The Secret Secret of Crypto-Marketing

But first... a history lesson.

It’s time for a little history for the young party crowd.  Not to worry.  It’s about a part of the history of booze.  Once upon a time, the U.S. federal government decided that the manufacture, transportation, possession or consumption of alcohol would be illegal. 

Naturally, the citizenry obeyed this prohibition with the same enthusiasm they upheld the 55mph speed limit. 

 

 

        Q:  “What the hell was the 55mph speed limit?

        A:  “Different lesson.  Before you were born.  Nevermind.”

Meanwhile, back in the 1920’s, alcohol prohibition created an enormous black market and people moved their drinking from public bars to parks, woods, homes and to secret, private clubs called “speak easys”.  (The term ‘speak easy’ is similar to the contemporary ‘on the down-low’.)

When prohibition ended in monumental failure in 1933, the speak easy lost its’ reason to exist.  Imagine my surprise when I innocently Ubering my way around the east valley of Phoenix, Arizona when a passenger asks me to take him to “that speakeasy on Indian School Road”. 

If you have lived in the valley your whole life and have never heard of “The Little Woody”, there’s no shame in that.  Unlike most popular drinking establishments, Woody’s attracts clientele by doing absolutely nothing to attract them.  There isn’t even as much as a sign on the building—just a sketchy, neon owlish thing inside a dark display window.  The entrance is around the back.  There’s no sign there, either.  There might be a small one, but if it’s there it is constantly being blocked by all the bodies trying to get in or out of the place.

 

 

Marketers are allowed to make up words, so let’s go with “Crypto-Marketing”.   How can such a concept—an approach that violates all traditional marketing rules—possibly work? 

Marketing your business by not marketing it is not a course they teach at school.  However, if done properly it can be counter-intuitive genius.  Crypto-marketing ignites one of the most powerful elements of human nature:  Curiosity. 

 

“Satisfaction of one's curiosity is one of the greatest sources of happiness in life.”
--Linus Pauling


When we know something is a secret, especially if it is also forbidden, our desire for it becomes overwhelming.  Tom Sawyer used it to get his buddies to whitewash the fence.  Secret societies use it to increase the desire of others to become members.  The Little Woody does it by doing absolutely nothing, in the tradition of prohibition speak easys. 

 

Bathing is Mandatory

This post is a follow-up to "Drinking the Poison".  The topic was the choice businesses have in the face of competitive threats:  Improve themselves or blame'n'complain about the competition.

The taxi industry is currently under threat from new app-based Ride-Sharing services.  These upstarts provide consumers with reliable, high-quality transportation service at a lower price.  Because taxi companies have long been regulated and protected by city governments, they have had little incentive to improve and innovate and suddenly find themselves being challenged.

To illustrate the dangers of corporate laziness and the short-comings of sharing beds with politicians, consider this article from the local CBS TV affiliate in Sacramento, California.  The new standards the taxi commission is attempting to impose on taxi drivers  reflect the most common taxi customer complaints-- particularly the "broken card reader cash scam" and cabbies with who are ill acquainted with American standards of personal hygiene.


http://sacramento.cbslocal.com/2014/03/18/sacramento-cabbies-upset-over-proposed-hygiene-dress-code-requirements/

Sacramento Cabbies Upset Over Proposed Hygiene, Dress Code Requirements

March 18, 2014 11:44 PM

 

Drinking the Poison

DRINKING the POISON

I grew up in a small city in Western Pennsylvania that was, at the time, a thriving center of coal mining and steel manufacturing.  By the early 1980’s, low cost foreign steel producers had kicked the chair out from under the area’s economy.  I recall a great deal of acrimony and bitterness as battles raged between owners and union employees and as politicians tried in vain to put their thumbs in the dike. 

There was one crucial participant in the problem that was rarely acknowledged:   the customer.  That may sound like academic pabulum, but the fact is that the buyers are the only ones who have the power of choice.  The only action that could have saved domestic steel production was being chosen by steel customers.

Despite the obstacles of foreign government subsidies, lower labor and environmental costs, domestic producers could have sought ways to streamline production, supply and distribution channels; create incentives for labor productivity; pioneered and adopted new, efficient technologies.  Labor unions could have worked with manufacturers to meet the competitive challenges and come away with a stronger, more productive, more profitable domestic steel industry.  They did not and they went dinosaur.  By putting all the blame for their problems on outside forces and nefarious “others”; by turning to politicians to use force against those “others”, the steel industry drank the poison and surrendered its power to change its own future.

