"Free" to "Fee" - Can businesses move services from "free" to "fee"?

I have seen lots of recent mentions about "free" and how online advertising is dying.  Bob Garfield's recent comments about how people do not click on ads (see my recent post here), as well as Six Pixels' recent post (here) both talk about how we all know how the declining clicks is not a shock to anyone.  I've long wondered how businesses continue to invest in online advertising when I don't know anyone that ever clicks on these ads. Of course I understand the Brand messaging and do see that there is value in online advertising, but I don't see how many people will click on ads.

I've also seen a lot of articles and mentions in podcasts around how 'free' services business models are hurting the market.  Businesses are killing themselves without even knowing it. Businesses launch a free service and think that advertising will be the answer to their revenue plan.  As I stated above, it appears that online advertising is in a declining state (note: this is just a hypothesis).  If ad revenue, for 'free' services business models, the basic economics of this model will not work. In order for a 'free' service to recoup for diminishing ad revenues, one option is to introduce a pricing structure for this 'not-so free' service.

Now, introducing a 'fee' structure after customers have already received the product for free is not going to be easy.

Are there any 'free' to 'fee' success stories out there?  If you have any, please share them with us.

Is Internet Advertising dying? Great podcast, Dishy Mix with Bob Garfield

Yesterday during my run (only 2 miles), I listened to a recent Dishy Mix podcast with Bob Garfield.  Bob (links to his blog) made two points which really stuck with me; internet advertising is flawed and free is going to hurt the internet.

Bob made some great points about how internet advertising is a dying and that there are fundamental flaws that will keep internet advertising from prospering.  Bob stated "nobody will look at an ad if they have the option not to," which is spot on.  When people use the internet, they don't want interruptive ads and pop-ups, which is why the internet advertising industry has moved to banner ads.  Bob stated "nobody has ever clicked on a banner ad, ever, you know except for click fraud and mouse error."  With this in mind, won't the advertisers catch on when they measure their ROI from their banner ads and figure out the banners are not leading customers to purchase their product .  My thought is that advertisers aren't measuring and analyzing their internet advertising as well as they should.

Bob also talked about how giving services away for free on the internet goes against principle economics and is killing many businesses.  There were some early moves by companies to give away their services online for free while charging for offline services.  This has created a lot of free supply, and now customers are demanding products for free.  He talked about how Gen Y'ers have only known the 'free' world, and do not expect to pay for services.

Bob and Susan discussion created a lot of thoughts for me, I would definitely recommend this podcast to everyone and I look forward to reading Bob's new book The Chaos Scenario.

I'll follow this post up with some additional thoughts this podcast brought together for me.

Matthew Cornell's "Don't-Care-o-Meter" and my "Good Enough" mentality

Just read a blog by Matthew Cornell about his client's "Don't-Care-o-Meter".  I follow Matthew's blog due to my ongoing search for improved productivity (which will never be complete).  Matthew's "Don't-Care-o-Meter" post is great.  It basically talks about how many of us are always striving for perfection, when 80% of perfect would be "good enough".

As a manager, I think the "good enough" skill is one of the toughest traits to learn.  Prior to me moving into a management role, I was always striving for perfection.  When I then had direct reports, I looked to them to work towards perfection.  The problem is that everyone has a different impression of "perfection" and it seems like our own measure of "perfection" is always higher than others.  As a manager, holding your directs to your standards is the kiss of death.  You will kill yourself trying to get your directs to get the project done exactly to your desired level.

For me, there came a time when I became overwhelmed.  With my study of GTD and thanks to the GTD Virtual Study Group, I knew I had to change something to stay out of the "overwhelm" zone.  I realized I needed to learn to accept the "good enough" mentality in order to increase my, and my team's, productivity.  With this, our project quality has suffered a little bit in our eyes.  The good thing is that the quality is in the eye of the beholder, and most people think we're still providing just as high of a quality work.  I spend a lot less time reviewing my direct reports work and now give items a quick review, a little feedback (see Manager-tools for a great feedback approach, MT rocks) and move on.  I probably have reduced this review time by 80%, giving me more time to focus on my projects.

This focus on "good enough" has really helped, what I'm learning is that there is a fine line where "good enough" can get you into trouble (check back here soon for more on this).

Do you have a story about a "Good Enough" mentality?  Has "Good Enough" bit you before?  Let us know.

