Throwing Around $100 Bills - 2
In the immortal words of The Wall Street Journal’s Laura Landro, written last Friday about her long weekend at the George V Hotel in Paris:
Of course, you pay dearly: Even taking into account the strong euro, prices at the George V, like other luxury hotels, are stratospheric. Internet access, at $32 for 24 hours, feels like highway robbery. And when a club sandwich, small shrimp salad and a couple of Coke Lites come to $157, you know you aren’t in Kansas anymore.
Where the British pound equals $2, the euro is a paltry buck and a half. Dinner in Germany and Austria was still $100+ for two, but my wife, Peggy, and I did not feel the same squeeze.
Peggy is a representative from the U.S. Curling Association to the World Curling Federation, which meets twice a year—once for three days in December in the city where the European championships are held and again in March at the venue of the world championships. I tag along, sightsee, watch some curling and generally get my head out of Philadelphia.
What can a marketer or businessperson learn in Europe?
Plenty—especially in the area of cost cutting and business models.
The Continent and Energy Conservation
In business, if you can cut costs without hurting your products and services or creating distrust among customers and prospects, you owe it to yourself, your employees and your stockholders to go for it.
The price of oil is flirting with $100 a barrel. The Middle East—with its vast reserves—is roiled with politics, religious controversies and violence.
One of our traveling companions priced the cost of gasoline in the U.K. After translating liters to gallons and pounds to dollars, the cost of petrol over there is roughly $8.40 a gallon. It is about $7.10 per gallon in Germany.
The Europeans practice myriad energy conservation techniques, which save money. I find them fascinating:
* Bicycles, Vespas and Smart Cars. As you rush past rail stations on the train, one guaranteed sight is hundreds of parked bicycles whose owners ride to the train, commute somewhere and bike home in the afternoon. The cost of fuel is a few calories and no cash outlay. The next step up is a Vespa scooter: dangerous, but inexpensive to buy and cheap to run. But to me, the stunners are the little Smart Cars developed by Swatch (the watch folks) and Mercedes—so tiny, they can be parked nose-to-curb. I am an unabashed gawker at these little, two-seat charmers. The closest thing to them may have been the Topolino (“Mouse”) that Fiat manufactured from 1937-1955. Some Smart Cars are already in the U.S. with more on the way. Chris Woodyard of USA Today calls the Smart Car a “breadbox on wheels.” With a top speed of 90 mph and highway fuel consumption of 40 mpg, they sell for around $12,000 and are cuter than a ladybug. In a collision between a Smart Car and an SUV, I would prefer to be in the SUV. But any of these little guys—bikes, scooters or Smart Cars—should be terrific for zipping around town, leaving plenty of money left over to spend on other stuff.
* European hotels. When you walk into your room, you may find that it’s completely dark and the lights do not work. However, when you slip your plastic key card into a slot next to the door, all the lights come on. When you leave, you take your card key with you—removing it from the slot—and all the power in the room is turned off. Why should the lights remain on in an unoccupied hotel room?
* Hotel bathrooms. Instead of providing small bars of guest soap, many hotels have liquid soap dispensers on the wall by the sink and by the tub-shower. As a result, tens of millions of slightly used soap bars are not wasted.
* Light bulbs. European hotels (and many American hotels, for that matter) are not generous with the wattage of their reading lights. This saves money, but not the guest’s eyesight. Many seasoned travelers carry their own light bulbs or high-intensity reading lights.
* Hotel hallways are dim and dark. The moment a guest sets foot outside the room—or steps off the elevator—motion detectors automatically turn all the lights on. Again, why waste energy lighting an unused hallway?
* Escalators. At many airports, train stations, hotels and malls, the escalators are not moving and appear to be broken. However, when you step onto the first flat stair, the contraption immediately starts up. In America, escalators move 24/7, wasting vast amounts of energy for no reason.
* Alternative energy. From the window of a train speeding along on smooth, welded rails through the German and Austrian countryside, you see tidy houses with solar panels and huge bins of firewood by the outside walls. It could be argued that the smoke from wood fires is more polluting than oil or gas energy, but wood is a renewable resource. Oil and gas are not.
