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Your Side of the Fence

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I am up in Vail right now, it was dumping yesterday and the slopes were PACKED with people. I heard there were cars lined up the highway to get into Vail too. I was thinking about it. Here are all these people who like to ski, who were contemplating skiing, but were on the fence about going skiing until something (like 8″ of reported new snow) pushed a ton of them over the fence into the “Yes” zone. And BOOM, truckloads of people are lined up to ski.

At RegOnline we have this way-underutilized service called incomplete registration emails. What it does is automatically email anyone who starts registering but doesn’t complete (because we collect their email address first). The number of “incompletes” is like 3-t0-1 to every completed one. These are what I call the fence sitters. Right now the email just says “You did not complete your registration. If this was unintentional please click here to return.” My sense is that it’s almost always intentional because they are on the fence about whether to go to the event… and instead the email could help push them over the fence by saying “Here are 10 more reasons you want to go to this event.”

Which brings me to what I consider a HUGE theory of marketing. Most of our prospects are NOT solid Yes’ or No’s, they are Fence Sitters. Our job as marketers is to nudge people over to our side of the fence! Each incremental improvement tips a couple more percent of people to our side.

For example, about 8 years ago Vail decided to test out the Colorado card, an all-you-can-eat five mountain pass (with limitations on Vail & Beaver Creek) for an incredibly reduced rate of $399 (when most season passes were going for $1500/year). The theory was that they could get all those people who fence sit on whether to go skiing regularly at $65-$85 a day. It was a HUGE success for them. They got a ton of people who otherwise would have never spent $400 a year skiing, to start spending it. Plus, they now get most of their money up-front before anyone knew what the snowfall was going to be like!

At RegOnline we are constantly split-testing concepts to see if it nudges a couple more of our fence sitters to start using our service. How can we reduce the friction on the fence? How can we grease the fence and have it lean more towards us? Every little thing counts… simple navigation, headlines, call-to-actions, simple pricing, easy ways to tour the product. I’ll talk more in my next post about this.

So, my main point here is… think about YOUR fence sitters. How can you entice them to your side of the fence?!

Budgeting – a great way to lower profits

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Our new parent company, Active, asked us to make a budget for 2008 for RegOnline. This was the first time that we have budgeted in a way that was more than just “add 50% onto everything we did last year”. So we naturally went to all of our department heads and said “tell us how many people you think you’ll need in 2008”.

For my marketing department, while we didn’t really need anyone new to keep driving growth, I figured, just to be safe, we’d add on another SEO person, another web designer, another copy writer, another direct marketing person. I figured better to have it in the budget now, rather than look stupid later having to ask for something that wasn’t in the budget. I even thought maybe I’d be a hero for being way under my budget for the marketing department… and all the glory that could go with being such a good beat-the-budgeter. Well, we soon discovered that all of our departments must of had the same thought process too!

We compiled all the numbers and discovered, surprise-surprise, that while we projected a 45% increase in revenues our profits were going to be flat. So we looked at the budget and started slashing new head counts to make it more reasonable… but it was still way off the 45% growth in profits we were anticipating, pre-budgeting exercise. We started cutting even more new additions to get to what we knew the organic growth profit number could be, which was 45%.

How have we done budgeting in the past? We hadn’t! We just let the department heads come to us and BEG for more people one person at a time… challenging them to make an argument for why adding each additional person was good for profits… challenging them to think about how could we do things more efficiently so we wouldn’t need another person. In fact, I think our teams were actually excited when we recently asked them to do budgeting so they wouldn’t HAVE to beg for people anymore!

In the end of this first budgeting process, it became abundantly clear to me that budgeting is a great way to LOWER profits! I heard Google doesn’t do budgets either. When a department needs more resources, they ask for it. Maybe for the same reason… they’d prefer to have more profits!!

To Jump or Not To Jump

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I have to admit, the idea of selling RegOnline scared the hell out of me. I mean, it was exciting and rewarding, but when you’ve intensively grown a company for four years, it becomes such a huge part of you. It’s impossible to not wonder what will happen to the company once it changes hands – how will it expand? Will the marketing plans change? Will the employees be happy? Luckily, there’s no doubt in my mind that we sold to a very capable and respectable group of people. I never would have guessed that my questioning would be more internal – what will I do once the company fully switches hands? Will I successfully keep in touch with all the amazing people who helped grow the company with me? How will I continue to feel fulfilled from a business standpoint?

