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cash_register.jpgAs you probably recall from previous posts, discounting isn’t one of my favorite marketing strategies. In fact, one of the Burtisms I emphasize in my ECHO Marketing program is, “Don’t cut the price, build the brand!” I will urge you in the vast majority of cases not to lower your price, but to instead focus on ways to increase the value you deliver for your customers in such a way that they don’t mind paying a premium. On the other hand, we have to be careful not to overlook a strategy because we mislabel it.

Consider how Disney allows a person free entry into one of their theme parks on the person’s birthday. At first this looks like a discount. In fact, one could estimate that the average discount is 25%. For example, if a group of 4 visited the park, and one person attended for free, then the promotion was basically 1/4 or a 25% discount on the admission. However, the admission charge is really just a bonus when you consider Disney’s business model. It’s about as sure a bet as you can find that the attendees will spend enough on merchandise and concessions that will be bought inside the park to more than make up for any such “discount.” In reality, that discount of allowing free attendance once a year is a very insignificant marketing investment with potentially very significant returns!

You may find this Disney Lesson is something you can modify and put to work in your own organization, but the real lesson for us all is to remember to constantly seek profitable ideas from every possible source.

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broken_eyeglasses.jpgMarketing Legend Theodore Levitt coined the often-used phrase, “Marketing Myopia,” as a way to describe how sometimes a short-sighted vision can short-change an organization. Most people may not be as familiar with the term, Marketing Myopia, as they are the well-used example of how the railroad industry defined themselves as being in the railroad industry instead of the transportation industry, and thus lost many passengers/customers to the emerging airline industry by overlooking how to incorporate new technology into their ultimate mission. 

The famous 101 Ranch suffered a similar fate. They once offered the most celebrated wild west show around. They attracted the biggest name talent of the day, and provided their audiences with a return on their entertainment dollar many times their investment. They had an amazing run, but failed to notice how a new entertainment delivery system, motion pictures, was using them as a proving ground from which to scout future talent for their movies. Just about as soon as a star demonstrated exceptional talent and crowd appeal, they’d wind up with a lucrative film contract and a train ticket to Hollywood.

World Wrestling Entertainment (the WWE), learned a similar lesson. After a few of its big stars like The Rock, Dwayne Johnson, left at the peak of their wrestling fame to go into the movie business, WWE President Vince McMahon (who deserves his own place in the marketing hall of fame) decided they would expand their reach. Instead of just being in the wrestling business, they are now in the talent business. When a wrestler comes on board with the WWE, they essentially become WWE property. The wrestler becomes talent owned by the WWE, who will basically be able to capitalize on them as an asset from that time on. If a star wants to go into the movies, fine. The talent brokerage division of the WWE will be happy to negotiate that relationship and serve as the agent for the star throughout his or her career. They even have their own production company in which to create the features in which to showcase their stars. Problem solved, profits realized.

Maximization should include not only all our delivery systems, but also in how we view what business we’re in. We need to always look for additional profit centers and how to best incorporate them in our business models. This may mean acquisition, or it may mean the formation of strategic alliances, but we have to make sure we heed the enduring words of Theodore Levitt and not get myopic in our marketing vision!

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Disney Animation Legend Joe Grant gave Pete Docter, Director of Pixar’s UP, a pencil. The pencil’s visible wear (see for yourself) attests its use in the creation of Disney-caliber artwork of yesteryear. The pencil became one of Docter’s prized posessions partly because, as we can all probably attest, getting something from someone you respect instantly becomes a treasure. However, Docter says another reason the pencil has such great significance is that it reminds him that Disney’s roots, and its future, are in storytelling. Regardless of how big a role new technology plays in the development of new features, at their core, everything Disney/Pixar strives to offer its customers is firmly grounded in a compelling, well-done story.

That’s a big reason why Toy Story was such a smash hit when it was first released in 1996, and why the 10 Year Anniversary Edition DVD sold so well. Though it was a captivating, award-winning application of technology, it has endured because it was just a great story! Toy Story will undoubtedly take its place with so many Disney films that have an audience in each generation. The reason the product has endured is because the brand has endured, and the brand has endured because it’s a story worth hearing again and again. And trust me, if you have kids, you’re going to hear that story again, and again, and again…

I can’t wait to see UP just because I so appreciate the guiding principle behind Docter’s direction and everything Disney does. As he said as he reflected on why the pencil meant so much to him, “Even though people look at Pixar as cutting-edge, we have one foot planted in the tradition of great storytelling.” What a powerful word: Tradition!

The challenge for each of us is to consider what enduring value will our brand have? What story will we tell that will keep current customers wanting to be a part of it, to tell it to others, and to get others to pass it along, maybe even from one generation to the next? The brand is more than just the product, it’s the entire story!

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