Roy's Blog: Entrepreneurs

July 9, 2018

Marketers: why bundling sucks like a dirty martini

Many like a dirty martini; I don’t.

I love martinis but please keep them clean and uncontaminated by dirty fluids that violate the clear pristine gin and vermouth mixture. I don’t mind if you put 4 symmetrically organized olives on a skewer in it because they are gone before any real contamination can occur — I love olives but hate the juice.

I feel the same way about bundling and the way it is practised in the marketing world today.

Bundling is commonly used by most organizations — add a number of products together and give the customer a discount.
Combine two products and get 10% off the total price for both; take 3 products and the discount goes up to 15%. The more you buy, the more you save. A pretty simple idea.

To me, however, bundling practised in this manner is like a mixing a dirty martini.

It contaminates and dilutes the basic marketing tenet that says price should be a direct function of value; the greater the value, the higher the price.
And, conversely, the lower the value, the lower the price.

Dirty water

I’m not aware of any marketing principle that advocates increasing the value of an offering and then reducing the price.
Even if economies of scale and scope were in play, the right thing to do would be to maintain price levels and reflect the benefits of the lower costs in increased margins.

But rarely does merely selling two products together materially drive cost down; bundling isn’t physical integration.
Combine long distance service and internet service on a customer’s bill, and the telecom company doesn’t realize any measurable cost savings as a result of the combination yet the customer gets a discount for signing up to two communications products.

It’s an illusion

And it’s a pipe dream to believe that lower bundle prices stimulate long term demand and increase revenues. Combined billing for long distance plus internet service doesn’t stimulate usage of either.
I’ve had home phone, long distance, internet and TV services bundled together for years, but still treat each one separate and distinct from a consumption point of view — my usage hasn’t changed for any one of them.

The customer loves getting the discounts but no real value is created for the organization. In my former CMO days, I was skeptical to the point of a non-believer of bundling activity — I viewed it as lazy marketing and slight of hand.

Bundling drives marketing creativity to zero

It’s a no brainer — it doesn’t take a marketing graduate — to add and bill two services together and apply a discount.
What talent does it take to do that? What value proposition does the addition produce other than a lower price?
When long distance and internet service are sold together, what unique communications value is created by the synergy between the two services other than a price discount? Right. Nada.

Marketing professionals should be motivated to create new packaged solutions that seamlessly integrate a number of product elements and apply premium — not discounted — prices that reflect the added value created by the package.

Bundling ignores basic pricing principles

The function of price is to value the exchange between an individual and an organization that satisfies each party to the transaction. A successful value exchange leaves the customer happy with the money they have spent for the benefits they have received ; the company is better off because they realize an acceptable margin.
It’s easy to offer volume discounts but it completely ignores the impact it has on profitability. You can’t sell a martini if it doesn’t make money.
Do you really think a discount should be offered if you buy two drinks? Never seen a two-fer on martinis.


Bundling gains no competitive advantage

All marketing teams think by offering bundles they create customer loyalty; that by offering reduced prices for volume, customers will decide to stay with the organization forever.
Not true. People are fickle when it comes to price and will go wherever the lowest price is offered.
The reality is that most competitors offer bundles and therefore competitive advantage is conferred on no one. All the banks use bundling, all the telecom companies offer them — every sector is represented in the bundling dysfunction.

Bundling gives customers the wrong message

Increase the number of products provided and get a price savings is exactly the wrong message that should be given to the market.
In life the more value you receive the higher price you expect to pay. In martinis, the better the gin, the higher price for the martini — bar stock gin is sold at a lower price than Brockmans.

Bundling screws them over

Customers deserve more value that satisfies their overall wants and desires and we should be doing it at prices that reflect the value they perceive they’re receiving.
This preoccupation with discount bundling is a distraction to the marketing profession from what they should be practising.
Bundling is a red herring; it’s olive juice that screws up a perfectly good martini.

What people really want are integrated packages that satisfy a broad range of what they covet. Packages that reflect their lifestyle, for example, that might seamlessly integrate elements like a vacation, meal, wine, snuba and a car rental or if it’s a business, elements like sales training, CRM apps and logistics assistance.

