Dominate Your Life

Commoditization is Actually a Good Thing

Johnny — Sat, 30 Aug 2008 21:16:52 +0000

I’ve been in the business of providing a service for several years now and one thing I’ve noticed is that there’s a general disdain amongst service professionals toward commoditization. Example: I used to be in the mortgage business (before the shit storm) and the idea of selling mortgages as a service, where the mortgage broker/loan officer acts more like a financial adviser than just a salesman is heavily promoted as a way to really succeed over the long-term in that business. It influenced me quite a bit, but the more I learn about business and the more time I spend running my own business, the more I’m starting to realize commoditization of services is actually a good thing for both the client and the service professional.

In practice, service professionals really deliver a product, the end result of whatever service they provide. A tax account is a service professional, but ultimately, he’s really delivering a product, tax savings (or simply tax preparation), without which, I have no need for him. The real mark that distinguishes service professionals is that the product(s) they deliver tend to be, to varying degrees, customized to the individual client, which is why we tend to think of “service” as a separate type of business, when in reality, a service is nothing more than a product that hasn’t found a large enough market to profitably commoditize it yet.

Now that last sentence may sound strange, but consider that what we define as products tend to be anything that can be mass produced and services as anything that may not be able to be mass produced. Consider my tax guy…he could (and probably does – I haven’t asked) separate his specialization into sub-specialties. For instance, tax prep for web designers, tax prep for independent internet marketers, tax prep for software company owners, etc… Now, 10 years ago, such tax prep was very customized to the client if for no other reason than he may only have one or two clients in the same technology specialization…there really aren’t enough clients to make it worthwhile for him to develop any kind of automated system. If you took a look at his business today, however, he may have 20 web designer clients, 20 software company owners, and 20 independant internet marketers…now that each specialization is larger, he can start to develop some automated systems to help him get to the finish line faster…because now, saving 10 minutes on each of 20 clients in any particular specialization is worth it. So my tax guy can start to move a little bit toward mass production of tax prep for each client specialization.

If my tax guy implements some basic automation (read: production) to save 10 minutes per client, he can afford to charge a little bit less per client with each new client he gains. To make it more clear, imagine Mr. Tax guy has the 20 clients in each of 3 major tech. specializations described above. He spends $2,000 on some system to automate some of the tasks he’s performing regularly…for example, he could pay a programmer to develop a software app for him that allows a client to log on to the web and fill out a premade form with the exact questions Mr. Tax guy needs for each specialization. Now imagine that system saves him 10 minutes per year, per client of collecting information personally for each client…and suppose he charges each client an hourly rate of $100. So he’s invested $2,000, but he saves 10 minutes on each of 60 clients, which amounts to 10 hours of work saved. At $100/hour, that’s $1,000 he’s saved in the first year…that system pays for itself in 2 years (assuming Mr. Tax guy doesn’t get any new clients), and after 2 years, all things being equal, Mr. Tax guy has an extra $1,000 per year.

Now, this is a very small-scale example…imagine a company with thousands of clients. The more that company can automate, the more money they save, and hence, the greater their profits…the only thing that prevents Mr. Tax guy from spending $100,000 right now on a system to automate the entire process is that he doesn’t have enough clients in any particular specialization to make that profitable.

So, back to the main point of this article…as Mr. Tax guy retains more and more clients in the same or similar specializations, the more automation he can implement, resulting in higher profits. If Mr. Tax guy does enough of this, he ends up with a company like Quicken, which automates the entire process. Suddenly, and for no other reason than Mr. Tax guy found more and more clients with the same or similar needs, Mr. Tax guy has transformed his business into mass producing a product.

So, what do you think…is the level of demand for the deliverable the only thing that separates a product from a service?

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Incredible Book on the Powerful Influence of Authority

Johnny — Fri, 11 Jul 2008 03:11:15 +0000

I’m reading the book, Influence: The Psychology of Persuasion, by Social Psychologist Robert Cialdini, PH.D., and was so amazed at this I thought I’d share it:

A group of researchers, composed of doctors and nurses with connections to three midwestern hospitals, became increasingly concerned with the extent of mechanical obedience to doctors’ orders on the part of nurses. It seemed to the researchers that even highly trained and skilled nurses were not using that training or skill sufficiently to check on a doctor’s judgment; instead, when confronted with a physician’s directives, they would simply defer.

