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When you buy Zappos, what do you buy?

Amazon just announced that they're spending $800,000,000.00 (looks better that way) to buy Zappos.com.

But wait.

Amazon already has plenty of shoes.

Amazon already has great technology.

Amazon already has relationships with Fedex and UPS.

What you buy when you spend that kind of money is what matters now. And what matters is:

  • A corporate culture that's not the same (and where great people choose to work)
  • A tight relationship with customers that give you permission to talk with them
  • A business model that's remarkable and worth talking about
  • A story that spreads
  • Leadership

These things are available to organizations of every size. If you want them and choose to work for them.

Ishita’s here

ISHITA1 Please welcome Ishita Gupta, who now doubles the size of the team here at my tiny version of a company.

Ishita is our newly appointed Head of Hoopla. She's working with me on strategy, new projects, digital detailing, publishing and coordination. She's one of the most generous, most connected people I've ever had the chance to meet, and I'm lucky to be able to work with her.

If my name is on it, it's still from me… every word is still mine, every email too. Ishita is going to agitate, cajole and coordinate new projects and help me market, focus and be in the right places at the right time. And just in time, too.

A few other housekeeping notes:

This blog doesn't accept ads and I don't do paid endorsements. I get a new box of socks every year from Little Miss Match, but that doesn't really count. If you send me a book or a chocolate bar, it's unlikely that I'll blog it, but it never hurts to try, especially if the chocolate is dark chocolate. Books and other goods mentioned on this blog often carry affiliate links, and the money earned from these is donated to Room to Read or the Acumen Fund. I don't actively invest in the stock market or in startups, so if I mention a company, it's because I want to, not because I have an investment. I'm the founder of Squidoo.com, and if I mention them, it's because I believe in what we're building. This blog doesn't have comments but I read all non-anonymous email–and if I write back, it's me.

Death spiral!

You've probably seen it. The fish monger sees a decline in business, so they have less money to spend on upkeep and inventory, so they keep the fish a bit longer and don't clean up as often, so of course, business declines and then they have even less money… Eventually, you have an empty, smelly fish store that's out of business.

The doctor has fewer patients so he doesn't invest as much in training or staff and so some other patients choose to leave which means that there are even fewer patients…

The newspaper has fewer advertisers, so they can't invest as much in running stories, so people stop reading it, which means advertisers have less reason to advertise which leaves less money for stories…

As Tom Peters says, "You can't shrink your way to greatness," and yet that's what so many dying businesses try to do. They hunker down and wait for things to get better, but they don't. This isn't a dip, it's a cul de sac. It's over.

Right this minute, you still have some cash, some customers, some momentum… Instead of squandering it in a long, slow, death spiral, do something else. Buy a new platform. Move. Find new products for the customers that still trust you.

Change is a bear, but it's better than death.

Winning on the uphills

Interesting business lesson learned on a bicycle: it's very difficult to improve your performance on the downhills.

I used to dread the uphill parts of my ride. On a recumbent bike, they're particularly difficult. So I'd slog through, barely surviving, looking forward to the superspeedy downhill parts.

Unfortunately, I had a serious accident a few years ago (saving the life of a clueless pedestrian by throwing myself onto the pavement). Downhill might be fast, but it's crazy.

Lesson learned. Now, I look forward to the uphill parts, because that's where the work is, the fun is, the improvement is. On the uphills, I have a reasonable shot at a gain over last time. The downhills are already maxed out by the laws of physics and safety.

The best time to do great customer service is when a customer is upset. The moment you earn your keep as a public speaker is when the room isn't just right or the plane is late or the projector doesn't work or the audience is tired or distracted. The best time to engage with an employee is when everything falls apart, not when you're hitting every milestone. And everyone now knows that the best time to start a project is when the economy is lousy.

Most of your competition spend their days looking forward to those rare moments when everything goes right. Imagine how much leverage you have if you spend your time maximizing those common moments when it doesn't.

He’s doing his best

In fact, everyone is always doing their best under the circumstances. As my friend Al says, there's no such thing as irrational behavior. That's because in this moment, given the perceptions someone is holding, the way they behave is in fact the only way they can behave.

Consumers don't make choices as much as they react and respond to the inputs and assumptions they have about the marketplace, their life and your brand.

If you don't like the way someone is acting, understand you can't change his behavior, you can only change his circumstances.

This makes it really difficult to vilify the recalcitrant consumer. It's not that they're stupid, it's that you didn't explain it very well. As Zig has said, "I can understand why you're not interested. Other people who believed [insert belief here] weren't interested either. But once they discovered [insert new fact here] they were eager to try it."

Sure, people are willing to lie, break promises, willfully misunderstand, avoid responsibility and blame others. But why? They're doing it because under the circumstances, it seems like the right thing to do. As marketers, we can often change the circumstances.

There's an infamous scene in the Godfather where a movie producer turns down a 'reasonable' request from the Don. The Godfather is stunned. How could someone turn him down?

After the family kills the producer's prize racehorse (and puts it in his bed), the producer changes his mind.

What changed? Before the intervention, the producer didn't understand, didn't believe, didn't fear the Godfather. So he made what he believed was the best possible decision. Afterward, his worldview was forcibly changed and he made a different decision based on different facts.

Probably not a good idea to run around beheading horses, but it's a useful lesson in changing perception.


Your users, employees, consumers and donors are obsessed with data now. Are you helping them solve their knowledge problem?

