Iman Jalali

In the current economy businesses everywhere are trying to drum up sales in anyway possible, most using discounts and coupons. Let’s just say I’m not a fan of discounting and coupons… as a consumer I love it, but as a business I try to avoid it at all costs. Part of it has to do with my belief that if you build a great product/service with great customer service backing it you don’t need to offer discounts and coupons to entice people to buy.

Same thinking goes into my thoughts on marketing budgets… my ideal company would have a marketing budget of $0. I want my product, my service, my employees, my brand, my company to be the marketing. There is a lot of “gray area” in that statement though… You might have a large marketing budget while you’re building up your company and there’s also a lot of things that might fall under “operational marketing” like e-mail marketing, but in my ideal company I’d have to spend no money at some point on print, web, TV or radio advertising. Customer acquisition would be organic. I rather focus on creating a better product/service or provide a better “experience” for my current customers.

Let’s go back to talking about discounts… these days most online retailers offer most of their discounts and sales offers via e-mail. That’s part of the problem… your e-mail list generally consists of customers who’ve already purchased from you and your most loyal followers. Giving them discounts isn’t the only way to entice them to buy. If you’re selling clothes online maybe when you get a new shipment in you offer it first to your e-mail list… talk it up, “Exclusive First Look”. Sometimes relevant information is all it takes to generate revenue from your e-mail list. A highly targeted, relevant e-mail blast with great information always generates revenue.

To me being discount heavy to your current customers is backwards… I believe that discounts are a great way of enticing on the fence buyers to pull the trigger, but after that it’s the job of every other aspect of your business to keep them coming back. Worst part of being discount heavy is you start to train your best customers to wait for discounts to make purchases.

Kevin Hillstrom of MineThatData has a great quote: “Discounts and promotions are our version of ‘financial weapons of mass destruction.’ They are taxes placed upon brands for being unremarkable.”

Dear Big Media,

Plain and simple, you’re acting like big bullies. The two of you on the playground that are being the most troublesome bullies right now are Warner Bros. and Viacom. Let’s start with you Warner Bros., bullying companies like Netflix and Redbox into doing what you “think” is right for business. Notably, Warner Bros. strong arming a deal with Netflix to implement a 28 day “sales only” period in which Netflix will now wait 28 days after a DVD/Blu-ray sales release before allowing customers to rent the movie. Netflix in return received streaming licensing rights to a large collection of Warner Bros. catalog. It’s a no-brainer that Netflix’s business model is shifting focus from physical media rental to online streaming and the movie studios know this. The studio heads think that by implementing this “sales only” period they’ll increase the sales of physical DVD’s, highly more profitable to studios than movie rentals. One problem… it’s a horrible idea. Thanks for making piracy look better and better everyday. Making people wait 28 days before renting a movie won’t make them more likely to buy, it’ll just make them more likely to pirate it.

When will the industry learn that people don’t like obstacles to accessing the content they create. We’re willing to pay for it, we understand you don’t do this for free, just make it easy for us to access it. There is a reason the iTunes store is so successful… you make it so easy to download a song, sometimes I don’t even realize how much money I’m spending, such a simple, quick process. I’ve even found myself renting movies from iTunes for $3.99 a pop just because it’s so easy and I don’t want to leave my place and walk downstairs to the Redbox.

Next bully is Viacom… Viacom this week announced that they’ll be removing all Comedy Central shows from Hulu. Hulu has quickly became the premier website for watching TV shows online, with over 40 million visitors a month. Two of the most popular shows on Hulu are “The Daily Show with John Stewart” and “The Colbert Report”, both Comedy Central/Viacom shows. From the looks of it negotiations broke down when Viacom demanded more share in the advertising revenue and Hulu couldn’t afford to do so. Typically content owners like Viacom receive 50 to 70 percent of any advertising revenue generated.

Again a horrible decision…I turn to Hulu for TV shows, because it’s user friendly, very fast content delivery and they have a wide variety of TV programming from different networks. I’m not going to seek out Comedy Central’s shows on ComedyCentral.com, instead I’ll watch something else on Hulu. I’m not sure what Hollywood is thinking, but the current thinking of pulling content away from the marketplace is not the way to go. Make content more accessible to consumers and their wallets will follow.

Sincerely,
A Viewer

P.S. Stop building around the wants of the advertisers and start building for the viewer… when you do so the advertisers will follow, I promise.

