Thoughts From The Cake Scraps

Oh Shoemoney, you are a money making machine.  And while I don’t think you are a prodigy of some kind, it is fun to see you at work.  Let us take a closer look at the e-mail you sent out last week.

Hi David,

I can’t tell you how excited I am!

The number of emails and calls I’ve been getting from people
telling me how they can’t wait for the ShoeMoney System
going live on the 26th, has been mind-boggling…

We’re going to do a LIVE Chat  tomorrow, share more details
about what’s inside the ShoeMoney System and answer all
of your questions.
Trust me, you’re going to be sorry if you miss this one…

******************************

**

SPECIAL ANNOUNCEMENT:
Live Chat with Jeremy Schoemaker
Thursday January 14, 2pm CT, 3pm EST
********************************

IMPORTANT: We can only support 300 users in the room,
so please signup now to reserve your spot.

==> http://www.shoemoneysystem.com/live-chat/

See you tomorrow!

ShoeMoney Media Group | 5550 S. 59th St., Ste 21 | Lincoln, NE 68516 | US
Unsubscribe from future marketing messages from ShoeMoney Media Group

I think the best way for me to review this is just in a simple list.  Now remember, Jeremy is a testing machine.  The structure of this e-mail is not an accident.  It is the result of many many tests with e-mail, or display advertising, or whatever advertising he does.  It is a highly optimized contact and it shows.  So here are 10 of the things that I picked up on:

1. Personal greeting: “Hi David”
2. Build curiosity…what is he excited about
3. Say that everybody is already doing it, don’t feel left out.
4. The system going live is “mind-boggling” implies that it is some how extraordinary.
5. Answer all “your” questions not only personalizes it but shows he’s going to give something to you.
6. “Special Announcement” which, interestingly, is the whole point of the e-mail so it’s really not so special.  But it sounds nice.
7. Uses his full name to establish credibility.
8. Has an arbitrary limit of 300 users.
9. Have to sign up up so he captures e-mails (in case you pass the info on)
10. “See you tomorrow” again makes you envision you will be there.

It is amazing how much optimization and tricks you can put into a single e-mail.  Did you see any others?

This has been a Thought From The Cake Scraps.

Internet, I cannot help myself.  All of the talk around this guy that tried to blow up a plane is frustrating me to no end.  Nobody seems to want to apply an ounce of rational thought to the situation.  I have no idea why our ‘leaders’ are ignoring any relevant information.  I guess that’s just what politics are.

Consider a few of the following topics that have been in the news:

Republicans have hinted that there should have been a big red flag next to the suspect’s name….how [could] the suspected terrorist could fly in the first place after his own father had warned authorities his son was possibly under the influence of religious extremists.

Well, let’s see.  I was listening to NPR and they had a guy on that said there are about 500,000 people on the watch list database but only 4,000 – 5,000 on the no fly list.  A single complaint from a father is not evidence to put someone on a no-fly list.  Wow!  That actually makes sense.  Score one for the FBI.  They don’t just randomly prevent people from traveling, they actually need evidence that they are a danger.  At least we are still of sound morals, despite what the supposedly ‘moral’ right would have us believe.  Hell, they may even want me on some watch list because I disagree with them.  Now if they would just ban anybody that is a religious extremist…oh wait, that would prevent some of themselves from flying.  Talk about a lack of research or any knowledge at all.

Obama said: “Had the suspect succeeded in bringing down that plane, it could have killed nearly 300 passengers and crew — innocent civilians preparing to celebrate the holidays with their families and friends.”

300 innocent people.  If they would have died that would have been tragic, for sure.  But how many people die every day in vehicles?  Well, so glad you asked.  The National Highway Traffic Saftey Administration has the answer for you.  In October of 2009 they released a report (link to PDF) that showed we were at record low traffic fatalities to start 2009!  We managed to get the rate down to 90+ people dead a day, with 16,600 dead through June!  Way to go USA!  So if we assume that more people travel during the holidays (and the death rate is deaths per 100 million miles traveled) then we may have had more people die over Christmas weekend on the road than if the guy would have blown the plane.  But this gets no mention.  Nothing is ever put in context with other issues.