Bundling is marketing’s dirty martini; it muddies the waters of good marketing.

Let’s get back to the basics — create more value for customers and charge premium prices that reflect it.


Check out my BE DiFFERENT or be dead Book Series

Recent articles you might like
Why serving leaders are the new black
6 weird things people never knew about making a mistake
How to be a really amazing speaker

  • Posted 7.9.18 at 03:43 am by Roy Osing
  • Permalink

June 25, 2018

6 weird things people never knew about making a mistake

How often do you remember being praised for making a mistake? When you screw up, does the person you admire and respect congratulate you and lavish you with attaboys?

I can’t recall EVER being rewarded for a miscue; it wasn’t — and still isn’t — the acceptable thing to do.

Our entire life we have been taught to not make mistakes, from school to work. Get 100% on the exam and develop a perfect strategy for the organization you work for. And when we fall short of those expectations we are forced into remedial work to correct the things we did wrong so that the next time we will get them right.

It’s all wrong. Human beings make mistakes; some more than others but everyone screws up at one time or another.

To try and eradicate mistake making is senseless, unproductive and misses an opportunity to turn the “failure” into an epic win.

Epic win

As long as we are going to make mistakes shouldn’t our academic institutions and organizations should be teaching people how to turn them into amazing outcomes rather than scolding them for doing it? NO! because the teaching narrative is always about “do it right the first time” and be perfect.

Schools don’t get it

The tools to at least have a good chance of achieving a position result remain a secret in the hallowed halls of our teaching institutions. “How to make the best out of a mistake” doesn’t appear on any school curricula or on any organization’s internal training agenda.

So, we are left with the enigma of teaching and expecting perfection in a world where unpredictability and uncertainty govern the dynamics of our environment and human beings are left to survive its forces.

An impossible task without making mistakes.

Weirdly, the mistake has a profound impact on our lives.

The mistake is the best teacher you’ve ever had

When you get something right, you receive positive reinforcement and a satisfied feeling of achievement, but when you get something wrong, there is an even more powerful emotional impact that motivates us to “fix it” and prevent it from happening again. In particular, a setback on a real world issue where the consequences can include a loss of a relationship, a furious customer or a loss of revenue can motivate us to get it right much quicker than merely getting the third question on a math exam wrong.

The mistake can make you better off

Ironically, a mistake that is fixed fast can improve your situation more than if you never made the mistake in the first place. Proper recovery from a mishap — repair the situation fast and then do something extra — can build customer loyalty or enhance a personal relationship. The recipient of your mistake is so impressed with what you did to remedy the situation they soon forget about the OOPS! that caused them the original discomfort.

The mistake can make you more human

A mistake shows that you are more than superficial veneer; someone who is flawed just like everyone else. This is an endearing trait to most people as compared to the phoney slick image that some people like to portray. Humans are liked and respected more than plastic; the mistake fortifies the former and dispels the latter.

More human

The mistake can build your personal brand

The ability to morph a “bad” situation into a delightful one is a personal brand dimension that few people possess. An individual who can turn a mess into a positive outcome is extremely valuable to an organization struggling to weave their way through complex and uncertain markets.

The mistake forces you to look for another path
It stimulates the creative process to explore other potential avenues to take. In fact it’s not about the mistake at all; rather the moment after the mistake. Problem solving in today’s environment requires nimbleness and the flexibility to consider all options available, and the mistake brings this to life in a very real way. You have no choice but to look for another plan if you are to move forward. The mistake is the visceral reminder that you must always have “Plan B” available.

The mistake can separate you from the crowd

BE DiFFERENT or be dead is my mantra. If you can’t find a way to separate yourself — as an organization or individual — from the crowd, you will go unnoticed and sooner or later you will fail. The mistake can be the catalyst for discovering how you can standout from other people who are totally consumed with trying to get things right that leave themselves exposed and vulnerable when things go wrong (and they eventually do). If you excel at squeezing the best from a mistake you will be truly unique in a sea of others struggling with trying to achieve perfection.

Learning how to prevent mistakes is a laudable goal but an unachievable one; learning how to live with them is essential if you want to be successful.