Years ago, I had an automatic transmission car with a tachometer. Why I needed to know my RPMs when I couldn't do a thing about it is beyond me.

Pulse Yet useless data and hidden data continue to plague users. I have a Garmin 305 watch to track my bike workouts. It's just fine, except I hate it. I hate it because there are only two pieces of data I care about while I'm working out: how fast I'm going and what my heart rate is. My theory is that I can't do anything about time, but I can control effort, right?

Garmin puts my heartrate in 3 point type in the top right corner. It's unreadable by anyone old enough to be crazy to use one of these devices. And my speed? They convert miles per hour into some sort of runner's fraction that I still haven't figured out. Broken.

[I was wrong! It's not broken, the instructions are. My faithful readers have alerted me that I can fix the display, which I'm going to spend the next hour figuring out how to do. Sorry to offend the 305].

Acumen, on the other hand, has built a charity dashboard that lets them evaluate projects on cost-effectiveness across sectors. It's a marvel, and it completely changes the way you think about philanthropy.

Or consider the ambient dashboards that have been built in surprising ways. One company put pinwheels on a VPs desk. When sales went up, the pinwheels spun faster.

Just curious: what do you think would happen to energy consumption if every car registered in the US was required to have a digital mileage readout installed?

Building good dashboards isn't difficult, but it's an excellent marketing strategy. A few brainstorms:

  1. If you can add a digital dashboard to your service, do it.
  2. If you can make the dashboard public, it gets more powerful.
  3. Highlight data that changes behavior.
  4. Allow the user to highlight the information that matters to them.

I'm not focused on digital companies here. If you can add a dashboard to a payroll company or a sleep measurement device, you can add one just about anywhere.

The law of the little shovel

If you want to dig a big hole, you need to stay in one place.

If you walk around town with a little shovel, you'll just end up digging thousands of little holes, not one big one.

Call on one person ten times and you might make the sale. Call on ten people once each and you will likely get ten rejections.

The important thing to remember is that separate events are often separate. If you use the same ineffective approach on one thousand people, it's not going to start working better just because you use it more often.

Connected events, on the other hand, often benefit from frequency and trust.

Which leads to two viable strategies:
1. If you can stay still, stay still. Earn the trust, earn the sale by repeatedly demonstrating value and authority.

2. If you can't stay still, get a bigger shovel. Your marketing and your sales pitch has to be so refined and focused that it works the first time, because you don't get a second time.

Walter’s lesson

Here's the thing about the life of Walter Cronkite:

At every turn, he acted as if he had a responsibility to his audience. He didn't do the right thing because he thought it would help him get ahead and then one day he'd get his share. Instead, he always did the right thing because that's who he was. No sellouts, no political consulting, no false transparency.

That's the way it is.

Transparency works if it's authentic.

How to make graphs that work

Squidvisits 1. Don't let popular spreadsheets be in charge of the way you look

92% of all the business presentations made in the United States are done with templates created by big companies in Excel or Powerpoint. This is a horrible tragedy.

First, programmers don't often have a lot of taste. The fonts are flaccid, the defaults are wan and uninspiring. There's no sophistication.

Second, and more important, when you show me something exactly like something I've seen a hundred times before, what do you expect me to do? Here's a hint: Zzzzzz.

2. Tell a story

There are only four reasons I can imagine you would want to show someone a graph (not a chart, or an infogram or a diagram, but a graph of numbers):

  1. Things are going great, look!
  2. Things are a disaster, help!
  3. Nothing much is happening.
  4. We need to work together to figure out what the data means.

I think if it's the third one, you can probably dispense with the graph altogether. And the fourth isn't really a presentation, it's a working session. Which means you're trying to light a fire, make a point, highlight a trend, cause action to be taken. Your graph should reflect that, or you're wasting my time.

1traffic.001-001 3. Follow some simple rules

When you violate the fundamental rules of graphing, you confuse me, or cause me to pay attention to parts of your presentation that aren't related to the story you're trying to tell. Here are a few:

  1. Time goes on the bottom, and goes from left to right
  2. Good results should go up on the Y axis. This means that if you're charting weight loss, don't chart "how much I weigh" because good results would go down. Instead, chart "percentage of goal" or "how much I lost."
  3. Don't connect unrelated events. For example, a graph of IQs of everyone in your kindergarten class should be a series of unrelated points, not a line graph. On the other hand, your weight loss is in fact a continuous function, so each piece of data should be attached.
  4. Pie charts are spectacularly overrated. If you want to show me that four out of five dentists prefer Trident and that we need to target the fifth one, show me a picture of 5 dentists, but make one of them stand out. I'll remember that.


4. Break some other rules

Use color. Use thick lines. Use circles. Use big type faces. Don't use 3-D charts unless you have a license. You can animate, but only if you have a note from your doctor.

If you break too many rules, it'll backfire. If the graph is hard to grok, or appears tweaked too much, we cease to believe it. [and the Onion chimes in, ht to Tom]

Mowing the lawn

I used to hate the lawn.

Growing up, we lived on a curved street, and as a result, our house had a back lawn much bigger than normal. My job was to mow it, using an old, noisy, non-sharp, broken down mower. I remember it taking about 14 hours a week.

I hated everything about that lawn.

I wonder how your customer service people feel?

Does it show?

Every person who does marketing, sales, product design or any other job that influences customers directly should spend at least an hour a week answering the customer service lines, using the same tools your customer service people use. Out of sight is not so good, out of mind is inexcusable.