These thoughts made me start questioning if selling was the right decision. I mean – I know the ins and outs of this company, right? It’s so comfortable and familiar to me. I can tell you exactly which forms of marketing work and which ones don’t, what industries are more responsive to our sales force, etc. It’d be so easy to stick with RegOnline for another decade. There’s something so reassuring about complacency.

But then an experience I had came to memory… the Thanksgiving before last I decided to go to Rio de Janeiro with a friend. While there I had heard about how incredible it is to hang glide there (something I had never done). The night before we were flying home, I suddenly got the urge to try it out, jumped up from the table at the restaurant we were eating at, went to the hostess stand, and asked to use their phone, and called the concierge at my hotel to make arrangements to go first-thing the next morning before our flight.

So there I was the next morning, standing on the edge of a cliff in a jump suit half-listening to instructions from my hang-gliding guide while my body was screaming with terror as I looked out at the several thousand foot drop and miles of distance to the landing spot on the beach. The voice inside my head was racing with dialog… “Why am I doing this?!”, “I have a great life, I don’t need to throw myself off this cliff to improve it”, “Am I trying to prove something to myself?”, “Can I trust this guy I met 30 minutes ago with my life?”

Then a deeper voice inside me kept saying “Fly, fly, fly” like I had dreamed about doing in hundreds of dreams throughout my life. As I was debating this in my head, the instructor kept instructing me in broken English, straps me into the hang glider, steps us onto the ramp, and yells “One… two… three…” and starts running us off the ramp! Every muscle in my body seized up, I closed my eyes, and next thing I knew we were soaring through the air like a big bird. After I stopped screaming (some of my friends say like a little girl), all I could hear was the wind in my ears. We soared around the most beautiful mountainside of Rio, out over the ocean, and landed SAFELY on the beach. It was one of the most beautiful experiences of my life. Not only was I alive, but I was filled with new life, a new passion for why it’s fun to try new things, even if it feels stupid to throw myself off a cliff every so often.

So, there are two choices in life. There’s no right or wrong here, just two choices. Either you choose the comfort of complacency. Life is good so why change it? Or you choose to jump off that mountain. It’ll make you want to pee your pants at first, but if you have the guts to do it, you’ll have some great experiences and stories to tell.

The world’s best observers

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Last week I stayed at The Ritz Carlton. Checked out. A valet was standing at the back of my SUV and said “I loaded and arranged all your luggage so that you will have a clear view of the road through your rear view window.” I then went to get in the car and there was another valet standing there holding my door open and said “I put two bottles of water in your cup holders for your ride back to the airport.”

Wow! Someone at the Ritz must have observed the experience that their guests have driving two hours to the airport and thought about what would make it easier! They even have it in their Three Steps of Service… “#2 Anticipation and fulfillment of each guest’s needs”.

It dawned on me then that the next generation of best companies will be so because they are the best observers.

Organizations need to have more OBSERVERS… to watch how prospects and clients use their products and services.

Why do I feel stupid trying to open a new-fangled water bottle top? Or get frustrated calling Frontier Airline, spending 5 minutes navigating a phone tree, and then being on hold for 20 minutes?

Because they don’t have a Chief Observation Officer who can see how easy or hard of an experience their customers are having. I’m not talking about taking a survey. I’m talking about actually watching how they move through doing business with you.

I LOVE it when I come across an organization that anticipates my every need. They do it by watching lots of customers go through their process.

I believe most companies (including my own)…
1. Make changes when enough people complain
2. Think the little things aren’t all that important to do now
3. THINK they naturally anticipate peoples’ needs.

How to create exceptional organizations:
1. OBSERVE your customers and prospects
2. Make it EASIER for them.
3. Do it again.

Tell them why

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Event organizers who get hooked on the ease of having their attendees register online are constantly asking “How can I get more people to register online?”

As an experiment to try to help with that on our end, we added a “Why register online?” link to our registration forms. In a split test, it increased completed registrations by 1.3%. Not a huge number, but heading in the right direction in solving this challenge.