Would it have been possible to prevent this guy from getting on a plane?  Yeah, I am sure it would be.  We’d have to burn our already partially scorched Constitution, but we could do it.  People complain about insurance companies reaping mounds and mounds of profits and yet who can rationally blame them.  We are in a culture that is fearful of everything.  People are willing to sacrifice everything to live “safely”.  So we buy insurance of all types, give up our privacy, and submit to what would once be considered clear violations of personal freedoms.

Meanwhile we ignore the clear dangers of driving (1.19 deaths per 100 million miles) and a multitude of other activities while pretending that terrorism is the biggest threat that we’ve ever faced.  It is far too easy to quote people, and yet I will do it anyway (from TenthAmendmentCenter):

The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. ~ James Madison

A government big enough to give you everything you want, is strong enough to take everything you have. ~ Thomas Jefferson / Gerald Ford

I think the TSA is far more of a danger to our Constitution than terrorists will ever be.  I am sure other disagree.  And I respect that people want to be safe.  But what is missing is the element of common sense, and I just can’t get over that.  A fact that I am reminded of every time I travel and see the TSA confiscate something.  I mean really, if they think the liquid is dangerous, shouldn’t they treat it as an explosive instead of just throwing it in the trash.  Or take away “weapons” but give real silverware in First Class.  My only fear is that some idiot at the TSA will read this and instead of applying logic to see how silly they are and how they are not making us safer they will see an opportunity to further tighten the straps while thinking “silly civilians, liberties are for kids”.

Would you rather have the illusion of safety or less hassle when you fly?

This has been a Thought From The Cake Scraps.

It is no secret that virtual goods are a hard sell for me; I need to get something not easily duplicated for my money.  After my first post Fantasy7 made the argument that people buy a Facebook gift for the experience.  They buy it for the joy of giving and for the joy of receiving.  A similar argument was made for in-game items for games such as Word of Warcraft.  Again, I understand this.  Which is why I then wrote a second post to address these issues.

Again Fantasy7 was back, pushing for virtual goods.  That music and games could be passed on.  That an e-book had just as much value as a book on the shelf you don’t read.  If you don’t intend to resell it they have the same value.  While, for me, this is an argument that is on rather thin ice I at least understand where Fantasy7 is coming from.  But I am not convinced and today I will make another case against virtual goods.

I believe some of the views toward virtual goods are shortsighted.  In reality, one can never know how long they will want something.  This is why craigslist become a hit quickly and why rummage sales will never go out of style.  At some point in time you will have stuff that is either no longer of value to you either because it is junk or too worn/old for you.  At such a point one could just throw it away.  Or one could gift it.  Or recycle it.

Lets take one example most people can get on board with, a car.  A car is not something that one generally just throws away.  Nor is it something that is generally just gifted – though I do recognize that children may get one as a gift.  I think everyone can get on board with the idea that trashing or gifting a car is not the most common thing to do with it.  Even though the goal is to get rid of the car, people still sell it because it retains some value in some way, even if it is just for parts.  The physical item has value and always will, if only as scrap metal.  It may have too small of a value for the owner to do anything but trash it, but there is still value, however small.

Now to my point.  Digital goods only have value to the original seller.  If this is not the case, can someone please show me where I can sell my iTunes songs I don’t want?  Or where to unload my XBox Marketplace download of the original Halo?  Only iTunes and Xbox make money in these spaces.  Not the case with purchased games where I have a physical, non-easily reproducible copy of the game.  Yes it is a copy of some original source code, but there is the case, manual, artwork, etc. that are not easily copied.  If you buy an iTunes song or movie it does not take much to make a copy, copyright protected or not.

My larger point is that any virtual good that you purchase  is a sunk cost.  End of story.  This is simply not the case with physical goods.  Forget the arguments about worth and experience and all that.  Even Fantasy7 can’t argue with the statement that a virtual game or song is a sunk cost (it may be different for online game merchandise, though as soon as the multi-player server goes offline, the player is left with nothing, no matter how much real money they spent).  It is simply a fact.  And this is why I will always prefer a physical good with any purchase I make.  I cannot predict the future, nor can any of you, so why not keep my options open.  The physical will always retain value.

