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A leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation

Friday, June 30, 2006

Why the World Cup is a Big Deal

strategic innovationAfter living overseas in Germany and England and now coming back to the United States, I have a completely different perspective on Football (or Soccer as we call it in the United States).

With the World Cup in full swing, I thought I would tackle the subject of Football and why it is the most popular sport in the world.

Reason #1: No commercial breaks
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Watching a televised American Football game in person, it is clearly evident how much advertising slows down the pace of play. At university I always hated going to a televised game, because just when the game was getting intense and the crowd was getting into it, they forced the other team to turn the ball over. Then nothing happens for two or three minutes while someone peddles wart remover or deodorant spray.

Watching a soccer match, even a professional match, play never stops for advertising. Advertising is ever present at professional matches (on player and referee jerseys, on the sides of the pitch, stadium naming rights, etc.) but it doesn't stop play. You get 90 minutes of uninterrupted action, with television commercials at halftime.

Reason #2: Accessibility

All you need is something to kick around. You don't even need a ball. Some professional players have grown up playing with a ball of newspaper, rags, socks, or whatever else they could bunch together into a ball shape.

Reason #3: Talent Showcase
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Unlike most sports, playing on the national team is an honor and a duty. There is no question whether a top flite player will play on the national team. Professional clubs don't prevent players from playing and players don't refuse. Why? Being selected for the national team raises the value of the player, and the revenue to the player and the club (think ticket sales, but also WORLDWIDE jersey sales). Playing well on the national team can have a huge impact in the marketability of a player.

Because the top players play on the national team regularly, you don't see "Dream Team" fiascos, like the United States basketball showings at the Olympics and World Championships. These national football teams are teams with real chemistry, genuine intensity. Something is missing on all-star teams thrown together at the last minute. American basketball players don't seem to understand that their game is now a global game and that playing on the national team and playing well could elevate them to worldwide celebrity status.

business strategy innovationAnyone not familiar with David Beckham, know this, Real Madrid paid Manchester United about $45,000,000 for the rights to his services. This is because he is worth more than that in jersey sales, ticket sales, and media attention for the club, and this is over and above the $10,000,000 per year that Real Madrid now pays him in salary. Interesting fact, a car dealer in ASIA recently paid Beckham $18 million last year to go on a 10-day tour promoting its cars. Asia? I thought Beckham played in Spain. Isn't that kind of far from Spain? How did an English kid playing in Spain, make more money in Asia in one year than playing football in Europe? Oh yeah, he plays on the national team.

Reason #4: Suspense

Some people may say football (aka soccer) is boring and that there is not enough scoring for Americans to be interested in it, but let me say this, it's kind of like baseball. If you are a fan of one of the two teams playing, with every passing minute that the score remains close, the suspense grows more intense because any goal becomes more important and less likely to be answered. In football, often it only takes one goal to win, so the excitement of every chance is intense. It is that knowledge that a single goal could win that makes some of the most skilled players in the world muff easy chances that a school boy could make, and creates even more excitement because there are no sure goals.

What do these four points add up to? The most popular sporting event in the world. One that empties the streets of entire countries for two hours at a time when their home side is playing. One that closes entire businesses that would never otherwise shut up early. One that has citizens of every country in the tournament believing at the start, that anything is possible. One that, hopefully, NBA players in particular will learn from. And, if we're lucky, will lead to NBA players caring more about making the national team than the all-star team.


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Friday, June 16, 2006

Credit Card Shenanigans

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It must be great to be in the credit card business in the United States. Demand is relatively inelastic and regulation is lax, so you can charge whatever you want for an interest rate, increase your fees once or twice a year, and make additional money off cash withdrawals and foreign exchange transactions.

I nearly fell out of my chair after paying my American Express bill through their automated phone system, to find that Citibank wanted to charge me $14.95 for the "privilege" of doing all the work for them of setting up a payment. Let me get this straight you Citibank greedy bastards, you are going to charge me more to use a process that you set up to save you money. Thank you very much, but I hope you have fun leaking profits by processing my check, the phone calls I'm going to make, the negative word of mouth I'm going to give you, and the transaction volume I'm going to send American Express' way. I think Citibank's MBA's chose not to take Brand Management in school.

This industry is as close to a license to print money as you can get, but yet they are still not fully maximizing the revenue opportunities. If any of you out there are executives with a credit card company and would like to know exactly how to do it, go to the contact page and give me a bell or post me a letter or an email and we work together to create some new profits through a business strategy innovation.

