Category: strategy

‘Oh, by the way’…pricing & fuel surcharges

Posted on by Steve Sammartino

The latest trick of many airlines is to segregate elements of their product cost

 

–        Introducing the “Fuel Surcharge”

 

Apparently this provides pricing transparency. Thanks Mr Airline, but we know the price of oil is rising. 

 

 

Isn’t fuel a fundamental input cost for airlines? (30%)

Do they think we care what their input costs are?

Do they realize that we’d rather the total price – no tricks?

Do they know it reduces ‘trust’ in their brand and industry?

 

And just to show my total disdain for fragmented and aggregated pricing here’s a few questions I’d like to propose to the airline Industry:

 

Does Nike have a shoe lace surcharge?

Does Ford charge extra for the steering wheel?

Does Coke have an aluminum can surcharge?

Does Nokia charge extra for the buttons on the cell phone?

 

Fuel is not an ‘optional extra’. So work it out, include it and charge us a price. That’s what business is…. Businesses are meant to be working this stuff out to reduce the complexity in our lives. That’s what business does.

 

No wonder airlines have the highest business failure rate of any industry, and the worst profitability of any Industry in history. (which by the way is a net negative over the past 100 years)

 

Start up blog says: Consumers hate ‘Oh, by the way’ charges. Avoid them at all costs.

Bono says

Posted on by Steve Sammartino

Circa 1992 on MTV across 4 big, no 4 massive TV screens U2 lead singer Bono was asked what ‘Zoo TV’ was all about. His reply:

 

“It’s about the chaos of choice.” Poignant.

 

Start ups ought listen to Bono – and avoid the chaos. 

 

Innovation is quite forgiving

Posted on by Steve Sammartino

All twitter users know that it’s not the most reliable website out there. At the time of this post, it’s currently ‘down’ and gives you the message below:

 

 

2 things:

 

1.      They told us about it before hand.

2.      We forgive it, because we love it.

 

If you’re a ‘me too’, chances are your customers would be less forgiving. If you’re a new killer app, service or widget then the lesson is simple: Innovation is quite forgiving.

 

Launch now – improve later.

What exit strategy?

Posted on by Steve Sammartino

I once said that “investors only ever get married with divorce in mind”. In fact, it’s often the most popular question at most start up events. “What’s your exit strategy?”

 

At the Hive event last week, local entrepreneur Simon Crowe of Grill’d  had a refreshingly alternative view: He doesn’t have one.

 

  

 

What Simon wants to do is build a profitable business which grows beyond him. One which can operate without him. Simon gets it.

 

Here’s some advice all young entrepreneurs should heed. Because when you can achieve the above you don’t need an ‘exit’, you have ‘options’.

Barenaked Ladies embrace new world

Posted on by Steve Sammartino

Here’s an example of an organization who’ve embraced the new world to absolute advantage.

 

Rock band the Barenaked Ladies, achieved a reasonable level of commercial success in the late 1990’s and early 2000’s. A song of theirs you may know is ‘One week’ – you can click here to watch it and jig your memory.

 

Their success enabled them to do what most bands can’t – secure a record deal with the large record label Warner. But in 2003 they sacked them. They thought they could a better job – and they have. They just cut out the middle man and began to have a direct relationship with their passionate fans.

 

Here’s some of the cool stuff they’ve done:

They have a ‘dynamic’ websites & myspace– not static pages

They blog ‘daily’

They include fans in ‘every’ film clip

They built a permission database

They provide ‘free’ downloads of their music

Allow ‘free’ sharing of their music (Youtube / File sharing)

They sell their records direct and collect all revenue

They have ‘band days’ and ‘invite only concerts’

They provide photos of the days events

They run cruiseship holidays for fans

(Yep, 300 of their fans socializing, eating, relaxing with them for a week or so, where they provide the entertainment for them every night)

 

 

The net result is this. Their fans feel like they have a real connection, which they do. Their revenue per album sold is now approx $6.00 to the Barenaked Ladies, versus the previous $1.00 while with Warner. They have pure creative control of their work and don’t have to worry about being dropped by their record label.

 

Their site link is here: http://www.bnlmusic.com/default2.asp

 

Kudos BNL.

Ahead of their time

Posted on by Steve Sammartino

Here’s a meme from the Cluetrain Manifesto guys.  It was written some 9 years ago and still rings true. The predictions herein are still evolving today, and yet some corporations still haven’t got it.

Start ups out there; invest 5 minutes with the ideas below, embrace them and you’ll be well ahead of the game.

[slideshare id=7027&doc=cluetrain-28722&w=425]

This blog is bias

Posted on by Steve Sammartino

This blog is full of contradictions. Mainly because we must embrace the many contradictions our market place constantly presents us. So when you read them remember its all about context.

 

But in the spirit of symmetry here’s a few contradictions you’ll never find:

 

Bias for doing over planning 

Bias for speed over perfection 

Bias for niche over mass market 

Bias for authenticity over spin 

Bias for passion over ability

 

It pays to have a bias for what you stand for.