So what prompted this post?  I was going to throw away some old XBox games.  But, I checked online to see if they were worth something.  Anything I could get for them would be gravy since the plan was to junk them.  And believe it or not, Amazon is selling WWE Raw 2 for $89.94.  Others list it new at $29.99 and used at $7.76.

It’s not much but it is a free lunch.  Assume that you have just the download from Xbox Live Marketplace.  Who’s paying for your lunch?

This has been a Thought From The Cake Scraps.

Advertising.  That is the motto of seemingly every business you hear of today.  They will provide a service that is free to the customer and it will be supported by advertising.  Even Twitter said today that they will be launching an advertising business soon.  Fine.  I get it.  There is tons of money to be made with advertising.  Look no more than the post on Shoemoney where Jeremy says that:

We allocated them a small budget of like 100k for a week and they did incredible.

A SMALL budget of $100,000 per WEEK.  Yeah, there is money to be made in advertising space on your product/blog.  It is a great idea.  I have ads on this blog to help offset the cost of running it.  Hey, if it works that is great.  And best of all?  The consumer gets the content free.  Right?

Well, that really all depends on your definition of free.  You get a discount at your local supermarket when you swipe your shopper card.  You earn rewards on your credit or debit card.  You get to use a product and it costs you nothing.  But one must stop for a moment and think about what is really happening.

Business are generally not in business to be a charity.  Otherwise they would be a charity; that’s how these things work.  So that means that whatever strategy they are employing at the current moment is probably set up so that the company makes money.

Now of course there are two sides to every coin.  You swipe your shopping card to get a discount.  The company collects the data and learns from it.  They place things near each other to cross sell.  Is this a service – they want to make it easier to shop.  Or is it trickery – you will buy both items even though you only need one item.

The same is true with credit card loyalty programs.  Of course you get rewards so you are happy, but the company is also collecting data on you buying habits – maybe to send you offers in the mail.  Like the stuffers that come in some bills.  You don’t really think that stuff is all random do you?  (well, it might be, but not if the company is properly leveraging the data)

And of course the ads for free services.  Even if you never click them, you see them.  They are the billboards of the internet.  You just have to trust that the display advertising works (or test into it).  They are impacting your perception of the brand or at least keeping it top of mind.

Perhaps these are trade-offs that you willingly make.  Maybe you think you are the exception and don’t see it all.  That may be the case, but there are lots and lots of ever increasingly sophisticated way to trick your brain.  What our brains react to, how they work, what areas are activated when image A is viewed vs. image B.  Really, there are places doing consumer research where they are actively scanning the brain of the volunteer while they participate in the study.

It is a very interesting, but possibly scary field – for the consumer.  So when you see all of these ad supported things and think it’s just free, consider what you are actually selling to get it.  Yourself.  And as the techniques get increasingly intelligent, the idea of ads everywhere gets increasingly uncomfortable.

What do you think about all the ads?

This has been a Thought From The Cake Scraps.

Branding.  It is a very interesting thing; it is what the people associate with a product.  This seems simple enough, but all in all, it is a very odd concept.  The legal system allows for one to sue for defamation, so one would assume that this means that somebody must own the reputation.  But can you really own a reputation?

I mean, reputation is just a collection of other people’s thoughts about you.  Can you really own that?  Then you are asserting you own other people’s opinion.  It is all very odd.  But it is all very important.

That is why today is a very special day for Lands End, my employer.  Today was the official launch day of the new brand called Lands End Canvas.  It has some very interesting clothing coming from Lands End.  I think that this is a great step for Lands’ End.  It speaks to our vision for the future and a new avenue to reach our customers.

I wish LE Canvas the best of luck.  Obviously I will not be able to give any updates on it here, but keep your ears and eyes open and you just may come across it.  I have already got my order and will be sure to share my thoughts on it with you.  But no matter how it turns out, it is an exciting next step for LE.

What do you think of the LE Canvas site?  And check out the My Canvas section when it’s live!

This is a very interesting topic that was brought to front of mind due to a recent Fortune magazine article on it.  Actually, it made the front cover.  I think that the article was very well written and, furthermore, I thought I should chime in.

I think the case for legalization of cannabis is crystal clear for very simple reasons.  And if someone can refute my points below in any reasonable manner, then I may reconsider.