What brands are you loyal to? Here are mine:

Loyalty is a hot topic in the building of a brand.  I was driving home yesterday thinking about loyalty.  On the surface, I thought I was loyal to my favorite brands.  After thinking about it, I'm not sure if I am very loyal to many brands.  Wikipedia defines brand loyalty as the consumer's commitment to repurchase or continue using the brand.  After thinking about loyalty deeper, I think my loyalty to many of my favorite products is very shallow and is mainly due to lack of competition or due to convenience.  Here is my short list of brands I am loyal to:

• BMW - I love my 325i.  It is a workhorse, is fast, gets 30 mpg and is reliable.
• Malibu Boats - Versatile boats that are great for high performance water skiing and start every time.
• Oakley Sunglasses - Worn them for years.  Great style, comfortability and customization.
• Apple iPhone - Can't live without the iPhone.  I'm not totally loyal to the Apple brand.  I think they make some great products even though I'm not the biggest fan of iTunes.  I think it's kind of clunky, except that it is the only option.
• Seth Godin - Seth is the man.  I look forward to reading to his blog daily and seek videos of his speaking engagements.

Have you thought about the Brands you are loyal to?  Are you loyal to your favorite brands? Or complacent for the time being?  I'd like to hear your loyalties.

Is Columbus day a holiday? Yes it is to BART

Was yesterday a holiday for you?  Yesterday was Columbus Day.

My perception was that it isn't really considered a holiday. Traffic was just as bad. The train (BART) was almost as busy as normal (estimated 80% of normal). A school I drove past was in session.  The Financial District in SF was just as busy.

The one thing I did notice was, BART (SF Bay Area Rapid Transit), seemed to observe it as a holiday as I did not have to pay my normal $1 (I think) parking fee.  This struck me as odd.  There were almost as many riders, yet this financially struggling transit provider was giving all of us regulars a free parking day.  Hmm, makes you wonder what drives the decision making.  Unions? Management? Federal Authorities?  So I did some research using Bing (not my normal search engine, but thought I'd give it a try).

I asked Bing, "why was BART parking free on Columbus Day" (great results at the top). It appears that BART parking is free on 9 holidays.  As of April 2008, BART had 46,000 parking spaces.  Guessing that 1/2 of those are paid (estimate $1, even though some are up to $4), that's approximately $23,000 down the drain.  Sure this is a guesstimate, but that could be easily pay for a good chunk of 1 FTE's salary.

I often think about how BART could improve their business model in order to increase revenue, and it seems like there are lots of things they could do, but aren't really trying too many.  One quick way would be to not give away free parking on 9 holidays.  What about charging for parking on weekends (that's 104 days of $0 parking revenue).  Do you have any great ideas for helping BART?

P.S. Written on BART train 414, Fremont to SF line.  I think BART provides a great service.  I've tried many different methods to complete my commute, and BART is very reliable and on time in my opinion. Now it's time for BART to refine it's business model.

My frustration with Nike+, RunKeeper is superior

I just read Terry White's post Nike+iPhone - (Nike+) Shoes = Flexibility, and it reminded me how negative an experience I have had with Nike on this product.  Like Terry, I am a huge Nike fan and have been loyal to them my entire life.  Here is my frustration.

When I made a decision to get back into running, I looked for a solution to track my runs.  I found Nike+, yet it wasn't compatible to the existing iPhone (Original, version 1).  I contacted Nike by email and Apple to inquire about when the Nike+ would be compatible with the iPhone.  The response I received was that Apple did not recommend running with the iPhone due to the hard drive, and it recommended using the Nano.  Not the response I wanted, but I trusted the advice and figured that this option would never be developed.

So, far Christmas, I received a Nano, Nike+, and Nike+ Shoes.  Add it up, it's over $300 worth of merchandise.  Shortly after, the iPhone 3G came out with GPS and my wife purchased it for herself.  With this phone, I then located Runkeeper, which is a GPS based iPhone application which tracks your run.  It does everything from tracking your pace, location and elevation.  This is a great app, and at a great price.

So here I am, with my 1st Generation iPhone and Nano + Nike+ system.  Then Apple announces newer iPhones will work with Nike+.  While the Nike+ has worked well for me and is a good (not the best) product, I haven't been happy with the communication and product release process for Nike and Apple.

When it's time for me to get a new phone, it will definitely be the newest generation of iPhone, but I will be switching away from using Nike+ and will use Runkeeper due to far superior fitness tracking.  By the way, my next shoes will be Nikes.

Disclosure: I have not received any compensation for any product mentions in this post (does that cover my necessary disclosure?  Who knows?)

Customer Service Week - Local Retailer vs. Large National Retailer

Customer service is built into my dna, I think. I was raised in a family that owns and operates a retail business. The business is over 70 years old, and has a solid reputation with the community. During my teenage and college years, I spent quite a bit of time working the floor handling all parts of the customer service channel.