The Chicago Blackhawks recently launched a $2 scratch off ticket with the Illinois Lottery and as a Blackhawks fan I ended up picking up a few for fun. To play you first scratch off an area of the ticket to reveal the opponents score and then you scratch off the Blackhawks score. To win the Blackhawks must score more goals than the opponent and if they do you win whatever the prize is for that game. Unfortunately the way the game is setup you can expect the Blackhawks to lose game after game after game… went through three tickets, ten “games” per ticket without a win… so in a way the Blackhawks just lost thirty straight games.

This one leaves me scratching my head… is that really the best scratch off game you could come up with? #Fail

Back in July of 2009 I had the opportunity to spend a few days at Zappos headquarters and learn about every aspect of their business from hiring to VC funding and most importantly company culture. I was privileged to be invited for the very first “Zappos Insights Live Boot Camp” and can say it was probably one of my top 5 business experiences in life.

Those of you that know me well know that I’m a raving fan I am of Zappos, not just their external facing business, but also their internal business. If you’re ever in Las Vegas I highly recommend calling them up and arranging a tour of their offices. You might see a parade, a talent show, a phone being tossed in a blender… you never know what you’ll see there. You’ll leave wondering how they can possibly be making money while having so much fun. You’ll also probably leave wondering why your workplace isn’t this fun. The good part is it can be that fun, the hard part might be convincing the decision makers in your company that this is something they should try to adapt.

There were only about ten of us at the boot camp… entrepreneurs, executives and even a college student who was about to launch a very successful iPhone app. Some of us were there ready to soak in everything about Zappos and we had already been supporters of Zappos culture. There were also those who were skeptical… not believing that this could honestly be so fun, yet so productive and efficient. I learned a lot during those few days, but one of my favorite moments was seeing the non-believers turn into believers. The time we spent with Tony and Alfred soaking up every bit of knowledge is something I will never forget.

Almost every aspect of their business is very “Zappos” like… during interviews it’s common to be asked what superpower you’d want or what song should play every time you enter a room. It’s also standard business to turn down the most talented programmer, lawyer, manager or any position if they’re not a good culture fit. Would you hire someone you can’t see yourself going to get a drink with? They also do tons of training, but a lot of the training isn’t what you’d see in most other large companies. It could be a simple grammar class or a class centered around a certain book. They even have a class on how to conduct a tour of their offices. They’re always looking to promote from within and constantly educate every single employee.

I think a lot of companies today focus so much on the top line and profitability that they lose focus of what culture really means to a company. I truly believe that one of the most important factors that goes into how long your company will survive is culture. Company culture is the heart of the company… it’s the living, breathing part of your company. Your employees will make you or they will break you.

Through the last few weeks Vevo has started to show its true colors more and more. It’s becoming quite apparent that Vevo was not built for the fans, but it was built for the industry to help with the monetization of music videos that are spread on so many different content providers. Since the 80’s music videos were merely a marketing piece used to help fuel a musicians album sales, basically think of it as a TV commercial for a new show. As costs of music videos have grown into the hundreds of thousands of dollars record labels have started to consider music videos as “premium content”. While it is still considered a marketing piece to promote an album, labels are now even more interested in monetizing these videos and cashing in on the internet views of these videos.

The goal of Vevo is to basically create one funnel from which videos are provided and by controlling that funnel they can control not just the user experience, but also control all the ad sales. The ad sales is the reason why Vevo was created… it wasn’t created to be the ultimate source of music videos for the fans… the ultimate music video fan experience… it’s attempting to be the ultimate cash cow for the music industry. By providing one venue for these videos Vevo is able to charge anywhere between $25-40 CPM(cost per thousand impressions) to advertisers compared to $5-10 CPM.

If this all plays out the way Vevo CEO and President Rio Caraeff wants it to it’ll be a huge win-win for the industry(labels/artists) and Google/YouTube. Oh yeah… about those fans… um the industry blames you for their demise and you owe it to them to visit Vevo 200 times a day… I’d love to ask Mr. Caraeff a few questions about the future of Vevo… I’ve got some ideas that can make this a win for the fans as well.

I’ll leave you with something I found interesting… so Vevo had their launch party last week in NYC and Rihanna was there helping Vevo promote the launch. She also did a quick YouTube video promoting Vevo, etc… She’s on Def Jam Records, which is owned by Universal Records… who is one of the biggest owners in Vevo. Funny thing is Rihanna is launching her new video “Hard” on Thursday… premiering exclusively on MTV and all MTV online properties… that means no Vevo premiere. Who dropped the ball on that one?

Photo source: MTV.com