Weird but Effective; Amazon Pricing Strategy; 9x Inc. 5000; LIVE Streaming Summit

Published by Verne Harnish at September 14, 2017

"…insights for scaleups"

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LIVE Streaming ScaleUp Summit — for a price 1/10th the keynote fee of just one of our world class biz thought leaders your entire team can tune into the Summit from the comfort of their home or office. More info below, but first…

Amazon's Pricing Experiments — the godfather of pricing, Hermann Simon, has a new HBR article highlighting Amazon's pricing strategy post the takeover of Whole Foods. Note's Simon:

In the first week alone, the way in which Amazon announced its price changes at the shelf showed the sophistication it brings to such challenges. For many of their key value items, shoppers saw large, co-branded posters which announced the price change. The posters prominently featured the product name, the former (higher) price, the new (lower) price, and the message "more to come" at the bottom. Including both prices, as opposed to an "X% off" approach, reinforced the fact that many of the changes crossed key "whole dollar" thresholds. Avocados went from $2.50 to $1.99. Almond milk dropped from $3.99 to $2.99. Vine-ripe tomatoes were reduced from $2.99 to $1.99. While price research is not universally clear on the subject, the presumed power of undercutting these psychological thresholds is high.

This helps change the perception — and the "more to come" is very clever (Simon explains in the article), but across Amazon they might be the lowest priced on the top items, but much more expensive on the rest – equally smart. Simon goes on to explain how Amazon will use pricing strategy to increase the healthy food segment of the market. The point – pricing is a strategic weapon used poorly by most companies. Read Simon's article then read his book Confessions of the Pricing Man. Then become a student of pricing!

Weird but Effective — the research is clear – vivid visualizations, great inspiration, profound creativity, exceptional insight as well as your mind's most deep-seated programs occur for a moment between falling asleep and waking up – the brief Theta brainwave state of the mind. To tap into this powerful state of the mind, both Thomas Edison and artist Dali had a simple technique. After focusing on a particular idea/challenge, they would relax and allow themselves to fall asleep holding something in their hand (Dali a dangling keychain; Edison some ball bearings). As they entered Theta state their hand would release the item, making a noise that would wake them so they could capture those great inspirations. This short video shares the full story. I'm trying it! Thank you to Sebastian Ross for sharing.

Power of Board Games — could it be that playing board games makes you a nicer person with better relationships? Note this Quartz article, "As film and media studies professor Mary Flanagan tells The Atlantic, board games prompt us to reflect on 'turn-taking and rules and fairness.'" It goes on to explain:

Another significant feature of board games is that they require several people to sit down in the same room together and concentrate on a shared experience in real time. That is becoming increasingly rare in a world in which we often see our friends and loved ones more on social media than in real life. A recent Atlantic story outlined the sharp rise in teen isolation as an entire generation sits in their rooms, glued to their smartphones, interacting via app. They report higher levels of depression and anxiety than earlier generations, too.

Our family isn't sure Monopoly has been a positive influence ☺, but point well made – and great to see that board game sales high risen considerably.

9x Inc. 5000 (Gazelles case study) — only 1% of firms that qualify for the Inc. 5000 list make it 9 times. SPro member and longstanding Rockefeller Habits fan, Rajeev Agarwal and his wife Arpita, co-founders of MAQ Software are one of the few. Notes this Inc. article, when asked the keys to their sustained growth:

First, our management team takes a long-term view of our progress-as in looking ahead 25 years. Although being No.1 on any list would be an honor, it is more gratifying for me to appear on the Inc. 5000 list repeatedly since it demonstrates the durability of our business model. Second, our management team is committed to developing an organization with a learning culture. We lead by example to stay technically current. Finally, we stay focused on the success of our customers. Eventually, customers recognize the contributions of key suppliers and come back to buy more.

BHAG, learning, and getting the job done for customers – a pretty simple, but difficult to sustain, formula. Congratulations to Rajeev and Arpata, whom you'll meet at the upcoming ScaleUp Summit Oct 17 – 18 in St. Louis – I think their 9th year of participating!

What I Did Not Learn in B-School — this is the title of Rajeev's second book – a prolific writer and CEO. Here's a mini-site for the book. It's especially applicable to firms doing business in India – it addresses the execution challenges of doing business in that country.

The Potential Principal — last week I highlighted Mark Sanborn's new book The Potential Principal. Steve Hall, founder of DriversSelect.com (largest single location auto dealer in US) noted, after appreciating how Mark reframed the idea of potential:

I began to journal about the following questions

How good of a father could I be to our boys versus how good a father I am?
How good of a husband could I be to Joy versus how good I am?
How good a leader in driversselect could I be versus how good am I doing leading our company?
How much better could I serve God versus how much I am serving Him?
How good could my health be versus how good is my health?
How balanced could my life be versus how balanced is my life?

Seems like the right questions – worth pondering this weekend.
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Verne Harnish

Verne Harnish is founder of the world-renowned Entrepreneurs’ Organization (EO) and chaired for fifteen years EO’s premiere CEO program, the “Birthing of Giants” and WEO’s “Advanced Business” executive program both held at MIT. Founder and CEO of Gazelles, a global executive education and coaching company with over 150 coaching partners on six continents, Verne has spent the past three decades helping companies scale-up. The “Growth Guy” syndicated columnist, he’s also the Venture columnist for FORTUNE magazine. He’s the author of Scaling Up (Rockefeller Habits 2.0); Mastering the Rockefeller Habits; and along with the editors of Fortune, authored The Greatest Business Decisions of All Times," for which Jim Collins wrote the foreword. Verne also chairs FORTUNE Magazine’s annual Leadership and Growth Summits and serves on several boards including chairman of The Riordan Clinic and the newly launched Geoversity. He is an investor in many scale-ups. A father of four, he enjoys piano, tennis, and magic as a card-carrying member of the International Brotherhood of Magicians.

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