For the rest of you, I'll give you a hint by asking you a few questions:
  1. Do you open your credit card bill every month?
  2. If not, why not?
    • You're delinquent and can't face it
    • You're in jail
    • Your wife or husband hid it so you wouldn't see how much they spent
  3. Do you ever not get at least one special offer in the envelope?
Now you may be saying to yourself:

"But Braden, they're already making money by getting someone to pay them to put special offers in the envelope, you've missed the boat to innovate in this space."

Have I?

I'll wrap it up here are some more questions.
  1. What other piece of direct marketing can guarantee an "open" and even has a solution to guarantee an "internal viewing"?
    • Remember with a piece of direct mail you are trying to get:
      1. an external viewing
      2. an open
      3. an internal viewing
      4. a consideration
      5. possibly a discussion with others
      6. an action to contact
      7. a follow-through in the form of an order
    • Direct mail is lucky if it even gets half a glance at number one
  2. How much is that guaranteed open really worth?
  3. What kind of special offers do you tend to get?
  4. What kind of special offers would generate the highest response?
  5. Who is this moment in time valuable to?
    • This moment when someone is opening their credit card bill to find out how much they owe and a special offer falls out.
  6. How can the credit card companies maximize their income from the value of this moment?

uncover hidden profitsThese are the kind of situations and questions we can help you find answers for. In business we tend to define a strategy and then hand it over to operations to make its then transactional nature as efficient as possible. In most people's minds it is the achievement of execution and negotiation efficiency that generates profits.

To create "new profits", you have to circle back around and look at things differently and establish the capability in your organization to continually do this.

increase revenue and maximize profitsWorking with companies to find "new profits" is what we do. We will work with you to create the capacity and ongoing capability in your organization to innovate in ways beyond the creation of new products and new services. Most product and service innovations are sustaining innovations that keep you even with your competitors. To truly leapfrog your competitors and make it more possible to meet the ever increasing demands of your shareholders, get that big fat bonus, and create a secure retirement and a future for your family, you must find new profits.

Contact us to see how we can work together to find new profits in your business, and stay tuned for the next interesting topic on the Business Strategy Innovation Blog!


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Wednesday, June 14, 2006

Building an Experience

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As people become ever more immune to traditional advertising and marketing, branding will become more important.

Branding is all about building an emotional connection with customers. Making the decision to follow a strategy focused on building a brand is not without peril, however, as it means that you will have to choose to not do certain things, like pursue a low price strategy.

Choosing to build a brand means that you will have to invest more in your stores, your website, and possibly even your traditional marketing and advertising to precisely reinforce your brand values with a level of quality.
increasing profits and innovation
Branding only takes you part of the way towards building a lasting emotional connection with customers. The pinnacle of that emotional connection is reached by ensuring that your interactions with customers are characterized more by the overall product, service, and the shopping experience you provide, than by the transaction or request you process.

Having recently moved to Seattle from London, I've started to learn more about the local successful business phenomena. This is the land of Microsoft, Expedia, Yahoo, and Boeing. One more local and rapidly growing company, which most of you will have heard of, is a cooperative called REI.

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REI sells camping and outdoor equipment (kayaks, hiking boots and clothing, etc.). REI has created an experience for shoppers that is well above the ordinary, and draws them customers in. They have incorporated a rock climbing wall, a waterfall, a nature trail, a mountain bike test track, and a minature forest into a store experience that looks and feels like a mountain lodge. The sales racks feature wooden endcaps, there is a stone fireplace with rocks around it to sit on, wooden staircases, a wooden ceiling, and a rock path to test out those hiking boots you're contemplating. I could go on but you probably get the picture.

My current client is right across the street from this amazing place, and I tell you, when I walk through the mini-forest with the waterfall and hike up the stairs to get to the entrance, I feel like I've gone to the mountains. This is a place I want to go to, even when I'm not particularly looking for a specific item. And once in, the enticement to buy is strong. This is effective brand building. When I think of REI I feel relaxed and enthused about visiting.

What do you feel like when you go to your average sporting goods store?

Contact us to see how we can work together to find new profits in your business, and stay tuned for the next interesting topic on the New-Profits Innovation Blog!


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Saturday, June 10, 2006


Welcome to our blog!

Here we will share with you our thoughts and observations from the business world around us when it comes to innovation and creativity in creating new profits.

Feel free to share with us your thoughts on:
  • Innovation
  • Creativity in business
  • Business Strategy
  • Strategic Innovation
  • Business Innovation
  • Innovations in Talent Retention
  • Creating New Profits
  • Creating New Revenue
  • Cool things you've seen where you live


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