Category Archives: Business Strategy

In The End, It’s Always About The Numbers: Insight From My Negotiations With Living Social

Since launching RidingHoodBaskets.com in mid-January, I have had the opportunity to explore several advertising channels.   In the grand scheme of things, most have been successful.   A couple of months ago, I had embarked on a grand vision to potentially reach 25 million customers (or a fraction thereof) by launching a campaign on Living Social.

I was unsuccessful in my attempt.

In failure, there is always a lesson, right?  Well this is what I have learned:

  • If you plan on launching a deal around a holiday, begin the process at least 4-6 months in advance.
  • After you submit your initial “interest” as a Partner with Living Social.  Give them a call in about 2-3 weeks if you haven’t heard anything.  My first application was lost in the ether. I had to submit a new application and call about 2-3x times before I was contacted by an Account Manager via e-mail.
  • Now for the good stuff….
    • The Split: Living Social offers a revenue split from the sale of your deal on their platform. That split is 70% (you)  / 30% (them) .  They also charge a credit card fee around 2.5% that is deducted from the Gross.  So you, the business owner, will Net 70% of Gross less 2.5%.
    • The Deal:    In my case, I would be offering a coupon deal for X that doubled the customer’s buying power.  Basically Pay X and get 2X as store credit.  (i.e.  Spend $5 for $10, $10 for $20, $20 for $40, etc.)
    • The Strategy: Living Social does not want to the customer to have to pay more for a product after they have bought a coupon.  Meaning, (as I have experienced it) they will take the average price of your products/services and offer a deal for 100% of the retail price.  Meaning if your average price is $50..expect a deal like $25 for $50 or $50 for $100.
    • Big take-away: Do the numbers. I created a spreadsheet that calculated my net profit from the deal AFTER split for a given quantity against my Revenue (or loss) from sales of the exact same quantity at each major price point.   It was easy for me to see at what price point I would begin losing money due to cost of goods sold (COGs) exceeding my sales revenue less coupon.

Be prepared to negotiate with Living Social about what level of offer the deal should give and do not be so invested in the project that you can’t walk away.  In the end, the numbers should make the decision.   In my case, the deal they offered would have resulted in a loss on the books.  I walked away from the deal.

I do believe Living Social is great for certain businesses.  Here are a few structures I think could work well leveraging Living Social:

  • High margin businesses
  • Service Based Business with low overheard/expenses
  • Companies with large ad budgets  (the benefit of selling x number of deals could actually outweigh a loss taken from the campaign if reach and fulfillment are the KPIs)

These are my takeaways and the reasons for the decisions I have made regarding this particular campaign, for better or for worse.

Have you ever used Living Social or similar competitors like Groupon? Was it successful?  What was your experience and take-aways?    Share with us in the comments!

My Entrepreneurial “A ha!” Moment of the Day: Facebook Ads

I’ve been testing out multiple avenues for advertising including Facebook, LinkedIN, and Google Adwords. None have been overly successful BUT I have seen a difference in ROI for Facebook ads if I decide to run an ad that links to a Company Page vs. an External Link to a website. I have also posted different messaging “organically” on my company page and have gotten lack luster “view” results.

In a few short days, I have gone from 312 Company Page Followers to 424. My account notifications stays lit each day (which is great!). On the other side, I have ran ads that link out to my site directly and the ROI (CTR & Impressions) is pitiful for lack of a better term. I just read an article that stated Facebook’s algorithm is in the process of slashing organic reach down to 1-2% and the only way to reach those people (Your company page followers) would be to buy your way to them. <– this makes sense to me because I have seen the results of it, but didn’t know the cause —

Food For Thought — when you are creating your advertising and planning out your campaigns for social media. Understand not only the ROI you what to achieve AND the marketing message, BUT also the algorithms of the platforms you decide to advertise on. This should be done for BOTH organic and paid messages! Hope this helps!

——————–

Original article was read on LinkedIN:
https://www.linkedin.com/today/post/article/20140408234213-6621557-how-facebook-really-failed-eat24?trk=tod-home-art-list-large_0
Excerpt: “Facebook introduced changes to its news feed algorithm late last year which limits the organic reach of content posted to brand pages. This means those 10,000 people behind the Likes you have on your brand page won’t all see your posted content. How deep is the pain? Valleywag cites a source familiar with Facebook’s strategy claiming the social network is in the process of slashing organic reach down to 1-2%. The only way to reach those people who like your page would be to buy your way through the limitations and pay Facebook to get your post to those people.”

The Price Is Too High Not To…

“Train people well enough so they can leave, treat them well enough so they don’t want to.” – R. Branson

As a business owner, I am constantly evaluating how I spend my time, what I spend my time on, and what is the return from the time spent on that particular project. When I spend the time training someone, I have a bit of a nag in my mind that fears my investment may run out the door with newly acquired skill sets and some other company is going to benefit from it.

I have read from two different motivational speakers and business consultants that the best decision is ALWAYS to train. Richard Branson (whose quote is above) and Zig Ziglar who said: “The only thing worse than training employees and losing them is to not train them and keep them.”