[...] Finally, they wanted to see what would happen if they physically removed the authority figure from the situation and substituted an unfamiliar voice on the phone, offering only the frailest evidence of authority – the claimed title “doctor.”

To twenty-two separate nurses’ stations on various surgical, medical, pediatric, and psychiatric wards, one of the researchers made an identical phone call in which he identified himself as a hospital physician and directed the answering nurse to give twenty milligrams of a drug (Astrogen) to a specific ward patient. There were four excellent reasons for a nurse’s caution in response to this order:

The prescription was transmitted by phone, in direct violation of hospital policy.

The medication itself was unauthorized; Astrogen had not been cleared for use nor placed on the ward stock list.

The prescribed dosage was obviously and dangerously excessive. The medication container clearly stated that the “maximum daily dose” was only ten milligrams, half of what had been ordered.

The directive was given by a man the nurse had never met, seen, or even talked with before on the phone.

Yet in 95% of the instances, the nurses went straightaway to the ward medicine cabinet, where they secured the ordered dosage of Astrogen and started for the patient’s room to administer it. It was at this point that they were stopped by a secret observer, who revealed the nature of the experiment.

Quoted from Influence: The Psychology of Persuasion, Revised Edition, p. 224-225, by Robert B. Cialdini, PH.D.

This book is a must-read by anyone in the sales, marketing, or other business professions as it really explains the seemingly crazy things that motivate us as human beings. Dr. Cialdini also explains how each of these seemingly crazy motivators actually provide great value to our species, since they allow us to be able to process the enormous amount of information thrown at us on a daily basis without going into information overload.

The book is especially useful for anyone who wants to protect themselves against sleazy salesmen or con artists because after each case study or key point, Dr. Cialdini goes into great detail on how these mental shortcuts we use naturally can be taken advantage of by sleazy salesmen or marketers. Dr. Cialdini also details exactly how you can avoid being influenced by these tactics.

I’m glued to the book and haven’t put it down since I picked it up earlier today. Click here to pick up a copy for yourself.

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People Generally Have No Idea How to Interpret Statistics

Johnny — Sun, 16 Mar 2008 02:22:29 +0000

It’s laughable sometimes how poorly statistics are interpreted. I see it all the time in the media especially, but your average Joe isn’t exactly a stats genius either. Here’s a pretty good excerpt from an report published by Jessica Utts of the University of California, Davis about Probable Coincidences.

PROBABLE COINCIDENCES
Most people have experienced one or more events in their lives that seem to be improbable coincidences. Some such events are so surprising that they attract media attention, often with estimates of how improbable they are. For instance, Plous (1993) reported a story in which a Mr. and Mrs. Richard Baker left a shopping mall, found what they thought was their car in the parking lot, and drove away. A few minutes later they realized that they had the wrong car. They returned to the parking lot to find the police waiting for them. It turned out that the car they were driving belonged to another Mr. Baker, who had the same car, with an identical key! Plous reported that the police estimated the odds at a million to one. The problem with such stories and computations, is that are based on asking the wrong question. The computation most likely applies to that exact event happening. A more logical question is, what is the probability of that or a similar event happening sometime, somewhere, to someone. In most cases, that probability would be very large. For instance, I was once on a television talk show about luck, with a man who had won the million dollar New York State lottery twice, and the host of the show thought this demonstrated extraordinary luck. While it may have been wonderful for that individual, Diaconis and Mosteller (1989) report that there is about an even chance of the same person winning a state lottery in the United States in a seven year period. That was precisely the interval between the two wins for this person. Remember that there are over six billion people in the world, with many circumstances occurring to each one daily. Therefore, there are surely going to be some that seem incredible. In fact if something has only a one in a million probability of happening in a given day, it will happen, on average, to over 6000 people in the world, each day. When the media reports an incredible coincidence, psychic prediction, and so on, it should be viewed from this perspective.