Customer service was a big emphasis for my father as he had differentiate his business from the large national competitors that were encroaching on his space. While the customer service focus may not be always apparent to the customers, here are some key ways they beat their competitors in service:

• Greeting every customer - How many times have you been to a large national retailer and not been able to find anyone to help you? It is rare that they even talk to you when you are looking around with that puzzled look on your face. This doesn't happen at my family's business, all customers are greeted and asked if they need help. And if the first employee can't ask the question, then the question goes up the chain to someone who can answer the question. My father has 40 years experience in the business, he legitimately has a solution for every question.
• Product knowledge - Similar question as above, do the employees of the large national retailers have much product knowledge? Generally speaking, they don't and have no one that can answer the tough questions. At my families business, they live and breath their business and have an immense knowledge of most their products.
• Inventory - They don't use any fancy inventory management system, it's all in their head and on the retail floor. The homegrown/manual inventory system keeps the inventory as a major component to running their business. They don't have the computerized inventory system to rely on, so they have to focus energy on making sure they have what their customers want. If they don't have it, they know all the suppliers that may have it, know who can get it to them by when, and can always find a solution. Special orders are an integral part of their business, you don't usually get that at a large national retailer.

The custom nature of my families business allows them to create a great customer service strategy which really caters to their customer having a great shopping experience. When compared to a national retailer, there really isn't a comparison when you look at the details of the customer service strategy.  Customer service strategy really is a differentiator for local, nimble, businesses and I don't think enough of the local businesses make this a focus.  Most customers would rather shop with a locally owned business and a little bit of an emphasis on customer service is an easy way to beat the large national retailer.

Happy Customer Service Week

I just read on Bruce Temkin's Customer Experience Matters blog, that this week is Customer Service Week. I really like how Bruce touches on the difference between customer service and customer experience.
My day to day job is heavily focused on the customer experience, specifically at kiosks. We have a strong focus on the UI customer experience due to that being the only option for customers to get their transactions completed. I believe that a good UI customer experience is imperative to an overall customer service strategy.
With most UI customer experiences, there is the chance of errors. How does your UI react when there are errors? Are there times when your UI cannot be the response mechanism to these errors.
We have a team that is focusing on non-UI atonement for issues that happen within our customer experience. We try to handle as many of our issues within the UI experience, but there are definitely issues that have to be dealt with and appologized for through other channels. This enhancement to our atonement process is definitely a key component in our customer service strategy.
 
Does your business have a proactive atonement program as part of your customer service strategy?

Sociology of groups - Annual Water Ski Weekend

This past weekend was our annual Water Ski Team alumni trip.  This is an alumni ski trip for members of my college ski team and their sig o's (and children).  This was our 7th annual trip and it is always looked forward to for all.  We typically rent a private water ski lake and spend the weekend camping and catching up with each other.  It was a great weekend and I look forward to next year's trip.

As my wife and I drove home, we discussed how great a group of people it is and were both humbled by how educated and intelligent the people are.  There were approximately 15 people who were on the team (+ 15 significant others).  Out of the 15 members, I think there were only 2 of us that didn't have any advanced degree.  While we all graduated from a great college, most of the members have gone on to get another degree.  The degrees range from teaching, mba, masters in childhood autism, environmentalism, dentistry, law, nursing, and I'm sure I'm missing some.

While I was one of the few without an advanced degree, it was great to be in company with such accomplished people.  My wife and I also discussed how only the 2 non-advanced degree people work in general business related jobs.  Most of the others work for the government, non-profit, healthcare, or other professional fields.

So why is this group so educated? And why are they not working in the "Business World"?  I began thinking through the backgrounds of many of these peolpe's parents.  And it seems like the families definitely have a large impact on the destinations of these people.

I'm humbled and proud to be part of this alumni group and look forward to the enlightening conversations we will have next time.

Future Think - What will today's children expect as they grow up?

This post is part of my ongoing conceptualizing of my Future Think process (see my past post Future Think - 3, 5, 10 years).  I'm beginning to construct a method for my team to create a forward looking development strategy.

As I mentioned in a recent post, this past weekend while I was listening to Dishy Mix, Adam Kleinberg mentioned how his kids have the "Tivo mindset". While listening to the radio in the car, they wanted to rewind it to hear the song again. Not on today's traditional car stereo, except if you're listening through the new iPod Nano (which allows you to rewind up to 15 minutes, see Terry White's review here).


I guess it should have been a sign for me when I was a child and we had that brand new VCR with a remote control, even though it was a hard line remote.  That was the coolest thing ever.  Did I ever think I'd be able to control my DIRECTV from my mobile phone?  I didn't even have a dream of having a phone that fits in my pocket and could be used anywhere I went. I'm sure there were people working on these innovations back when I was just a pup.


With children these days having the fortune of certain innovative products like Tivo, they're expecting our other technologies to work in similar ways.  I guess there are always certain technologies that are late to innovate and seem so archaic.  I hope our children push us to innovate for their sake, and for them to not accept that our radio doesn't have buffering.


As part of my Future Think concept, I'm going to add a section around "Thinking like a child".