First I will hit on the two most obvious points for the legalization of cannabis:

• Cannabis, in any form – smoking to brownies, is not as addictive as cigarettes and cigarettes are legal.
• Cannabis, in any form – alters your mind  to no greater extent than alcohol does and alcohol is legal.

So beyond the issue of individual rights (or the ties to racial and ethnic fears that led to the criminalization), which is a whole different topic, cannabis should be legal for no other reason than that we currently allow other drugs that are both more addictive, more mind-altering, and worse for you with the only requirement to getting them being your age.  How does this make sense?

It seems to me that if one wants cannabis to be illegal they would also have to be against both alcohol and tobacco.  How could they be for either of those drugs and against cannabis and not be a complete hypocrite?  But let us not stop there, and explore a bit more.

Then there are other arguments, such as the violence surrounding cannabis.  Somehow these people must be forgetting the prohibition era in the early 1900’s where cannabis wasn’t the problem but alcohol.  The very drug that gave LOTS of money to mobsters and gangs and was the cause of countless acts of violence.  So I must ask again, how is the prohibition of cannabis different than the one against alcohol?  Why are we trying the same thing (prohibition) and expecting different results?  I just don’t get it.

Okay, so that’s not the reason, but there must be one.  How about the fact that it is a ‘gateway drug’ to other drugs.  Interesting idea but it fails for the same reason as the other arguments, a double standard.  Just because alcohol and tobacco are not illegal does not make them any less of a drug.  So then, if cannabis is a gateway drug, what does that make tobacco and alcohol?  Anybody using harder drugs probably is using those two drugs at least as much as cannabis (but probably a lot more) and arguably at an earlier age too.

And as if we needed any additional icing on the cakes, there is the health aspect.  No, I’m not even talking about the medical uses that our government knows about (and actually dispenses cannabis to people – yes the US gov has a program that dispenses medical cannabis).  Beyond that blatant hypocrisy (as if we needed another example) one can just look at four additional facts:

1. In 1988 Judge Francis Young stated: “Marijuana…is one of the safest therapeutically active substances known to man” when ruling on a marijuana case.  It is basically impossible to overdose on cannabis, unlike alcohol that kills binge drinkers and alcoholics every year.
2. Many studies (according to Fortune) also say that smoking cannabis (which there are many other ways to consume than smoking) is less detrimental to health than smoking tobacco – no hard proof that it causes lung cancer exists yet.
3. Marinol, a synthetic version of the active psychoactive agent of cannabis, was approved by the FDA in 1986, further verifying that it has legitimate medical uses.
4. When marijuana was criminalized in 1937 it was done “over the objection of the American Medical Association“.

As one final point (last one I promise) the money aspect comes up.  From Fortune 9/28 p. 148:

Assuming a national consumer market for marijuana of about $13 billion annually, Harvard economist Jeffery Miron has estimated that legalization could be expected to bring in state and federal governments about $7 billion annually in additional tax revenue, while saving them $13.5 billion in prohibition related law enforcement costs.

That’s an estimated $20.5 BILLION in additional money for any number of activities, including law enforcement on the very gangs that that money would have been going to.

Knowing all of this, does anyone have any ideas why it should be illegal?   I’m just plain baffled.

This has been a Thought From the Cake Scraps.

If you’re like me, you see a bed full of pillows and wonder what the purpose of all of them could possibly be.  After all, if one were to use the bed, all of the pillows would have to be removed and the put back on after the cat nap.  It is very easy to think that the extra pillows have no purpose.  But, I have found that there is a very subtle error in this way of thinking.

Many things are not designed with practicality in mind.  Yes, the widget has to accomplish the job it was made for, but it also has to look good doing it.  Here again you may argue that as long as it gets the job done, it doesn’t matter; again I have to say that there is an error in that logic.

The common error between the throw pillows and the widget examples is that it ignores that instant judgment that people make upon viewing the object.  The reality is that many, if not all, people judge a book by its cover.  Knowing that, it is easy to see how this ties into business.

The experience that people have with your product matters, the story it tells matters.  What is often overlooked is that this extends beyond the product to the company itself.  This includes everything form retail locations to corporate headquarters.  Money has to be spent to preserve the experience and the brand image.