It also begs the question of what other Why’s could we explain further in our communications that will increase conversions?

Small is big

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The Long Tail fried my brain. I read it while on vacation and can’t stop thinking and talking about its implications.

All the small stuff amounts to a lot more business than the big stuff.

  • More non-hits songs are sold on iTunes than big hits
  • More people buy non-best selling books than best selling ones
  • More people register for small events than big ones

It is such a gi-normous shift from the world of pop that I grew up in… Casey Kasem’s Americas top 10, Happy Days, and The Detroit News… all overshadowed now by niche bands, hundreds of cable channels, and the internet. Love it!

Power to the little guys!

It’s fascinating to think about what’s changed:
1. Easier for more people to create music, books, movies, software and events because of technology.
2. Easier for people to get an audience for their content on the internet (Google, blogs, email, MySpace)
3. Easier to distribute content – no shelf space or massive distribution deals needed (Amazon, iTunes, YouTube).

So what does all this mean??
Businesses that focus on the small volume things/guys/products/events will thrive. Some of my friends are enjoying abundance in this new-world model…
StickerGiant sells all the little stickers that you could ever find on a bumper
ShipCompliant
provides software that niche wineries have dreamed of having
Wufoo makes it easy for any size organization to create online forms of any kind
PaySimple automating recurring billing and payment processing for any size organization.

And of course, my favorite…
RegOnline makes it easier for the 1.5 million smaller-sized meetings and events to manage their registrations. 😉

The most important number

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If you could pick only one number to measure the vibrancy of an organization, what would it be?


Most business people I know pick growth rates or market share.

Three years ago I picked referral rates… the percentage of clients that recommend us to other people. It seemed like the one number that said something about how much people liked our product, people, and pricing.

To drive this number, I started some unconventional experiments. They were based on my experiences of what causes me to like a company more.

1. We cut RegOnline’s advertising expenditures and instead hired more friendly, caring, smart support team members.
2. We eliminated commissioned sales compensation and hired more people who got pleasure from taking great care of clients (which several of my CEO friends told me I was crazy for not having sales commissions).
3. We even eliminated our Referral Incentives, and replaced it with a Thank You program where referrers unexpectedly received a gift after referring someone.

As we held our breath and watched what happened, our referral rates almost doubled! I thought I was really on to something original. Then a friend sent me a Harvard Business Review article called “The One Number You Need to Grow” by Fred Reichheld… the “one number” being a factor of “Would you recommend us to a friend?” The article outlines the strong correlation between a company’s Net Promoter Score and their growth rate. In fact, huge companies like General Electric are implementing this new theory company wide.

I’m excited to see this, because I love being inspired by more companies like Southwest Airlines, and Costco, Whole Foods and Nordstroms who create raving fans out of their customers… and experience unprecedented growth in their industries!

I’d love to share more ideas and inspiration. What causes your clients to recommend your organization to more friends?

Assuming too much

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We recently announced that we were discontinuing the offline credit processing option due to a tightening of security. We had several clients using this feature that weren’t happy with the announcement, and were even more upset that it was effective immediately.

The “Effective Immediately” notice was because we felt we had thought through all the ways clients were using the feature. Well, we quickly found out we hadn’t. Many clients were using the feature to approve registrants and charge their cards once they were “accepted”.

The opportunity that came from this is we are now designing a new feature that enables clients to “Approve & Charge” registrants in an easier way than the old work-around.

We also learned that no matter how much we think we’ve thought through changing or eliminating a feature, we need to give advance notice of the proposed change so we can hear their concerns… AND hopefully discover some more wonderful new opportunities to improve how RegOnline works for everyone!

We are sorry to all those that we unnecessarily panicked with this sudden change, and look forward to learning from this and doing better next time there’s a change to existing functionality.

Walking in their footsteps

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I sense a growing wave coming upon us. It’s a need to get even closer to our clients and how they use RegOnline. What they like. What frustrates them. What could amaze them.

I believe the most direct way to do that is to walk in their shoes more. To sit down with them face-to-face. Even better, face-to-face in their own offices where they can show us their day-to-day.

Walt Disney did it. He demanded it. So can we…

http://imagineerebirth.blogspot.com/2006/09/walking-in-walts-footsteps.html