Posts Tagged ‘business cliche’

Upselling

7 December, 2011

Upselling is the practice of offering the customer a little more than their original purchase request. The most well-known example is probably the McDonald’s “would you like fries with that?”, in fact whatever you order at McDonald’s you’ll be offered one more thing.

It’s a normal part of service in the US, but it’s less common here in the Netherlands, and there have been times here where I’d have welcomed a little upselling rather than trying to catch a waiter’s eye to order water.

But last week I had a sales experience where upselling almost lost them the sale. I wanted a small item, a nail buffer. I imagined the price would be in the 5-10 euro range. But I couldn’t just buy the buffer, I had to buy a set… I tested the hand cream, it smelt good. I agreed to by the set, my decision helped by it being on sale. At this point I’ve agreed to spend 3.5 times my initial planned spend.

But then they tried to upsell again, for twice what I’d just agreed to spend I could have a body scrub and a moisturiser – telling me that I had “skin discoloration” as part of the sales pitch. I declined politely. Then at the cash register, while I was standing with the money in my hand, I was asked again – I was so tempted to walk.

But on reflection I think the hard sale is one of the reasons this company is being forced to offer big discounts on their products. The Dutch are a bit allergic to this approach.

Image from island vittles via flickr

Glass Ceiling

14 October, 2011

This phrase is used to describe an invisible limit to a higher level. It’s most often used in reference to the barrier that keeps women from rising to the upper levels of management, despite having appropriate qualifications and experience.

Despite incredible success of individual women in business and public service roles, such as Meg Whitman, Carly Fiorina and Hilary Clinton, the glass ceiling still exists. Many women make it to upper management levels, but few – very few, make it to the executive level of large companies.

It’s phrase that was probably most used in the 70s and 80s, there is some debate about who first used the term, and the concept was already referenced by Orwell in the 1930s but in a discussion of class difference.

Now that education and employment opportunities are gender equal the term shouldn’t be needed any more, but women still earn just 80% of what men earn in the US, and few companies have equal representation on the board room. Some commentators connect that to women’s own behaviour in the workplace – we’re not competitive, we don’t fight for it, we don’t network as well as men do. There may be some truth in that; amongst my women friends it’s unusual to ask for a promotion or pay rise – relying instead on a manager noticing your good work.

image from Jonathan_W via flickr

Murphy’s Law

15 July, 2011

He wasn’t the first to say it, and he didn’t put his name to the law, and he was American not Irish.

Oh, and what he said was

“If there is any way to do it wrong, he will”

He was Captain Ed Murphy from Wright Field Aircraft Lab in 1949 and he was talking about a technician who repeatedly made mistakes.

It was later paraphrased to “if something can go wrong it will”, and now is used in any situation where something goes wrong that might have been prevented. It’s also often used where the wrong choice is made, for example, when it turns out that we’ve chosen the slowest check-out in the supermarket. Which is more a recognition that hindsight is always so clear, and that’s the sense in which I heard it this week.

The concept does predate Captain Ed, there are mentions back to the 1800′s, but it’s Murphy’s name that stuck with the modified saying.

And if Murphy’s law makes you feel a little down, I’ve heard something called Mrs Murphy’s Law “Murphy was an optimist”.

Photo from Tomsen via Flickr

 

The Elephant in the Room

30 June, 2011

Ever been in a meeting where there’s a subject that everyone is thinking about and no-one wants to mention?

For example – imagine you’re in a meeting with people from several different departments, regarding a possible new project. No-one wants to mention the ‘B’ word; budget.


Budget is the “Elephant in the room”, it’s obvious that it needs to be discussed but no-one wants to, just in case they end up paying

It seems to be a relatively recent term, OED cites its first use as 1959, but no-one seems to know where it came from.  A live version of the saying was created by Banksy in 2006, as a comment on our reluctance to discuss issues of great importance such as poverty.

I like the slightly surreal mental picture the phrase creates, and the situation doesn’t arise often enough in my world for this to really feel like a cliche. Maybe because Dutch business culture favours directness, my colleagues tend to just ask the question.

Image from PhotonQuantique via Flickr

Just in Time

14 May, 2010
clock

just out of time?

I was watching BBC a while ago and saw the documentary about John Lewis. I’m fascinated by this company, the legal structure is a partnership so they do not talk about employees but about partners. They pride themselves on service, which means everyone is knowledgeable about their product line and their call centre performs well.

But the business is under pressure. In the documentary two cost saving innovations were discussed; one was to outsource the call centres, which I can see as a potential cost saver but I wonder about the impact on the level of customer service. The other innovation was to reduce inventory further, to push for their suppliers to supply them faster and hold more inventory. In short “Just in Time” inventory management.

“Just in time” reduces inventory carried as the inventory for sale is delivered much closer to demand. With barcodes and automatic stock taking it’s become possible to use it even in relatively fast moving and dynamic retail environments.

The advantages for retailers are that they don’t have to store large amounts of inventory, and can be more responsive to customer demand. It does push the costs and risks of holding inventory back to the supplier. Some suppliers are charging a premium for supplying on “Just in time” schedules.

However if the distribution channel is not reliable or if the price is volatile it may be wiser for the retailer to choose to hold inventory to reduce the risk of running out of stock, or to take advantage of lower price offers.