I have a great example.  Out at Lands’ End headquarters in Wisconsin we have both offices and a distribution center.  Out in the back there is an area where semi trailers are parked that are not being used.  I have not idea how much space, but it can hold a few.  What I noticed on a run the other day is that there is a big grass mound/hill between the offices and this parking area.  It has been there for a long time, but how much did it cost to build it?  I have no idea, but it also makes me wonder, how many people decided to work for Lands’ End, or how many vendors gave a better deal, or how much business has been done because of a great experience on the campus.  An experience that was great, in part, because they saw a beautiful grassy hillside with trees instead of parked semi trailers.

That is why as much as I wonder why a business would pay for an office in downtown NYC or why people spend what they do on nice suits, or why a company does what might be considered ‘fat cat’ spending on things such as landscaping, art, architecture, and the like…as much as I wonder about all of that and as much as people love to criticize it I think at the end of the day it matters.

People will argue until they are blue in the face that they would like to just have something that gets the job done and that all that spending is wasteful.  Mostly this is because we want to believe that we are completely rational and don’t make ‘shallow’ decisions.  But as much as we would like to believe this, it is simply not true.

What do you think about throw pillows?

This has been a Thought From The Cake Scraps.

I enjoy a drive through the countryside every now and then.  There is something that is just relaxing about it.  You just get to cruise along, maybe have the windows down and the music up.  If you are lucky then you have a few hills and turns to keep things exciting.  And if you are in the right spot, at the right time of year, you may even stumble across a home selling whatever happens to be in season.

Often times these places have handmade signs listing what is being sold and what price it is being sold at.  Perhaps there is also some obnoxious arrow pointing you up the driveway.  And if they really have it together, they may have a flag waving in the wind with the word “OPEN” on it.  That will really get people to stop in…or will it?

When I see an “OPEN” flag I cannot help but wonder if the place is actually open.  Do they really take it down each day?  What about when I drive by after suppertime and the flag is still displayed?  Should I assume that they are still open for business?  It seems like a good idea to have the flag, but I’m just not sure how genuine most people think it is.  Oddly enough, I think that a cardboard sign will actually help because I know that can’t be left out very long before it falls apart.

Another idea would be a light.  If I see that there is a light on the flag or sign, then I am more likely to believe that it is in fact open.  All of this is interesting, but it paves the way for a broader issue: credibility.

A home shop with a cardboard sign or “OPEN” flag has plenty of credibility.  A light that is turned on and off has credibility.  The problem is the open flag always looks the same.  It is always there.  Nothing is ever different.  The owners are not considering what leaving the flag up might do.

In the current business environment, this is a critical issue.  How credible are your promotions (because everybody is running them)?  Are you running the same thing over and over?  This will work just fine for a short amount of time, but make sure that you have an exit plan.  Even if you take pause for just a week you rebuild credibility.  You rebuild a scarcity factor.

If the “OPEN” flag isn’t always up, then I know that I had better stop in when it is up because otherwise I may miss my chance.  There is no urgency if there is always a sale.  I can’t stress this enough: Small things, the ‘scraps’ as I like to call them, matter.  Leaving the flag out and the promotions running may be the easy path, but sometimes it pays to take the path less traveled.

Do you believe “OPEN” flags?

This has been a Thought From The Cake Scraps.

Recently I got quite the offer from Fortune Magazine on a 3 year subscription.  I have always thought about getting a subscription but it always seemed just a bit to expensive for me.  If you know me you know I take my money very seriously.  So after much consideration (mostly in the form of having the offer sit on my desk for a few weeks) I decided to go ahead and send in the form.

At this point I would like to admit that I am a credit-card-aholic.  I hate to use cash and never use a check – at least when it can be avoided.  Its not that I rack up the debt, it’s more that I just prefer it as a form of payment.  I like the perks that it offers.  I like the convenience of it.  I like being able to review my transactions BEFORE the money is taken out of my account.  And that’s my beef with debit cards.  I can contest a credit card charge before the money ever leaves my holdings.  I have to get the money back if there is an error and I used a debit card.

With that background in mind, I move on to my issue with Fortune.  On the slip they provided, an option was to be billed later (and probably use my own stamp), send a check, or fill in my credit card info.  I did the credit card info.  It was just the easiest and quickest way to pay.  I slipped it into the provided return envelope (postage paid by them), licked it shut, and was all ready to send it off when I noticed something odd.  I could basically see right through the paper and read my credit card number.

