ProfBruce's definitions

Reverse Marketing

Reverse marketing happens when an organization’s planned marketing campaign results in negative consequences for their brand. The reason a brand is important is, in part, that it creates trust in that organization, which, in a for-profit business, results in higher sales. Reverse marketing works in the opposite direction.

“Coca-cola decided some years ago to introduce New Coke and stop producing Coke Classic based on blind taste tests that indicated younger consumers preferred the sweeter taste of Pepsi. What they didn’t take into account was the loyalty of Coke buyers to the classic formula. The result was a rapid climb down by the Company and massive reverse marketing.”

by ProfBruce October 31, 2009

co-branding

When brands agree to cross-promote each other. In effect, each brand becomes a separate sales channel for all the others in the group.

When a driver of a high end sedan gets out of the car wearing an expensive watch and a bespoke suit, now that is co-branding. Each of the three brands have agreed to promote each other in RL (Real Life), on television, in print, online, in social media and on the mobile web.

by ProfBruce May 14, 2011

1 sigma

It is the aim of great manufacturing companies (starting with Motorola in the 1980s) to remove substantially all error from both their fabrication and business processes—their goal is to achieve 6 sigma; that is, an error or defect rate that is equal to or less than: (1 – 99.99966%). Looked at another way, this implies that only one in every 294,118 things that a six sigma company does is defective and has to be either discarded or done again.

Now most service businesses can not possibly come close to matching a fabrication company but they should be able to achieve a 3 sigma state. Unfortunately, many service firms are in effect 1 sigma enterprises: that is, they have a level of proficiency with an error rate that is, basically, equivalent to two out of every three things they do are wrong (actually, it is 2 in 2.899 but at that point who cares, it’s pathetic.)

If you did nothing other than focus on getting your error rate down, which means doing things right the first time, practically every time, you could significantly increase your productivity and bottom line even if sales (top line revenues) didn't budge. A service business should aim to be at least 3 sigma not 1 sigma enterprise.

One way to help you get there is to start measuring things to see what your error rate is in the first place. You can not hope to improve unless you know your original state. The Hawthorne Effect suggests that as soon as you start to measure a thing, people will alter their behavior to improve their scores often resulting in significant increases in production and productivity.

by ProfBruce April 21, 2011

Social Commerce

Where consumers band together online to influence, collectively, the price of a good or service, a form of social shopping.

A website or mobile app that, reduces its price for every like or tweet that potential customers generate as a group or where customers can get enough of their friends to buy ecommerce coupons, are engaged in forms of social commerce. In effect, consumers are banding together online to influence the price at which they are willing to buy and companies are paying their customers to do some marketing for them.

by ProfBruce April 20, 2011

strategic investor

A strategic investor is someone who has a strategic reason for investing in your enterprise; that is, they have an over-arching interest in your success. You can find strategic investors by looking through your supply chain and your value chain. Even your competitors can be a source of strategic start-up capital if they are looking to you as a new co-opetitor.

Say you are bootstrapping a new home builder. A trade creditor (supplier) might extend credit to you for building materials and supplies or a client might give you a sizable down payment on a home purchase; in essence, each of them become a strategic investor in your business. Or say you are starting an athletic wear clothing business, department stores might give you a cash advance in return for exclusivity or a sports drink company might sponsor your line of clothing in return for co-branding opportunities.

by ProfBruce April 20, 2011

Social Commerce

Where consumers band together online to influence, collectively, the price of a good or service, a form of social shopping and reverse pricing.

A website or mobile app that reduces the prices of its products or services for every like or tweet that potential customers generate as a group is using a form of social commerce. Or when consumers get their friends to buy a sufficient number of ecommerce coupons, they are engaged in social commerce. In effect, consumers are banding together online to influence the price at which they are willing to buy and companies are paying their customers to do their marketing for them.

by ProfBruce May 7, 2011

entrepreneur ethics

The moral underpinnings of being or becoming an entrepreneur include: 1. take care of your business, 2. so your business can take care of your family, 3. so your family can take care of you, 4. so you do not become a burden on your fellow human being or the state, 5. so you are in a position to help your fellow human being and 6. so they can help your business.

When you give a person a fishing rod instead of a fish, you have started him or her on the road to self reliance which is the sine qua non of entrepreneur ethics.

by ProfBruce April 21, 2011