Monday, December 28, 2009

Understanding Motivation

What motivates people? Specifically, what motivates a person to donate, buy, or participate? According to Business Week, 40%+ of rebates are never submitted. Shoppers pass by dozens of products they CAN afford to buy one they can't. People gladly share videos of Susan Boyle on Facebook, while refusing to "re-tweet" a cute video of a friends child. A friend of mine offered me $5,000 if I could find him a job... and it demotivated me. So what is behind these strange behaviors? What does this mean for business?

Engineers may wonder, why care about motivation. Simple answer, if you can't motivate people to 'action'.. you'll never sell a thing!

So, how do we motivate?
One answer may lie in games. Games provide some of the purest forms of motivation I've ever seen. "Get to the next level", "Get better virtual gear", "See the next video", "Save the virtual world", or "Win". So, how can you make your customers feel like 'they won' when they have bought your product...without making it feel like a scam? Karmaback is trying to solve this.

Another answer may lie in Youtube. Why are the 'funny' and 'ridiculous' so much more popular than the average? I believe it is because of 'shock value'. If something has 'shock value' then it is noteworthy... noteworthy to your friends = notoriety with your friends. I.e. if you are the one who found the noteworthy video, and you share it with your friends, you get 'cred.'.. or levels in friend-world. How can you make your product "noteworthy" and help your customers get 'cred. in friend-world? Karmaback is trying to solve this.

Finally, my last idea comes from buying behaviour itself. When someone recommends something that I need, I'm 90% more likely to try that brand/product. E.g. when NEED matches a FRIEND/family recommendation... I get REALLY motivated. Karmaback tries to encourage this every day!

What ideas or thoughts do you have on motivation? Understanding this psychology is the key to marketing!

photo by: ERCheck

Tuesday, December 22, 2009

What is Business?... in engineering terms.

Business is simple. Business is a process or function (for programmers) or a flow (for others). At its core it is the process where we invest resources (inputs: money, time, and effort). We use those inputs to produce intermediate stuff (inventory, product, or results). We then exchange intermediate stuff for (output: money). An incredible book called "The Goal" by Eliyahu M. Goldratt is a must-read for engineer-types because it introduces the concept of Flow or Critical Path analysis. This type of analysis is essential for business, because there IS always a weakest link, and it is usually NOT engineering.

Where is the weakest link? Usually it is in the exchange step. Lets take a deeper look at all 3 steps, engineering-like.

1.) Invest Resources (money, time, effort)
This part involves raising money, finding employees, motivating them, deciding what to build or do, and applying time and effort in its design.

2.) Produce Intermediate Stuff (inventory, product, or results)
This step of business involves actually making product (production) or inventory. It might be just buying stuff (inventory) low to later be sold high. It might be producing results for your client (if you are a service business).

3.) Exchange Intermediate Stuff (for money)
This step involves finding customers, selling, delivery, and collecting money for your hard work. Hopefully this step makes you enough money to cover the costs of #1 and #2!

So, where is the weakest link? Usually #3. Lets face it... building stuff isn't that hard. Designing stuff is hard, but not impossible (just takes time & effort). The real trick is finding customers and selling!

Just remember this axiom: buy low, sell high.

In other words, you better be doing #1 and #2 right so that people will WANT to buy, and that you will make enough profit to cover #1 and #2!

Good luck.

Thursday, December 17, 2009

The GUTS for sales?

Do you have the guts to do sales? Most engineer-types would say "yes", but feel "HELL NO". They'd probably claim its not adding value, boring, or beneath their skills. They are dead wrong. An engineer with the guts to go into sales has the sky as his limit. However, here are the fears you have to somehow, overcome.

  1. Rejection: this is a major one for engineers, and why so many of them propose so few truly new ideas. In sales, rejection is continuous until you get the check.
  2. Slime: many people think sales is a slimy business... rife with kickbacks and bribes... they are "thank goodness" dead wrong. People who rely on this went out of style with "The Godfather" (great movie, but far from reality today).
  3. Cold Calling: calling people is not fun, especially for engineer types or managers who constantly get cold called and hate it. Honestly, I'm stuck here.... I HATE cold calling, and flatly refuse to do it... I'm always wondering if it is hurting me: but in the world of Email, why can't we arrange a time to talk in advance????
  4. Pitching: Many engineer-types think pitching a product and "selling" means lying or being deceitful... if so, you should STOP watching Godfather, and instead pick up a copy of the book: "SPIN Selling".. which actually is not about "spinning at all" but asking questions to help determine IF your product has value to the client... if it doesn't, MOVE ON!
  5. Closing: funny, many engineer-types (myself included) probably think this means "getting to yes". I'm starting to learn though: closing is getting to "yes or no", then moving on when appropriate. In high-tech, getting a "no" is as hard as getting a "yes"... in both cases, the hard part is asking for it!