This didn’t take some special light, or even holding it up to the light.  Literally all I had to do was set it on my desk and press down on the envelope and I could see, plain as day, my credit card number.  Hmm….seems a bit odd.  So I didn’t send it and instead put in an inquiry to Fortune Customer Service – to verify that the offer was in fact real – and said the following:

Comments : Hello – I got an offer in the mail for Fortune that advertises a corporate rate of x yrs. for $xx. The listed address is PO BOX 61xxx Tampa FL 33xxx-1xxx I have filled out the form, but before I send it off, I wanted to see if the offer was real. Main reason I question it is that you can see right through the envelope. Odd for an offer that asks for payment info to have a return envelope that is easily seen through.
Thanks,
David

It took them nearly the full 2 business days they quote to get back to me and they said:

Thank you for contacting FORTUNE Customer Service.

Yes, the offer is a legitimate offer from FORTUNE magazine.  Any further questions, please let us know.

We appreciate this opportunity to be of service.

And then they had a bunch of links to useless info at the bottom.  Does this strike anybody as an odd response?

Here I am, a potential customer.  I was suspicious about the offer but I didn’t discard it.  I went through the trouble of making sure it was real.  But more importantly I let them know why I was concerned and they didn’t even address the issue.  And they certainly didn’t thank me for bringing it to their attention.

Keep in mind that this is Fortune magazine.  One would think they would be savvy about the real danger of identity theft.  And yet, they seem to have no problem giving you return envelopes requesting payment information that can easily be seen through.

This is the sort of stuff I just don’t get.  How can they totally ignore the issue in their response?  I know there is just a small chance of anything actually going wrong but in the days where it is not difficult to hear about one story after another about a stolen identity, one would think a magazine of Fortune’s reputation would do what they can to protect the people they are prospecting to.  I don’t want to make a big issue out of nothing, but I can’t help but feel that being able to see my credit card number and expiration date through a business reply envelope is a big deal.

What do you think?

This has been a Thought From The Cake Scraps.

When you are driving along the highway and suddenly notice that you are almost out of gas you want one thing: gas.  You glance up and see a huge billboard advertising the very thing you are looking for.  It talks about the “Cold Beer”, “Fresh Coffee”, and “Exit Number 32” but most importantly it is a gas station.  If you are lucky it even has the current price.

You quickly look for the small green mileage posts to figure out just how far that is.  After a few moments you see that you are at mile post 30.  Only 2 more miles.  You feel a bit more at ease.  About a minute or so later you see the familiar signs listing Food, Gas, Lodging and the like. A moment later you are upon the exit ramp.  You take it off cruise control and start slowing.

Halfway down the ramp you see the sign with the logo of your favorite gas station and an arrow to the right.  You roll up to the stop sign at the end of the exit ramp and turn right.  No gas station in sight.  You drive along anyway until you finally just turn around and continue on to the next exit.  Now you’re angry.  The gas station was only another mile ahead, but you will never see it.

I have one thing to say to businesses that are on these exit ramp signs: don’t lead people on like this.  I’m not sure what the rules are, or if it varies state by state, but I hate it when locations on the exit sign don’t have a distance on them.  It is such a small thing to do.  It’s not like the distance changes each day.  There is just no reason not to have 1.2 miles or 5.7 miles or whatever underneath the logo on the exit ramp.

Perhaps it is just me, but I like to know the distance to my destination.  It is so easy to add this to the exit signs and yet for some reason no exit around me has that piece of information.  How many displeased customers are created because of this?  More importantly, how many people does that business lose because people can’t see it from the highway and don’t know how far away it is.  If they know it was just a mile away perhaps they would take the exit, instead the just keep driving hoping that the next exit will have a sign visible from the highway.

Small things, like distance to location on the exit sign, are so critical in providing an optimal customer experience.  This blog is built on that very principle, that every little scrap of information has value; if you overlook the scraps (also called “the long tail”) you are going to miss huge opportunities.

Does your area have distance on the exit ramp signs?

This has been a Thought From The Cake Scraps.