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Make Money Online Sucks

Johnny — Wed, 12 Mar 2008 06:59:52 +0000

I’ve got to say I’ve become a little annoyed with all the damn make money online websites/blogs out there. There are so many of them. As an aside I considered creating one just because, in spite of what everyone says, that niche ain’t near its saturation point. There are so many people reading this tripe that you just have to write better than a 3rd grader and you should do fine.

Ok, exagerating a little there, but here’s what really annoys me…Some of these blogs are so huge and everyone’s soaking up this information like it’s so great, but do you think those bloggers are telling you what really works? Sure, you get the occasional post after the fact like Shoemoney did on his 10k PPC experiment post, which was pretty good, but most of these bloggers are not telling you anything cutting edge and unique. They’re telling you what they did, not what they’re doing. “Leave comments on other blogs, submit to article directories, blah blah blah blah.” Guess what, there’s a million ways to make money online, but you can be damn sure that if everyone’s talking about it you shouldn’t be doing it. It’s kind of like the Real Estate market. All these idiots were buying up properties left and right when, especially in California, they were so grossly, and obviously overpriced that a bust was inevitable. And you know why all those people kept buying real estate at absolutely ridiculous prices? Because everyone else was telling them to. And you know what my first rule of business is? If everyone’s talking about it, it’s already passed it’s prime.

Why do I talk about this like I know what I’m talking about? Because I do. I used to read all those make money online bloggers every day and never got very far. Once it dawned on me that these guys weren’t going to tell me their secrets, and the secrets are where the money’s at, I quit reading…well, everyday at least. I still read those blogs occasionally, but I used to read John Chow everyday, now I couldn’t give a shit less about doing the stuff I read there and making $1 a day, which is all most bloggers are ever going to make.

So, what do I do now that I’m not drooling over what Yaro Starak has to say? Several things…

I write programs to do things for me. I taught myself how to do this because if you can’t do this or afford to pay someone who can, you’re lost. Now I get twice as much done with half the effort, and I haven’t even tapped a fraction of what’s possible with automation.
I research other sites. I still visit Problogger occasionally and the others, but it’s mostly to weave my way through the web and find some hints at what someone else is doing that appears to be working for them. Because like I said, no one is going to tell you the best secrets…you have to figure them out for yourself or take them from someone who gets a little careless with covering his/her tracks.
I started to focus much more attention on building links. And building links one at a time by leaving comments on other blogs is an absolute waste of time. If it means you take 6 months to build one single link because you’re spending all your time learning to build links like a champ, then you’re better off doing that.
And above all, automation is my number one priority. Not writing content, not chatting it up with other website owners. If I have some programming I can do to make my life easier/build links faster, I do it before I write. As a result, my posting frequency has dropped, but in spite of that, traffic is doing quite well. I’ve made more progress on all my sites & business in the 3 months since I quit spending all my time reading that I did in the entire year before that.

So, quit wasting time reading everyone’s blog and start figuring out what nobody’s telling you.

Update: I got a little careless with my wording in an article on another site and that day Google dropped that site to PR 0. I haven’t heard back from Google on that, so I’m still not sure if that article was actually the problem. Anyway, if you’re with the “G”, please keep in mind I’m not spamming! None of what I say about automation above is spamming. It’s about automating the tracking of various sites and implementing some things that my visitors request that I wasn’t able to do before because I couldn’t program, and especially, providing real value with automation, like interactive tools, etc… So, don’t go getting overzealous on me again.

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Cutline Theme Mod Released!

Johnny — Sun, 09 Mar 2008 08:33:20 +0000

Over the past year or so I’ve really burned through a lot of Wordpress themes that I used for short periods of time and then abandoned. I finally dug up those old themes, dusted them off, and packaged them for download. So, my first one is a mod I did on Chris Pearson’s Cutline theme. The theme can be demoed and downloaded here.