I can say that ALWAYS deciding to train has paid dividends in not only a more positive and connected team, but for even those that I no longer work with, I have a network of contractors that I can vouch for and KNOW will get the job done in case I ever need to outsource!

I Like Your Idea, Let Me Get Your Card

As professionals we have to be better at networking. I went to a social event, it was actually a “new position” celebration, and there were many people from the industry or related to the industry that attended. Even though it was casual, I ended up connecting and meeting some really good contacts. When I got home and went through my card holder I only found one business card (though I had exchanged my number a few times that night via my cell phone).

One of the attendees actually told me that they only had a few cards left and were being strategic in who they passed it out to. It didn’t bother me that we didn’t exchange cards nor that I wasn’t on his “it” list. What bothers me is that the only actual card I got was from a Deputy Director, but everyone else I spoke with either had no cards or didn’t bring enough… Lesson here:

  1. A Senior Executive had his cards…take note.
  2. If you have cards…bring enough. I had my bag with me, so when I ran out, I was able to refill my card case. And YES, I always have a pack of extra with me.
  3. If you don’t have cards…Get Cards!
  4. The ART of networking is not irrelevant, it is not a lost art. On the contrary, because of the over use of technology to build connections, it has become ever more important. Passing out a biz card can be received with the same excitement as getting a hand written letter. It is even more impressive when an entry level or technical professional has them because the opposite is expected!

Not every industry requires the use of business cards – many companies are implementing better sustainability programs – but if your industry is high touch, if your executives, managers, and c-suites carry them, then you best have them yourself!

Quick note: Invest in a card case/holder. It doesn’t have to be fancy (mine is a base silver color). Passing out a card with bent edges or worn lettering is like walking out your house with a wrinkly suit. It’s not polished, it looks sloppy, and no one is really gonna take you seriously.

When You Have Done All You Can

The Next Move Is To….Wait.

You’ve done all that you can. You’ve covered the angles. You’ve set the players in motion. You’ve launched your product. You’ve opened your doors for business.

What do you do next? Sit and wait.

Doing nothing and being still are not the same things.  Sometimes we unintentionally get in our own way.

You’ll see. When you’ve done what your supposed to do, everything else will take care of itself.

Operation Prime Red: Shipping Your Projects

Shipping. A phrase coined by the marketing guru, Seth Godin, and recently exercised by a good friend of mine, Randy Redhead a.k.a. Prime Red.

He recently released his new project “Letters from the Architect” on Bandcamp, and today, officially launched the music video for his single “Billion Dollar Business!”

Shipping is never easy and Prime Red can testify to this. The project had been stewing in his brain for months and during production, he came across numerous frustrations and moments of fatigue. Never did I hear him mention, “letting this one go”.

As you can see from the support of friends, family, trusted colleagues, and new fans — Prime Red has inspired and motivated so many people around him, inspiring what they have coined #theresistance. Music and sound that stays true to the artist and that resists the duplication, simplification, and vapid creations found in music today.

Big Ups! to the man who ships his project, shares his passions, and lights the path of those around him, thereby lighting his own!

Check out Randy Redhead and his projects at:

Bandcamp: Primered.Bandcamp.com
&
Twitter: @PrimelabsQW

Billion Dollar Business [Official Video]

Better Project Managment: Tackling Your Tasks

We have all been there.  Your are assigned a task that you really don’t want to deal with and seems to big to tackle.  So you do what many people do, you procrastinate.

Laura Vanderkam wrote a great article on Bnet.com on 5 Ways to Stop Procrastinating.  Here is her advice:

  1. Do a “home inspection” on the problem – During the home buying process, you seek a disinterested yet expert to come and inspect your home.  At the end of the inspection, you are given a list of things to be fixed or updated, any insect issues, etc.  The same can be applied to your task.  Share it with a mentor, family member, or your boss. All you may have to do is shift some paragraphs around instead of writing a whole new treatment on that copy project.

Read More

Another Project Shipped! The Team Makes A Difference

Nothing feels greater than shipping a project that you have spent months developing!  Today was a great day as the crew at evolveALOUD and I flipped the switch and brought a new website live.  You’ve heard the phrase well oiled machine but I have something better,  A Fully Involved Team!

I was given an article by a friend and business associate of mine called ‘The 8 Characteristics of Ideal Business Partners.’ Point #3 is what I want to illustrate on that piece which is: The passion to become the best at what they do.   This is what my team has demonstrated over these past few months and I am very grateful to be working with a high caliber of people!

Those Few Extra Minutes

It’s amazing how a few extra minutes can enhance a customer’s experience.

There are 3 levels of service you can give to your customer:

  • avg service
  • memorable service
  • or outstanding service that creates life long customers.

(Anything below avg is never to be considered)

I was chatting with a service agent looking to reset my password on an account. The agent reset my password as requested(avg service). Then, asked if I would like them to stay on the line, while I logged-in, to make sure I had no issues (memorable service). Lastly, before the call ended, they asked if there was any thing on my account or on the website that I would like to review(outstanding service). I never felt rushed.

All of this took place within a 5min time span. My issue was resolved in 1min (password reset), true service was delivered with the remaining time.

What could a few extra minutes do for your business? What about your life?