 

 

-------------------------------

Fast-forward to a very different time, place and situation.  A different industry is facing a similar existential threat.  Traditional taxi service market share is dropping like a mudslide in the face of competition from Transportation Network Providers or TNPs.  I drive for Uber, the oldest and most successful of the new services--“oldest” meaning just over five years in business.  “Successful” meaning operations in 60 cities worldwide and 2014 revenues projected to top one billion dollars.  Uber is relatively new here in Phoenix, having entered the market last October.  Being new, it is common for riders to express how much they love Uber and/or how much they hate taxis.  Riders complain that taxis are expensive, unreliable and passengers never know what and who will show up at their doors, if they show up at all.  They tell tales of unscrupulous drivers taking round about routes, texting while driving, behaving rudely and pulling tricks like pretending their onboard credit card readers don’t work in order to pocket cash.

Using Uber, the entire process is done through the smart phone app.  Riders create an account using a credit card, so there is no cash and no tipping involved.  They can see a picture of their driver, photos of the driver’s vehicle and how previous passengers have rated their performance.  They can track the progress of the driver as he approaches for a pickup.  They can direct him or her to their destination or the driver will use GPS if riders prefer. 

 

In my experience, the most critical advantage that rideshare programs offer is the rider’s ability to rate the driver and the company’s ability to get rid of any driver who does not please the customer.  The fact that the business model includes incentives for performance is what gives Uber and other rideshare services their biggest competitive advantage of taxi services.  In the taxi world, there are no incentives to produce anything other than money.  Therefore, cabbies often do whatever they feel is necessary to maximize their fares. 

 

 

Like the steel industry of decades ago, the taxi industry seems determined to place the blame for their decline on outside forces rather than examine their own programs and look for ways to improve and be competitive again.  Also like the steel industry, they turn to politicians who have long regulated and protected them use the power of government force to crush innovation and maintain the status quo—dingy though it may be.  Again, rather than turn a competitive threat into an opportunity to improve, they drank the poison instead.

 -------------------------------

 Related Links:

If the idea that the domestic steel industry could have risen above the challenge of foreign imports seems to be delusional optimism, please direct your attention to an American steel producer that has grown to be the nation’s largest, most successful steel producer—NUCOR  http://www.nucor.com/

Here is a link from the poison drinking file.  To emphasize the fact that the taxi industry has no intention of being introspective or improving itself, they have hired a DC lobbying/PR firm to create a website warning the public of the dangers of using rideshare. 

http://www.whosdrivingyou.org/

Although their names appear nowhere on the site, the WHOIS data indicates the site’s proprietor is a partner in the firm.  Their own website indicates they do a great deal of work for political candidates and organizations.  I’ll leave it to you to guess whether they are on the right or the left. 

And finally, to put an even finer point on taxi company bullying, there is this from Chicagoland:  threats to out gay city aldermen if they do not ban ridesharing.:

http://chicago.cbslocal.com/2014/03/11/taxi-publication-threatens-to-expose-secretly-gay-aldermen-if-city-doesnt-ban-ride-sharing/

A TRIVIAL PURSUIT

More stuff an Uber RideShare Driver learns from Passengers

This week’s edition is a bit off the beaten path as far as topics are concerned.  I am including it for two reasons: 

1. It provides a fascinating insight into how the human brain functions.
2. Knowing this obscure piece of information might give you an advantage when playing trivia or trying to impress strangers at cocktail parties.

I had a passenger earlier this week who worked as a physical therapist and had a great deal of experience treating people with sports-related strains and pains.  

Eventually, the topic of over-the-counter sports medicine products came up and I was particularly interested in hearing her opinion of popular pain relief balms like Icy Hot or Ben Gay.  I am not particularly athletic.  OK, I am not at all athletic.  But I have used both of these products.  They do make your skin feel quite hot then very cool—an interesting sensation. 

 

Out of curiosity, I asked how these medications work.  The main ingredient, she explained, is menthol.  Menthol is a natural oil that dilates the capillaries in the skin, allowing more blood to flow and creating a sense of warmth. 

“So”, I guessed, “the heat created by the menthol helps the muscle to relax and reduces the pain, right?”  Wrong. 

 

Before reading ahead, please pause and take your best guess.  I’ll wait

patiently and hum the “Final Jeopardy” theme music until you are ready.

[musical interlude]

 

The way that these hot/cold heat rubs work is by making the problem worse, not better.  As my passenger explained, menthol is known as a “counter-irritant”. The sensation of warmth & cold overwhelms the sensation of pain.  The hot/cold feeling on our skin is simply a distraction. The pain is still there.  We do not notice it because our mind is too busy feeling the changing skin temperature.  So in reality, those rubs work the same way a magic trick works:  the thing we think is happening really isn't happening.  The magician simply creates the illusion that it is.  Now that is medical magic... kind of.

 

Every time I activate the Uber app and head out to drive, I meet fascinating people and often learn amazing things from them.  “Counter-Irritant”--  Now I know and so do you.

www.uber.com / discount code:  15OFFMILLER

How to "UN-Promote" a Successful Nightclub

Today’s Lesson from Riders:
How to differentiate and “UN-promote” a successful nightclub.

 

This lesson was taught to me in two parts.  First, I drove a couple to the club district and heard them discuss the new venue, (we’ll call it “Pi”) and the fate of the previous occupants of the space.

