Tag Archives: business innovation

ScootBiz Bidding: Gamification That Works

Gamification used to be the trendy buzzword couple of years back. Although industry hot shots are not raving about it anymore, the main idea makes still perfect sense. Gamification is making boring tasks fun, rewarding and immersive (not necessarily even game-like i.e. frequent flier programs).

Small example of this came from Scoot airlines, with whom I was flying last weekend. Little bit before my flight I got a mail from Scoot, which gave me an opportunity to bid for business class seats. I could set my own price and if my bid would be successful, I would get business class seats:

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This is a brilliant idea for two quite obvious reasons:

1. The opportunity makes the thief

My main concern when selecting budget airline is price, price and price. I would never book so calle ScootBiz in normal circumstances as my mindset is minimizing the investment. However, given the opportunity to bid on those Scootbiz seats, it felt different case. The price for economy class was already sunken cost, so I evaluated the opportunity to “win” those seats in new light. Bidding is an attention grabbing, active and addictive way to get people to spend more. It is likely that bidding also makes you spend more than you had thought, because it feels “risk-free” investment. You set your own maximum, which you are willing to spend. What many people do not realize that every price you set is already in addition to what you were first willing to spend. They also show “the strength” of your bid, which naturally prompts you to bid higher.

2. Only upside for Scoot

As you offer the bidding opportunity for those who have already booked their tickets you can wait to sell those seats until last minute. In best case scenario they might get even more money than normally. At its worse, they still get something. No matter what price Scoot gets from the bidding process, it is still better than no price at all.

Simple ideas are always the strongest.

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Cut The Bullsh*t: What Cutting Your Hair in Subway Station Can Teach You on Innovation?

Besides my grocery shopping habits I have changed my haircutting habits as well. Before I used to spend quite a lot time and money to fancy barbers, but as the time is tighter in fast-paced Singapore, I have found my new favorite business venture QB House. They are fast barbershop located in MRT stations and offering just cut really fast and really cheap.
 
Today while taking my haircut, I started to think what all the other categories could learn from their approach:
 
1. Concentrate on essentials
Especially for the guys you seldom need washing the hair or coloring services. You just need the quick cut. Many times the route for drastic category reinvention is to start taking things away. Crossfit is great example of this in sports category (having higher margins though as well). Think about budget airlines. Do we really need airline food? For many of us, the answer is resounding no.
 
2. Make it faster in slow category
I used to spend altogether almost two hours to my visit in Barbershop. Reserving it was a pain in the ass and it took weeks of time. Now I just pop to QB House on my lunch break and does not even think about it. What if you could get your glasses in a hour? Or your car in one day?
 
3. Give bold promise
“10 minutes just cut” is the tagline for QB House.  I have actually timed the experience in QB House and many times it goes a little bit over it. I don´t really care about that. The bold promise gives indication that it is fast and something you can do within time restraints of your lunch hour or when you are waiting for subway. What bold promise you could give in your category? We give you credit card in an hour? We give you a loan in an hour?
 
4. Be cheap
Until last year the QB House promise was even more compelling from price-perspective: 10 minutes and 10 Singaporean dollars. Now the inflation has taken its toll, but price is still reasonable: 12 Singaporean dollars (7 €/9.5$). Price is totally connected with cutting all the unnecessary bits away. What is the core of your business and what are just the add-ons?
 
5. Be consistent
Instead of being loyal to specific barber or even specific location. QB House is located in MRT stations and strategic mall locations, which means that I can actually visit barber no matter where I have to go. The process is so fast that I can accidentally pop by. Before having the haircut defined my whole day routine. QB House is the McDonald´s of barbershops. You always know what to get. Again consistency and strict processes contribute to two things: effectiveness and familiarity. Effectiveness makes business sense for company and familiarity makes the consumer to come back. Although I never get the comb they offer me, it is still a nice gesture. And actually because the barbers cut so many people, the quality is actually really consistent as well. But to be honest I would not try to get new hairstyle from QB House. I don´t think they would want that either. Stick to the essentials and be consistent.
 
Actually I go more often to barbershop nowadays as well (every three weeks, might also be that I am rocking the undercut), so the new way of doing things has actually altered my behavior as well. The yearly customer value adds up though and I bring over 200 dollars for QB House yearly. You do not even think about it, because the single transaction is so low.
 
If your category has done things certain way for a long time, it is good indication that you could do it differently. How could you be faster, cheaper and more revolutionary on your category?

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How Shopping Bags Revolutionized Retail

Have you heard about Walter H. Deubner?
 
If you have not, you should be ashamed. By simple observation and great insight, he was able to create good business for himself and the same time changed the way we shop.
 
He invented shopping bag.
 
Small business grocer Deubner noticed in 1912 that his customers always bought as much they could carry. Not more and sometimes less. He designed the way for customers to buy more items on one go. He patented the idea and in just three years he was already selling over million shopping bags a year.
 
That invention revolutionized shopping, as we know it.
 
Quite often our consumers would actually buy more, but they do not realize the opportunity or have barriers for doing it. Too often we are too fixed to the traditional way of selling our product that we do not recognize the barriers that prevent current consumers to buy more, or new consumers to enter our category. Coming back to the post I wrote earlier this week about subscription model, there is huge potential in rethinking the way we sell:
 
Could you sell single item in bulk?
Or bulk item as a single?
Physical product online?
Online product in retail?
Supersize it?
Minimize it?
 
Walter H. Deubner essentially created post-purchase service. Consumer journey seldom starts or end in the transaction.

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