Frictionless retail: lessons learned from a man who turned 112 can openers into an empire.
It's 1977. In Clearwater, Florida, DJ Bob Circosta has a news and talk show on a local AM station. A short-on-cash advertiser asks station manager Lowell "Bud" Paxson if he can pay with merchandise. He offers 112 Rival electric can openers. In avocado green. It was the '70s.
The can opener retailed for $9.95. Circosta would sell them on-air. Listeners could drive down to the station and pick them up. Circosta recalls his horror. He was a newsman. He had ethics, integrity. Paxson told him he'd get a dollar for every can opener sold. Circosta replied, "Boy, that's a great looking can opener." They sold out. Paxson quickly realized this was easier and more profitable than selling air time.
Paxson and station owner Roy Speer thought the gambit would work on TV. The Home Shopping Club launched on local cable in June 1982. Two years later, sales were $11 million. In 1985, the Home Shopping Network (HSN) was born. It changed the way we perceive television and how the television business operates.
HSN was the first network composed entirely of infomercials. A perfect marriage of TV and retail. Dr. Josh Meyrowitz, professor of communications at the University of New Hampshire, explains, "The appeal of HSN is that it has all the positives of the personal interaction, but you don't have to worry about being in danger, or what you're wearing, or whether you're polite." Paxson eliminated a friction point for consumers. Every advance in retail involves a reduction in consumer friction, from barter to stores to strip malls and mega stores, catalogs, TV shopping, and, of course, e-tail.
Morley Safer of "Sixty Minutes" asked Paxson in an interview why HSN sells so much jewelry. Response: "Because they buy it."
Paxson understands it's easier to give an audience what they want than try to create an audience for what you have. Obvious -- but how does he know what the audience wants? Testing, scrutinizing data, optimizing scheduling. HSN has limitations. It sells product sequentially. It must sell what sells best at given timeslots to reduce customer friction further. Jim Novo, former HSN VP of marketing, explains, "If data showed blenders sold best from 3 pm to 4 pm, we sold blenders from 3 pm to 4 pm."
HSN created models based on customer behavior. Selling works best when friction is reduced. Barriers to access are eliminated. When a customer needn't get into a car or find time to go to a store, there's less friction. Novo elaborates, "The World Wide Web is essentially a frictionless environment, or should be, if people paid attention to their audience."
What does your audience want to buy? They're online. Your Web logs are a gold mine of information about your customer's wants. A quick and dirty way to tell if you "stand in front of your audience" is the words and phrases they use to find you. Do they match your expectations? Are you talking to customers in the language of your customers, about what is in the hearts of your customers?
If they don't match, chances are you try to sell what you have instead of what customers want to buy. Conduct research on consumer opinion sites and message boards. Investigate search engine keywords. Learn how customers search for you. Then, engage them in a persuasive dialogue that answers their unspoken questions.
Alternately, you can always try to pay your bills with can openers.
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Bryan Eisenberg is coauthor of the Wall Street Journal, Amazon, BusinessWeek, and New York Times bestselling books "Call to Action," "Waiting For Your Cat to Bark?," and "Always Be Testing." Bryan is a professional marketing speaker and has keynoted conferences globally such as SES, Shop.org, Direct Marketing Association, MarketingSherpa, Econsultancy, Webcom, SEM Konferansen Norway, the Canadian Marketing Association, and others. In 2010, Bryan was named a winner of the Direct Marketing Educational Foundation's Rising Stars Awards, which recognizes the most talented professionals 40 years of age or younger in the field of direct/interactive marketing. He is also cofounder and chairman emeritus of the Web Analytics Association. Bryan serves as an advisory board member of SES Conference & Expo, the eMetrics Marketing Optimization Summit, and several venture capital backed companies. He works with his coauthor and brother Jeffrey Eisenberg. You can find them at BryanEisenberg.com.
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