“It’s a Cash Cow”

26 February, 2010

“Cash cow” is a term I usually hear used somewhat sarcastically in reference to a high margin product. The expression itself is probably pretty old, but it’s adoption into business is about 40 years old and comes from a matrix produced by Boston Consulting Group in 1968.

It’s a 2 by 2 matrix, perhaps one of the first to be popularised by consultants, with decreasing market share on the x axis and increasing growth on the y axis, the four quadrants are then categorised as shown below.

matrix

Matrix showing the categorisation of products according to market share and growth

A star is a product with high growth and high market share, this is likely to be a new product. A company should invest in further development and marketing of this product.

A question mark indicates that a product has high growth but hasn’t really gained a sizable market share, it may be a new product. There is a risk that such a product could turn out to be a fad, or may be vulnerable to competition. A company must watch the question marks carefully and judge investment carefully as the product could evolve into a star, or fall into a dog.

A cow, often termed a cash cow, has high market share and and low growth. It’s likely to be a mature product in a mature market. A company should exploit the revenues from the products in the cow quadrant to finance the investments in the stars.

The dog is in the fourth quadrant, and refers to products that have low market share and low growth, they may be products that have reached the end of their life-cycle. Companies should not invest in these products directly unless there is an opportunity to re-invent the product and relaunch it. In general companies should cease production of products categorised as dogs as they will quickly become unprofitable.

Of course this is a simplification but it does

Eat your own dog food

15 January, 2010
Lorne Greene advertising Alpo dog food

one of the original adverstisements

“We’ve got to eat our own dog food”

I’m not sure that I would eat dog food, even if I worked for a dog food company, so I find this saying a bit odd.

Apparently it comes from 1980′s ads when Lorne Greene made testimonial style ads (as shown on the right) although he never said that he ate the dog food himself. The source usually cited is the Microsoft email sent in 1988 entitled “Eating our own Dogfood” indicating that Microsoft should also use its own products.

It’s a good philosophy, for a start you gain experience of your own product from a client perspective – this should help you resolve bugs/service issues faster. It should also be a more cost effective choice over choosing an external supplier. The third reason, and the one generally meant by the phrase, is that you are proving your belief in your own products so it should be a reputation builder.

But dog food?

I think part of the reason this expression has gained ground is what I like to call the “gross out factor”. The idea of eating dog food is pretty off-putting so anyone that does so is really showing dedication.

Reverse Engineer

18 December, 2009

We’re dealing with a lot of uncertainty at work at the moment, even though we know what needs to happen it’s hard to see all the steps needed and all the transitions along the way. So today the suggestion was that we start with the known end state and “reverse engineer” what should be done.

Reverse engineer is a way to learn how something works by taking it apart, generally with the goal of either improving it or building your own version. It’s used a lot in reference to building/copying software applications, although it is a legitimate technique for identifying virus or intrusive code. It’s also used in the pharmaceutical industry to develop “generic” versions of drugs.

But if we don’t have the “end state” we can’t take it apart and analyse. We have a rough idea of several scenarios of what the end state might be. So it’s a bit like handing someone the box an iPod came in and asking them to reverse engineer that.

image from Catherinette Rings Steampunk via flickr

The Long Tail

6 December, 2009

The “long tail” is often discussed as being a good thing, an aspect of the new economy that will companies to compete on giving customers a wider choice, rather than on price alone.

It’s existence has been know to statisticians for a long time, and termed the long tail, the fat tail, the heavy tail, the power-law tail or Pareto tails. In a long tailed distribution there is a high frequency population, followed by a low frequency population following an asymptotic curve. In simple terms there are a few items often chosen and a great many items in frequently chosen. Years ago I was analysing sales data and noticed that my clients got more than 90% of their revenue from two products, one of which was about to go off patent. Their sales curve followed a extreme “long tail”, unfortunately a similar chart of their costs would not follow the same curve. This simple analysis was used by the company to re-examine the risk of the product going off patent.

Now the “long tail” is associated with opportunity rather than risk, and in ground breaking work in Wired by Chris Anderson the analysis showed that one area where Amazon was having some unexpected success was just in the scale of their inventory. Whereas a physical bookstore can only house a few thousand books, so they will chose the books the books most likely to sell. The online business cuts out a lot of the physical costs of doing business and can have a theoretical unlimited inventory taking revenue off books that are really not popular. This books sit in the “long tail” of Amazon’s inventory. So as long as their distribution and storage costs for this inventory remain low they can make profit right across their inventory.

As sales of the “unknown” product start to rise the former popular products in the head of the distribution come under threat. This is currently happening in the newspaper industry, whereas once a few publishers had control over almost all new publications the growing world of blogs and news websites mean that the news can now be delivered cheaply by a great many – and the audience attention is shifting to those sources which may be more customised to audience needs in terms of language, speed of release or point of view.


Cutting Edge

30 October, 2009

“We want to be smart innovators – not cutting edge” said my colleague. I still not exactly sure what distinction he was trying to make, since avoiding cutting edge sounds like a need to avoid risk – but innovation requires that you take a risk.

Cutting Edge

Cutting Edge

But what does “cutting edge” come from? And what does it refer to?

Now days it means something new, so new that it might not be fully tested or fully know.It’s often used to apply to technology.

In terms of origin I only find information that it come from the idea of a knife’s blade – the cutting edge – leading the cut.

To take the expression to extremes someone has come up with the phrase “bleeding edge“, maybe that’s what my colleague meant.

Image from mikearther via Flickr


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