* Wind power. Several years ago, my wife and I pulled into Copenhagen on a cruise ship and were dazzled by the line of wind turbines, their blades gracefully and silently turning with the elegance of ballet dancers. Twenty percent of Denmark’s energy comes from wind power. Senator Ted Kennedy is fighting a wind farm in Nantucket Bay, because his view will be spoiled. I find wind turbines mesmerizing.
* Nuclear. France has 56 nuclear power plants that generate 76 percent of the country’s energy needs. It is clean, silent and for France, dependence on Middle East oil is virtually nil.
A Fascinating Business Model
At age 72, I am not about to start any new businesses. However, I keep seeing opportunities that make me almost wish I were 30 years younger.
For example, while curling meetings were taking place, I joined three of the wives for a shopping trip to the town famed for a passion play every 10 years, Oberammagau, roughly an hour from Füssen. This is a center for marketing hand-carved wooden nativity scenes created by sculptors and artisans from town and the surrounding communities and mountains.
A number of the little shops were chock-a-block full of carved stables and dozens of figures—the Holy Family, Magi, angels, shepherds, sheep, camels, myriad onlookers—all beautifully detailed and many hand painted.
These sets come in all sizes and sell for hundreds of euros. The owner of one shop offered to record the set you buy, the size of the pieces and the name of the sculptor. With your purchase, you receive a catalog of all the matching figurines. Thus you can start a collection with the modest purchase of the Holy Family—Mary, Joseph and the infant Jesus in a rough crib—and order additional figures that match your set over time.
Coming out of the book club business, I was intrigued by this business model and tried to imagine creating a continuity offer by direct mail. Example: Take Joseph free, pay for the Madonna and Child and receive two figures a month on a “til forbid” basis (continue to send figures unTIL you FORBID us to ship any more). Midway through the shipments, you will receive the stable as a free gift.
It would probably not work by direct mail—lists would be too hard to come by. However, it could certainly be tested cheap over the Internet where the cost of sales is dramatically reduced, since paper, printing, lettershop expenses and postage are not factors.
In scouring the Web for such an offer, I found nativity sets and individual sculptured figures. But I saw nothing that would enable a person to collect a set in a convenient, structured way à la the old Franklin Mint coins-and-ingots model with strong copy such as, “a magnificent heirloom to own now and pass down to future generations with pride and love.”
Given the hand carving and necessity for very limited editions, such a marketing scheme may not work. But then again, it might, enabling these artisans to give pleasure to collectors all over the world and, at the same time, make a decent profit.
In short, I believe that many of the young Web merchants today are specialists rather than generalists. They know cold search engine optimization, keywords, click-throughs and all the other flash and filigree of modern electronic technology.
But do they know how to adapt the tested and proven rules of direct marketing to the new medium of the Internet? Are they conceptual thinkers—able to oversee the creation of product, setting up fulfillment operations, designing tests, critiquing copy and design, slavishly following the principles of A-I-D-A* and USP**, knowing when to roll out, and tracking the arithmetic and results every step of the way?
* Attention – Interest – Desire – Action
** Unique Selling Proposition
We went to a splendid candlelight dinner and Mozart concert at Austria’s oldest restaurant (Stiftskeller St. Peter, reputedly in business since 803). Legend has it that Charlemagne and Columbus dined there. The program booklet was bound in a wine red cover and contained a biography of Mozart, history of the restaurant, recipes from Mozart’s time, the pieces being performed, words of the arias being sung and biographies of the performers.
As a direct marketer, I was delighted to see that the back cover contained two elegant, full-color postcards touting the dinner concert that happy customers could detach and send to friends back home. The postcards were on a foldout flap, which meant the back cover itself was not damaged and the souvenir program remained intact after the postcards were torn out. In current lingo, this is viral marketing, a standard technique on the Web. I’ve never seen it done quite like this.
The Flight Home
An uneventful nine hours and 20 minutes to Philadelphia. Of interest was the very tight security at the Munich airport. We had to show our boarding passes at six different places and our passports five times. A regular passenger on the route said he had never seen such high alert.