The Interest in Petrol
I was having breakfast yesterday with some guys and gals from the Paragon Club
(www.paragonclub.com.au) and as you do at these "business related" gatherings, discussion turned to the economy and the effect it is having on some of the members businesses and their clients... The question that was unresolved was "
What's going on in the economy?"Also, one of the members of the group has just purchased a Mercedes Benz
(drool, drool) and with the price at the pump currently the question was uttered "
Whats it cost to fill up?"Steve McKnight of
www.propertyinvesting.com made a great commentary on all this and instead of emailing it directly to those around the table, as requested, I thought I would post it here and share it will everyone.
I don't need to tell you that it's becoming more expensive to fill up the
car. Yesterday, when driving to the airport, the price per litre of petrol was
123.9 cents, four hours later, it had jumped to 139.9 cents.
Putting this in
a different context, based on a sixty litre tank which is used over a week's
driving, that petrol price increase equates to $9.60 more to fill up (per week),
or just shy of $500 extra per annum. Further assuming an average 30% tax rate,
that $500 equates to around $710 of pre-tax earnings.
So, piecing this
together, unless fuel prices go back down, in this case you've suffered a pay
cut of $710. Ouch.
And translating this to a real estate context, this is
about the same as a quarter of a percent increase in interest rates on a
$275,000 mortgage (from 6.25% to 6.5%).
The point to note then is that even
though interest rates are not going up at the moment, the loss of earnings as a
result of the higher cost of oil is having an equivalent effect for many
people.
Taken from Steve McKnights 'Insider' newsletter, April 21, 2006
We all know the fuss that is caused when interest rates rise, and the 'yelling' that happens in the media when the pump price rises - but this really made me think about the actual effect it is causing at the bottom of the chain.....
Guy Kawasaki has put together some really interesting stories on companies driving their competition crazy with creative marketing.
When Security Pacific Bank merged with Bank of America many Security pacific branches were closed. First Interstate Bank rented trucks and parked them in the lots of the banches that were closing. Then First Interstate employees in those trucks then helped people open new accounts as there were leaving the banks.
In 1986 British Airways ran a promotion to give away 5,200 seats for travel on June 10th. Virgin Atlantic Airways ran ads that said, “ It has always been Virgin's policy to encourage you to fly to London for as little as possible. So on June 10 we encourage you to fly British Airways.” The British Airways promotion generated a lot of news coverage, but most of the news coverage also included a mention Virgin's funny ad. It cost British Airways a lot more than Virgin to get this coverage.
A research company surveyed 750 white-collar worker around the United Sates. The research showed that 81 percent of the people believed that casual dress improved morale; 47 percent believed that it increased productivity; 46 percent said they considered casual dress as a attraction to work for a company that permitted it, and only 4 percent thought a casual-dress standard would have a negative impact. When Levi Strauss found out about the study, it let thousands 0f publications know about it. The company also even put in a toll-free hotline to help companies implement a casual dress standard. Guess who was sure to benefit from greater knowledge of this study? Levi Strauss, of course, because of its Dockers line of clothing.
A Goodyear store in Chattanooga, Tennessee faced a predicament: it wanted to put up two Goodyear signs. However, the local law stipulated a one-sign limit. Undaunted, the store manager spelled out Goodyear in marigolds in a flower bed. The city inspector considered this a violation, but the public supported the store, so the city government backed off.
An electrician with only one truck was constantly razzed by his competition because his company was so small. To fake them out, he finally painted three different truck numbers on the right, left, and rear of the truck. International Harvester couldn't get steel to its factory in Melrose Park, Illinois because of a truckdriver's union strike. The company couldn't use non-union labor because of snipers on the freeway. Finally, the company rented school buses and dressed drivers as nuns, loaded the buses with steel, and made the deliveries. No one would shoot at school buses driven by nuns, right? Check the original blog out at:
http://blog.guykawasaki.com/2006/04/six_more_crazy_.html
The Government Gets Entrepreneurial...
I know, I know.. This sounds like baloney, I was just as shocked as you are when I actually opened some mail from ASIC and saw this:
I recently received some mail from ASIC relating to a company I recently established and in amongst some legal paperwork was this UPSELL LETTER.
For those of you who haven't gone through the exercise of creating a company, once your new entity is created you receive a very bland certificate of registration - however some genius who is working with ASIC (oxy-moron I know) has put in place an up-sell process.
This up-sell process is encouraging company directors to purchase a commemorative record of registration which looks a lot nicer and impressive then the generic document. They have 12 different designs from 'Australian Birds' to a 'Technology' styled certificate (plus two new designs on their website). They are even offering a pre-framed certificate offer at a higher cost. That's a two-level upsell offer !!!
What are they charging for this service? Well $39.95 will get you "a special display of your company's details" or for the low price of $119.95 you get one certificate framed.
I applaud the government for becoming a true business and taking some time-tested stratergies from the real-world and applying it to their services. Lets hope this income generating approach catches on so they can lower our taxes ;)
Until next time - consider how you can offer a similar upsell to your own clients? Can you create a Commemorative Version ? Or 'Franklin Mint' your product to give your customer two choices at different price point?
P.S. In the cover letter they have even put a call to action with the names of the people (and their direct contact number) who you can speak with to order over the phone - Amazing !!!
It's Started !!
Hi All,
Well I am now officially a 'blogger'.
The purpose of this blog is to provide you with interesting thoughts, ideas and observations about the world of marketing and entrepreneurship.
I will be posting regularly and include examples of creative and interesting marketing endeavors, links to great sites and blogs along with thoughts and ideas of impactful marketing tools and techniques that you can implement.
Please visit this blog frequently and I encourage you to post your own comments in response to my posts.
Cheers,
Pete W.
