What Can Napoleon Teach You About Building Business Empires?
Napoleon Bonaparte has carved his name in the history books. Some say he was a masterful soldier. Some say he was a very charismatic statesman. Others say he was the best strategist who ever lived. Yes, he was all of that. But he dominated the world only because of one of his tactics. He created and ruled an empire only because of one secret.
He gave away baubles.
What are baubles you ask?
Baubles are small ornaments that have little monetary value. But they do have great emotional value attached to them. Napoleon gave Baubles to his soldiers when they achieved a notable feat.
Giving baubles as rewards was the single most important tactic that helped Napoleon establish a humongous empire. This tactic achieved 2 things:
1. Made his soldiers fight harder to earn more baubles. 2. Made his soldiers loyal to him.
Give bonuses and rewards to consumers and you’ll soon build a business empire too. The consumers will buy your products for the bonuses. And they will stay loyal to you if you provide bonus goodies every so often.
Now that you know that baubles = bonuses and rewards, let us now see what kind of baubles should we give away and how to give them away for the best results.
=========================================
E. Joseph Cossman reveals the type of baubles you should give away
=========================================
E Joseph Cossman is a marketing legend. Wall street journal calls him: The Messiah of the free enterprise system. He made more than 1 million dollars through mail order. What’s more, he wrote a book about it (How I made $1,000,000 in mail order – And you can too!), which became a classic. Yet even he sometimes had trouble selling products.
Cossman started selling spud guns. Spud guns were little toy guns that used potatoes as bullets. You simply dug the barrel of the spud gun into the potato and when you pull it out, a small piece of potato would stay in the barrel.
Cossman sold the spud guns through grocery stores with some success. But he wanted to make tons of money fast. He knew by experience that giving bonuses boosts sales. So he convinced the grocery store owners to buy his spud guns in huge quantities at a discount rate. The grocery owners could then give away the spud guns for free as a bonus when people bought a bag of potatoes, driving the sales of potatoes up.
Unfortunately, the bonus tactic didn’t work. The groceries didn’t sell more of potatoes. And the owners were not pleased with Cossman, from whom they had to buy the spud guns that were now sitting in the stock room gathering dust.
So Cossman tried one more tactic. He convinced the owners to reverse the bonus tactic. For every spud gun people bought, they would receive 1 bag of potatoes for free. The entire “spud guns + potatoes” package still sold for the same amount of money. But by reversing the product and the bonus, the sales of spud guns and potatoes went through the roof!
Cossman revealed that giving a bonus with your product can boost sales as it provides one more reason to people to buy your product.
But the bonus should be something that people want. People didn’t want the spud guns. So they didn’t buy potatoes for a free spud gun. But they did want potatoes. And they bought lots of spud guns for a free bag of potatoes.
=========================================
Psychologist Priya Raghubir reveals what kind of baubles you should NOT give away
=========================================
Priya Raghubir is a social psychologist and a published writer. One day, she decided to observe how people value bonuses on products.
She got 2 groups of people to take part in an experiment. The people weren’t told what the experiment was about. One group was given a catalog that featured liquor as the target product and a pearl bracelet as a bonus gift. And the group members were then asked to evaluate the desirability and the value of the bonus – the pearl bracelet.
The other group was given a catalog that had the main product as the same pearl bracelet. And were then asked to evaluate the desirability and the value of the bracelet.
The findings reveal some amazing insight. The second group valued the bracelet much higher. Their desire to buy the bracelet alone was also more.
Peoples’ valuation of the bracelet lowered when it was bundled as a bonus!
Even though bonuses might make more people buy your products, people will perceive the bonus product itself to be of low value. So it might be a good idea to not to offer your own products as a bonus and instead offer some one else’s products as the bonus.
=========================================
Waiters show HOW to give away baubles
=========================================
Most waiters have it tough. They earn minimum wages. And they would be under the poverty line if they wouldn’t earn enough in tips. Many experiments have been conducted to see what increases the amount of tips a waiter received. Cornell University’s hospitality department conducted one such experiment. The researchers tried to determine how rewarding the diners at the end of the meal affected the tips.
What the researchers found surprised them
* When the diners were given one single candy after the meal, the waiters received a healthy tip of 15.1%
* When the diners were given a bigger reward: two candies after the meal, the waiters received 19% in tips.
* But when the diners were initially given one candy and then spontaneously offered another candy just before they paid their bills, the waiters received a whooping 23% in tips!
In both the 2nd and 3rd case, only two candies were given to the diner. But the way they were given increased the tips by an awesome 4%!
The experiment shows that the bigger the reward the better the client response.
And the response can be even better when you surprise the clients with a reward.
=========================================
Action summary:
=========================================
* Give away bonuses and rewards (baubles) to make people buy your products over your competitors.
* Give away only those bonuses that the consumers really want.
* Give away some one else’s products that compliment your own as a bonus.
* Surprise your clients with bonuses from time to time to make them buy more products from you and become loyal to you.
About the Author
Ankesh Kothari shows how small business owners can build a smashing brand on a shoestring budget, on his website, http://www.BizTactics.com. Go visit the site to read more marketing case studies with which you can blow your competition away... even if you have little or no money.
Tell others about
this page:
Comments? Questions? Email Here