Square Watermelons?

Square_melons
Thanks to Guy Kawasaki for pointing us to this story from Dave Knox’s Hard Knox Life blog

It seems that Japanese grocery stores had a problem selling watermelons.  It’s not that the Japanese don’t like the melons.  They do.  The problem was that both grocery stores and refrigerators are smaller in Japan making it hard for retailers and consumers to store them.

Some local farmers took on the challenge of coming up with a more practical fruit.  Their solution, while they’re still on the vine, put each melon in a box.  As the fruit grows, it takes on the shape of the box, growing up to be a cube-shaped melon. 

Many people might assume that a watermelon cube is an impossibility.  Others might launch a multi-million dollar plan to genetically re-engineer the fruit into something easier to store and ship.  As it turns out, the solution wasn’t just possible, it was very simple and inexpensive.  Yet Japanese consumers are paying a premium for the new, improved melons.

Knox lists five tips for successful innovation:

  1. Don’t assume.  Many things that were once thought to be impossible are now common.
  2. Question habits. "We’ve always done it this way" almost never justifies anything.
  3. Be creative. Some of us are more creative than others, but we all have the ability to create.  It just takes practice and perseverance.
  4. Look for a better way.  Sound familiar?  See Tacony Corporation’s mission statement on the left.
  5. Impossibilities often aren’t.  Similar to number one.  We all do things every day that were once thought to be impossible.   A phone in your pocket?  Send and receive email from a computer the size of a paperback book from the local coffee shop with no wires?  A television that’s five feet across and only a few inches thick?  A woman and an African-American running for president?  The list goes on and on.

Is there anything  you can add to Knox’s list?

Affording Health Care

No one can argue that the cost of health care (and gasoline, and heating oil, and natural gas, and bread, and beer, and on and on and on) is getting out of hand. Health care costs are expected to rise 10% in 2008. Yet, if a small business is going to compete with the big companies for the best employees, you have to find a way to provide it.  Here are some good tips from the Wall Street Journal Online.

Some insurers are offering discounts for healthy living.  Statistically, people who live healthy lifestyles don’t get sick as often.  Screenings for cholesterol and programs to quit smoking should result in lower health care costs, but the programs themselves can be too expensive for a small business.  Some insurers are providing these services at no charge and passing the savings on medical expenses along to the employer.

There are even some wellness programs that are available online.
  One company, My Wellchoice+ has a web site where employees can find advice on nutrition and meal planning and fitness plans.  The cost is about $3.00 per month per employee.  Alt Benefit Consultants, Inc. is another company that provides a similar plan as part of its health insurance programs.  Some programs even provide incentives for employees who use them.

Many companies, including Tacony Corporation, encourage their emloyees to take advantage of flexible-spending accounts, where the employee can set aside pre-tax dollars to be used for health-care costs that aren’t covered by insurance.  The problem, as with most government programs, is the paperwork.  Some companies are now providing debit cards that make flex-spending plans easier to administer.  The cards usually cost from $1.00 to $2.00 per month.

Health Advocates
, Inc. of Plymouth Meeting, PA provides health advisory service to small and mid-sized companies.  Employees can phone an advisor with questions about claims, options for treatment, and other insurance-related issues.  The cost?  $1.50-$5.00 per employee per month.

The article goes on to list some other options and offers links to some other health insurance articles.

Without the Chairs It’s Just a $5.00 Cup of Coffee

Cappuccino_machine
Jay Ehret at The Marketing Spot has an interesting take today on Starbucks’ efforts to regain some of their past glory by introducing new products including lemonade and the "perfect frappuccino".   As Jay points out, product differentiation wasn’t the key to Starbucks’ success in the first place and it still isn’t.

Face it, there’s nothing Starbucks can do to a cup of coffee, a glass of lemonade, or any other product that can’t be copied by a competitor.  It’s the "Starbucks experience" that brings the customers in and allows them to charge five bucks for an eighty-nine cent cup of coffee.  It’s the ambience of the store, the cushy chairs, the background music, the wi-fi, the snob appeal of the trendy coffee drinks that bring the customers in, not the coffee.  In fact, many coffee purists will tell you that Starbucks’ coffee isn’t that great.

Michael Gerber tells us in "The E-Myth Revisited" that every business needs a system, a way of running the business that’s repeatable, no matter who’s there to run it.  Every single french fry in every Mc Donald’s restaurant tastes exactly the same every time.  That’s what makes the franchise work.  It’s also what makes it impossible for Mc Donald’s to ever serve a great meal.  You always get a good meal.  You always get the same meal.  But you never get a great meal.  Standardization is the enemy of greatness when it comes to food.  If you want a great burger or a great cup of coffee, your best bet is an independent restaurant or coffee shop.

So, what’s the lesson here?  The way to make any business stand out is to provide an outstanding experience.  Good products and service are no longer a way to stand out.  Today’s customers expect that.  They won’t settle for anything less.  To be their favorite store, the one they brag about to their friends, you have to deliver an outstanding experience-a "WOW!" experience-an experience that they can’t wait to share with their friends.