Here are a few that you'll worry about once you get here:
  1. Feeling worthless: since you're not 'making anything', or 'desiging anything' ... and it feels like you're "closing" very little (unless you count the 'nos'... which you should)... you'll feel like a lot of work for very little result. Trick is to remember, every deal has a "life-time value", not just the current sale.
  2. Lack of forward progress: similarly, since you're probably not counting 'nos' as successes (you should), you'll feel like your never getting anywhere. By the way, most clients will not say "yes" or "no"... which is even more frustrating!

Here's the solution.. READ A BOOK OR 2 on SALES!

Its funny, so few sales-people are reading sales-books... and so many are writing them!

Pick up a book!!!!

Here are a few I really enjoyed:
SPIN Selling
Sales Bible
Its Not Luck

Monday, December 14, 2009

Seth Godin: Brilliant Blogger... Good Person?

Seth Godin. I find it fascinating that a celebrated author, who writes masterpieces of business books such as Meatball Sundae, would run such an awesome Blog. It is even more incredible that he would then write (and compile) a book and publish it FOR FREE... "What Matters Now" view it here or download it free here. Even more incredibly, his intentions are NOT completely self-serving, as so many authors are... the very first page is GENEROSITY: "When the economy tanks, it's natural to think of yourself first... Instead, we're rewarded for being generous." I have found this to be SO completely true... for me, it really is the path to my current successes, and is in fact the backbone of what my new company is all about: Karmaback!

In the digital world, as Seth puts it, there is no reason NOT to give. Giving means clicking a sponsored link, blogging a product or cause you love, or twittering or facebooking the links you care about. Karmaback helps give incentive to the peopel who spread your love. Getting some Karma back, for your troubles and your time, is the least we can do!

So go, be Generous. Read the free book. Register at and get some of that Karma back! Thanks Seth!

Thursday, December 10, 2009

Lead with your weakness: Your Glass Jaw!

Seth's Blog had a recent post about "Leading with your Glass Jaw". His idea was that only the bravest and most secure companies will interact publicly with customers... and the weakest ones will shape up quickly if they start to do it. I think he's probably right: every company has a weakness (or 2)...a glass jaw if you will. However, I think he missed the boat with his post & headline. I believe, in the age of skepticism and skimp, of reviews and 'word-of-mouth' power, we should all be leading with our glass truth in our products strengths AND weaknesses.

Too many companies "lie by omission" about their products real value. They hope that people won't notice the blatant flaws, and that people won't mind the "idiosyncrasies".

In reality, companies should be up-front with their customers and in their marketing materials... ADMIT to your weaknesses. Expose the glass jaw. Why? If customers start to hit it... THEY look like the bad guys... after all you were very clear and up-front about your problems/issues.

In fact, done right, your other customers will stand up for you (if they like your "main" value proposition).

Want the best example in the world? Apple.

They admit that their CPUs and GPUs aren't as modern as PC. They admit that their software is tied to their hardware (closed platform). They admit to "blocking google voice"... and more!

And OH how the people defend them....

Be Apple, tell the truth... up front!

photo attributes:

Monday, December 7, 2009

Do Incentives Work on Social Networks??? MIT Students Prove: YES!

There is fascinating new evidence that incentives work for social networking VIRAL growth... even better than DARPA expected.

This article outlines the details of the MIT Students "incentive program" for social networking to help them find 5 red weather balloons spread across the nation. Their program rewarded $2000 for "first to find the balloon" but also "$1000 for a friend who referred them" and "$500 to the friend of the friend who referred that friend" and so on!!! BRILLIANT!

And this is part of what Karmaback does... we reward people for sharing good deals, specials, and cool products with their friends! Its the whole point of Karmaback! If you haven't checked out Karmaback yet, now is the time... you could be missing out BIG!

Read more about the MIT team here:

Thursday, December 3, 2009

Free Stuff vs. Prizes.

This post is more of a question than a deep thought. What % of people, do you think, are motivated by free stuff (like swag)? What % of people, do you think, are motivated by chances to win "bigger" prizes? Which is better, swag or prizes?

This and many other questions, I hope to answer with my new company: Karmaback.

One of the most exciting things that we do at Karmaback is measure EVERYTHING. The statistics of motivation have intrigued me for years... ever since we handed out massive K heatsinks (the Killer Bling) at Blizzcon in 2007. I recently wrote a magazine article about this experience... basically, giving away the big K heatsinks on chains as necklaces WORKED extremely well.

So, what do you think will work? Swag or 'bigger prizes'... and what % of people will be hooked?

Stay tuned to Karmaback and find out.

By the way, some great prizes can be had right now on Karmaback:

Good luck!

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