And here’s a screenshot for those interested…

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It’s Been a While Since I’ve Written

Johnny — Fri, 07 Mar 2008 07:34:27 +0000

Well, my writing on this blog has been intermittent I know. To be honest, I’ve arrived at a bridge to cross and haven’t figured out what to do with the site yet. I really have no need to write about a lot of the things I’ve written about in the past…sorry to those who enjoyed those posts…I wrote all those during a transition in my life, going from working for someone to running my own business…it was tough and those posts help me get my thoughts straight.

That said, I’ve got so much going on, I hardly have any time for anything besides work. You may remember a while back I wrote a post about $30 blog designs…well, that was the beginning of the launch of my web design company, Mirage Design Works. I’ve been so swamped with new business I haven’t even had time to return all the emails…and I’m really not doing much marketing at all at this point…crazy stuff!

Anyway, back to the point of this post…I’ve been wanting to write about whatever I feel like writing about at any given time, but haven’t done so on this blog to maintain the integrity of it’s theme. Well, I don’t have any desire to write on a regular basis about that stuff anymore, and since I’ve been wanting to write about whatever I feel like, instead of shutting down this blog, that’s what I’m going to do.

I’ve also been incredibly busy working on another site of mine, Truthful Lending dot Com, which, about two months ago, Google must have given some kind of major authority boost because the search traffic to that site tripled in a matter of weeks. It had, incidentally, had its one-year birthday a short time before that, so I’m wondering if Google gives a boost to sites after they’ve been online for a year…anyone know anything about that? Anyway, that site is taking off, it’s ranked for some incredible terms and I’m just really impressed with it all around, especially since I’ve been chugging away promoting and writing for it for over a year now. It’s nice to finally see some reward for all that effort.

That’s all I’ve got for now.

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16 Signs Your Marketing Department Needs An Overhaul

Johnny — Wed, 13 Feb 2008 15:00:44 +0000

Not everyone knows how to get their message across. Here are some attempts we thought were especially, well, let’s just say they’re valiant efforts…

Yes, having lines and being able to fold are definite requisites of a good notebook
We’re still not sure, but we think we’ve got a good product here.
“Ok, we’ve got some really bad press with the whole priest molestation thing, so let’s ease up on our message a bit and try to be less controversial…”
“I think the walking around with a sign idea is a good one, but I disagree with the whole target market thing. Let’s just target everyone.”
“If you’re reading this, you probably went too fast.”
“Armrests for decoration only.”
It pays to be different…
“Falling may cause loss of feet…”
In case they ever get those windows installed…
“Ok, just so I’m clear, am I allowed on the tracks or not?”
Going the honest route…
“Perfect! You can’t even notice it…”
“No walking on water…”
“Shavers only. Fine…shavers and birds.”
“Yeehaw Randy, if it weren’t for them homos we wouldn’t have any business! Who woulda’ thought?”
Too late…

Thanks to seaturtle for taking pictures like these.

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Lookout Wrinkle Creams, Digg’s Got The Best

Johnny — Mon, 28 Jan 2008 22:10:10 +0000

I saw this ad on Digg today…I couldn’t make this up if I wanted to…

“There’s something different about you today sweetheart…”

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OMG, Popstar! Magazine is my BFF, LOL!

Johnny — Mon, 21 Jan 2008 11:00:58 +0000

Next time you’re at the supermarket, pick up a copy of Popstar! magazine and notice that every single caption in the entire magazine ends in an exclamation point (They also have some question marks!)! Don’t ask me how I know this. Now all those screaming girls you see at pop concerts makes sense…that’s just how they talk!

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Million Dollar Blunder

Johnny — Sun, 20 Jan 2008 17:50:57 +0000

I found this landing page linked through the million dollar homepage. The ad on the million dollar homepage looks like it would have cost around $5,000 for the advertiser…but the landing page is full of broken images. What a waste.

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Dominate Your Life

Commoditization is Actually a Good Thing

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Incredible Book on the Powerful Influence of Authority

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People Generally Have No Idea How to Interpret Statistics

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Make Money Online Sucks

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Cutline Theme Mod Released!

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It’s Been a While Since I’ve Written

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