See also:

"Are You a Great Leader?"

"Starbucks Trivia"

"Value Pricing"

Free Online Courses from the SBA

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Sba Wow!  Two government posts in a row!

"WASHINGTON ─ The U.S.
Small Business Administration
has introduced two new free online finance
courses to help small business owners with the basic principles of finance and
borrowing. 

 

The new self-paced courses, Finance Primer: Guide to
SBA’s Loan Guaranty Programs
at http://app1.sba.gov/sbtn/registration/index.cfm?CourseId=29
and How to Prepare a Loan Package at http://app1.sba.gov/sbtn/registration/index.cfm?CourseId=28,
walk business owners through steps that answer questions about what debt
financing is, what loan programs are available, what small businesses should
know about borrowing money, how to prepare a loan package and how loan requests
are reviewed by lenders."

Each of the online courses takes about a half an hour to complete and you can earn a lovely certificate to hang over your mantle.  The SBA offers more than 26 free online courses through the Small Business Training Network.

IRS Raises Standard Mileage Rate for the Rest of 2008

WASHINGTON — The Internal Revenue Service today announced an
increase in the optional standard mileage rates for the final six
months of 2008. Taxpayers may use the optional standard rates to
calculate the deductible costs of operating an automobile for business,
charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles
driven from July 1, 2008, through Dec. 31, 2008. This is an increase of
eight (8) cents from the 50.5 cent rate in effect for the first six
months of 2008, as set forth in Rev. Proc. 2007-70.

The IRS normally only makes these adjustments once a year.  But since gas prices have risen to an obscene level, we’re getting a break for the second half of the year.  It won’t solve the problem, but it will help.

Read the full press release here.

 

What’s the Competition Up To?

Mark Riffey over at the "Business is Personal" blog asks the musical question, "Are you paying attention to your competition?"  He points out that last week, when Mozilla released the new version of the Firefox browser, the Internet Explorer team at Microsoft sent them a cake to congratulate them on their achievement.  What a great idea!

Clearly the boys and girls from Redmond, WA are watching their competitors.  But, are you?  If not, it’s like driving an Indy car with a blindfold on.  You may be able to find your way around the oval track, but if you don’t know where the other cars are, you’re probably going to crash and burn.

In another life, BT (before Tacony) I called on Wal-Mart, K-Mart, and Woolco (out of business along with their parent, Woolworth’s).  Like all guests, I had to sign a visitors log book.  The majority of the names in the log were always competitive shoppers.  The Marts shopped each other, they shopped Woolco, and Woolco shopped them.  It wasn’t a secret.  Every body knew everybody else.  The only rule was that they never carried a notebook or recorder.  They could take away as much information as they could carry in their heads.

Today information is much easier to find, what with the Internet and all, but sometimes you still have to dig.  When was the last time you took the time to shop the big boxes?  What about your direct competitors, other independent retailers? 

We used to have a competitor in the ceiling fan business who would visit all the other fan companies at the end of the big industry trade show.  The object of the visit was to exchange catalogs and price lists.  He felt like everyone was better off if we all had the right information, and he was right.  There are no secrets in most industries anyway, so why be enemies?

But even if your particular marketplace isn’t open to such a friendly approach to competition, you still need all the information you can get to compete effectively.  You might not want to go so far as to send your biggest competitor a cake when he opens a new location, but it couldn’t hurt, could it?

Suggestion:  Set up a Goole News Alert for yourself, all of your competitors, and for the lines they (and you) carry.  Whenever any of the names of phrases you’ve selected shows up on the web, you’ll get an email. 

Google_alert

Hint:  Be sure you choose "Comprehensive" from the "type" drop-down list.  That way you’ll receive alerts when the search term comes up in a blog or on a web site.

Are You Selling a Commodity?

“You’re not selling a commodity unless you want to.  Seth Godin

It’s a short quote but it really says it all.  The Merrian-Webster Online Dictionary offers five different definitions of the word “commodity”.  Number 4 says: 

“a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price”

In a “big box” world, wide availability is a fact of life.  In the rare case where an item isn’t available from a Mart or a Depot, I can probably buy it online.  So how do I not sell a commodity? 

According to Godin, “You need to increase your value. If people don’t want to pay, it’s because you’re not delivering enough value for the money you’re charging.”

Aha!  Value. I have to sell value. It’s not the thing in the box that matters.  It’s how I deliver what’s in the box.  It’s how I back it up.  It’s how I treat people when they come into my store—or when they call on the phone. 

Value is in showing the customer how to use what’s in the box.  It’s standing behind it when there’s a problem.  There are a million ways I can add value and cutting the price isn’t one of them. 

Price cutting doesn’t add value.  In fact, price cutting decreases value.  I don’t want to buy the cheapest widget.  I don’t want to “settle.”  I want to buy the best widget and I want you to help me justify the price. If you do that, you’ll never sell a commodity.  And who wants to sell something that’s defined by “smaller profit margins?”  I know I don’t.