Firstly, do you really need outside money? If you don’t want to put most of your money into the idea don’t bother asking other people. If you will need money you should know how much. Furthermore, if you look for angels, look for angels who can help you build your network. Before pitching these investors ideally you should have build some mock-ups or better a product or ideally a product with customers and revenue.

Your company is your product: Don’t outsource your core competency. Do not do it. If you aren’t a product person look for a person how is and make them CEO or learn the stuff for yourself. You should iterate your product and test it often. What do your customer think? How is the user experience?

Startups Lessons Not Learned or Lame Startup Thinking | 24 Ways To Start