Check out my BE DiFFERENT or be dead Book Series

Recent articles you might like
How to be a really amazing speaker
This happens when you have a strategic disadvantage
How a leader can really engage people

  • Posted 6.25.18 at 03:57 am by Roy Osing
  • Permalink

June 20, 2018

4 strategic ways to make your mark in the eCommerce world — guest post

In 2014, there were around 110,000 eCommerce companies in existence.

By 2017, however, that number had grown to over 2,000,000 according to Pipe Candy’s research. And this doesn’t even include China.

This means that you as an eCommerce store owner face a crazy amount of competition as you bid to stand out in the chaotic eCommerce world.
The good news is that customers are very happy to buy online, and if you get things right, they’ll buy from you.

Now, it might not be possible to turn $200 into $1,000,000 with your store overnight, but you can totally stay afloat and do super well regardless.


Let’s take a look at 4 strategic ways you can make your mark in the eCommerce world.

Simplify the buying process

There are a number of things that consumers want when they shop online, and chief among them is an easy as heck buying process. They want to be able to search and buy quickly.

For one thing, customers expect to be able to buy directly from your website. For another thing, they expect to be able to buy online in just one or two clicks.

Amazon is a great example of a company that has simplified the buying process by reducing the amount of clicks a user has to make before they can make a purchase. If you check MAC Cosmetics’ website, on the other hand, it takes three clicks just to view a product. This is too many.

To simplify the buying process, make it really obvious what a customer has to do to make a purchase. Implement large, colourful buttons and super clear directions and reduce the amount of pages they have to move through along their buying journey.

Install a point of service card reader to ensure payments can be made offline, too. This is particularly important if you currently (or plan to) have a physical or retail store. You want to ensure your brand is accessible across all channels.

Embrace cryptocurrency as a payment method

More and more people are starting to invest in cryptocurrency, but while the amount of goods and services they could purchase with digital coins used to be few and far between, more merchants in 2018 are starting to accept cryptocurrency as a payment method.

That said, many eCommerce stores still don’t accept crypto as a payment method. This means that it’s open season and you’ve got a great chance to be a trailblazer in your niche if you start accepting payment in Bitcoin and alt coin’s. You’ll capture a new audience that your rivals are missing, and this audience will become repeat customers.

In 2018, the world is changing and customers are getting more demanding. By accepting payment in cryptocurrency, you’ll show that you’re actively listening to people, and this will improve your brands reputation.


Offer free shipping

Business models can be the difference between a company doing well online and failing. Amazon has offered free shipping for years, something that’s very attractive to customers.

Naturally, it’s much harder for smaller online stores to offer free shipping. Sending out items around the world is a costly business. But customers love the idea of free shipping and it can boost your sales.

Here are some tips:

— Set a minimum order amount - A customer has to spend at least $X amount before they’ve qualified for free shipping

— Make free shipping a promotional event - For a limited time, offer a free shipping promotion. This will build a buzz around your store and products and can convince window shoppers to become loyal customers.

— Offer free shipping with select items only - Not every item needs to qualify for free shipping. Limit it to low shipping cost items that have a high enough markup that makes them profitable once you’ve factored in shipping fees.

Offer discounts and deals

Discounts aren’t available all the time and this creates a sense of urgency - and urgency is one of the key things that makes customers part with their money. If they don’t make a move now, they fear that they won’t get a second chance.

Knowing your customer is knowing human psychology. We don’t want to miss out on things.

There are many different types of discounts you can offer on your site, from a percentage off to a fixed price off, to the aforementioned free shipping. That said, the type of discount matters, as does how you word your discount. For example, if you were to write “Get $$$” off, it sounds like a win.

These small things matter, but how you present your discount will ultimately depend on the type of customer you have.

Implement different discounts, experiment with the wording and use analytics to see which ones perform the best. Creating an account with Google analytics is a great place to start.

These are 4 strategic ways you can make your mark in the eCommerce world.

Make the buying process simple, embrace cryptocurrency as payment and focus on offering deals and discounts that customers want to see.