There is a new club in the heart of a popular valley entertainment district.  The space had been operated under a number of names in recent years but had failed to make a foothold, despite being surrounded by a number of very popular night spots.  It was smaller than its neighbors and had limited, street side patio space.  Visitors were also required to climb steps and enter through a door.  Unable to see what was happening inside, customers often opted for the more open, street-level competitors.

A bit later, I gave a ride to a young woman who happened to work at Pi.  Curious, I asked about how the young club was doing and if she was aware that the location had a bit of a jinx.  It is too early to tell—Pi opened only weeks ago—but I predict that it will be the first venture to find great success in that space.

Yes, she was aware that the club had changed hands a number of times.  But, she explained, the owner was employing a new strategy that was turning the clubs liabilities to his advantage. 

• Because the space was indoors and relatively small, the owner used that sense of privacy to create an experience that was very exclusive and intimate.
• Tables could only be obtained by reservation to qualified guests.
• The ratio of male to female guests was closely controlled, based on the desires of women who had been surveyed regarding what they liked most and most wanted to change about their club experiences.
• Similarly, the music mix was tailored to female tastes in order to attract them as well as to further set Pi apart from every other club in the district.
• Hi-top bar tables were replaced with booths and small rounds so as to differentiate the Pi experience and allow guests greater comfort and ease of conversation.
• Pricing was skewed deliberately high, in order to help maintain the exclusivity of the venue, attract affluent male guests and to further build that Pi brand.

Even after only a few weeks in business, Pi was attracting the valley’s most eligible affluent bachelors, professional athletes and other well-known figures.  As a business and marketing strategy guy, I have great admiration the new owner and the direction he is taking.  Very insightful.  Brilliant.  Sheer genius. 

 

Rideforhire University

Learn about the world while driving for UberX

Uber is an app-based peer-to-peer personal driving service that customers

love even more than they hate traditional taxi services.  Riding with Uber is safe, simple,

prompt, pleasant and creates an ideal, if brief, environment for great conversation. 

As an Uber driver, I get paid in both money and knowledge. 

Give people a friendly, quiet private place to chat for twenty minutes and

you can learn amazing things from a multitude of perspectives. 

 

EPISODE 1:  “The Interconnectedness of All Things”
 

“The Butterfly Effect” is concept from theoretical physics that describes how a small change in a complex system can lead to massive changes over time-- A butterfly flaps its wings, creating tiny vortices that cause other changes that eventually lead to the birth of a hurricane. 

April 11, 2011 a magnitude 7 earthquake struck the Fukushima region of Japan that caused severe damage to a nuclear power facility.  It would take a very large butterfly to create that amount of chaos but even so, Fukushima is waaaaayyyy the heck over there in Japan.  What possible effect could their disaster have on us? 

January 2014, early on a Thursday evening:  I am driving a couple from Arcadia to the Hard Rock Cafe across the street from the US Airways Center in downtown Phoenix—dinner and drinks before the Sun’s game.  They are a very pleasant pair of young professionals.  She works in the healthcare sector.  He is an engineer who designs components for nuclear power plants.  I asked if the nuclear industry was experiencing hard times after the disaster at Fukushima, (as I assumed it was.)  I was right… and wrong.  As the couple explained, the earthquake that struck over 4000 miles west of Phoenix and almost three years in the past had indeed had significant impact on their lives.

• Orders for nuclear components fell in the immediate aftermath of the earthquake while power companies, consumers and government entities remained uncertain about what to do to prevent reactor damage in the future.
• Within a year, nuclear power companies had worked with regulators to establish new, more stringent safety requirements.
• In order to adhere to the higher standards, many plants required equipment upgrades.
• For the past year, the engineer had been so busy keeping up with demand for new products that his overtime and bonuses were able to give the couple’s retirement account a kick start that they estimated would allow them to retire almost a decade earlier than they had been projecting.

Then it was my turn. 

At the time of the Fukushima quake, I was a partner in a young marketing firm in Pittsburgh.  Our firm had grown rapidly in three years, despite the economy.  Then, for a variety of reasons, the sales funnel simply collapsed, despite the best efforts of our talented business development team.  One of our most promising prospects had been a large machining firm that, like my rider, made parts for nuclear reactors.  The uncertainty caused by the earthquakes effect in the nuclear industry forced them to put off our contract indefinitely.  The nail in our coffin was the loss of one of our largest clients—a multi-line family of automobile dealerships.  They too cancelled their existing contract over uncertainty caused by the Japanese disaster.  Not only were their inventory of Toyota and Nissan vehicles threatened but their domestic lines were as well—because most of their electronic components were made in Japan. 

The end result:  My riders are blessed with a decade of extra retirement.  I move to Phoenix, drive for Uber to pay the bills while incubating what I am sure will be a successful Marketing Research and Strategy firm—in part at least, because tectonic plates shifted on the other side of the world.