Michelle Deery is a writer for Heroic Search, a Tulsa based SEO agency. She writes products content that helps businesses increase their sales and build a powerful brand in the eCommerce world.

Other recent guest posts you might like
6 female entrepreneur knowledge bombs not to be missed
What to do so your boss could not live without you
Being a rockstar in your industry is a matter of leadership
The top collaboration tools used by successful leaders

  • Posted 6.20.18 at 04:11 am by Roy Osing
  • Permalink

June 11, 2018

This happens when you have a strategic disadvantage

Every organization seeks to gain a strategic advantage over their competitors.

However in my experience I find that many of the more common practices used by organizations are actually counterproductive to the intent of achieving an unmatched position in the marketplace — they work against the intent of standing out from everyone else.

These practices are typically followed by most organizations today. I find it somewhat ironic that their stated purpose is to help differentiate the organization from their competitors yet they don’t work — they have the opposite effect.
The very fact that they are followed by the multitude means that they can’t possibly create uniqueness, they create sameness. They serve no strategic driver; they typically are a response to either internal interests — keeping costs down — or with the belief that if the experts — academics or strategy advisors — advocate them, they must surely work.

They don’t.

Copying best in class

Copying others; looking to another organization for new ideas.
The copy process is quite simple: find a best in class organization and incorporate what they do into how you do business.
The problem is—strategic advantage is achieved by innovating and by being different than the competition.
The best practices approach may help improve operational processes but it will never produce strategic benefits.
All copying does is increase the size of the herd who does the same thing.


Snubbing the frontline

Treating the frontline as if they were at the bottom of organization.
Applying modest recruiting standards. Accepting minimum skill and competency requirements.
The problem is—strategic advantage is determined by how well an organization executes, and this is largely in the hands of frontline employees.
Treating them as second class citizens encourages them to deliver second class results.
On the other hand, honour them and they will catapult any organization ahead of any competitor.


Managing call centers as a cost center.
Maximizing throughput and productivity. Rewarding employees who take the most number of calls and spend the least amount of time on each call.
The problem is—strategic advantage is achieved by creating memorable experiences for customers; this is rarely achieved by imposing internal productivity constraints on the customer transaction.
Rather a WOW! experience happens when the customer is amazed with the outcome of the call.
Treat the call center as a customer loyalty center to create an advantage.

Pursuing mass markets

Searching for opportunities in mass markets.
Pushing solutions to as large a market cross section possible. Looking for lowest common denominator solutions that apply to the masses to maximize competitive market share.
The problem is—strategic advantage is earned by discovering and satisfying the unique wants and desires of individuals not by flogging products to the masses. It’s gained by maximizing share of wallet not share of market.
It’s the result of serving the chosen customer group so they never leave.

Mass markets

Acquiring new customers

Prioritizing new customer acquisition to fuel revenue growth.
Trying to gain new customers by enticing them from their current suppliers through special deals and promotional offers - “With every purchase of our internet service you will receive a free flat screen TV.”
The problem is—strategic advantage requires a healthy base of existing customers who are loyal and willing to be an active source of new business referrals.
Offering deals to new customers while ignoring current ones can lose business and destroy market position.

Honouring the strategy

The strategy doesn’t deliver results; brilliant execution does. Yet so much time and attention is paid to formulating the perfect plan using all of the sophisticated tools available, with the underlying belief and expectation that if the strategy uses the rigour of the state of the art toolbox then it must somehow be right — and get closer to perfection.
I have been involved in many a painful planning session where we have tried to squeeze another 10% more accuracy out of our plan to no avail rather than use our time to determine how to implement the imperfect plan that we had created to that point.
Absolute rubbish. Strategic advantage is achieved by organizations that can execute imperfection brilliantly not by the efficacy of their strategic intent.

Take a close look at the portfolio of tactics used in your organization to gain strategic advantage; make sure you’re not fooling yourself.


Check out my BE DiFFERENT or be dead Book Series

Recent articles you might like
How a leader can really engage people
How to get the right mindset for success
8 simple steps bright people can follow for success

  • Posted 6.11.18 at 04:04 am by Roy Osing
  • Permalink