PART THREE Stage Two: Childhood Flashcards
1
Q
What is the main problem during Stage Two of business growth?
A
You are only breaking even or may even be losing money.
2
Q
What is the main challenge in Stage Two?
A
Creating additional, profitable products quickly.
3
Q
What opportunity arises in Stage Two?
A
Becoming a business of innovation, increasing cash flow, and becoming profitable.
4
Q
What additional skill is needed in Stage Two?
A
Coming up with a constant stream of new and potentially tipping-point ideas.
5
Q
What does OSS stand for?
A
Optimal Selling Strategy.
6
Q
What does having an OSS mean?
A
You understand how to bring in new customers cost-effectively.
7
Q
True or False: Sales will continue to grow indefinitely after reaching $1 million in revenue.
A
False.
8
Q
What should an entrepreneur recognize when business dynamics shift?
A
Change is needed.
9
Q
What is the consequence of not adapting to changes in business?
A
Sales will slow, refunds will soar, or best employees may leave.
10
Q
According to research firm BizStats, what percentage of businesses in the U.S. did not exceed the million-dollar revenue threshold in 2006?
A
95 percent.
11
Q
What is a self-employment company?
A
A business that provides the owners with guaranteed jobs and compensation similar to what they would earn as employees.
12
Q
What is the key to transforming a business into an equity-building machine?
A
Getting past being a one-product Stage One business.
13
Q
What is the primary factor in Stage Two growth?
A
The development and marketing of new products.
14
Q
How can a business double its revenues repeatedly?
A
By developing and marketing new products.
15
Q
What was the strategy used by the editorial director to grow the publishing business?
A
Launch a new line of newsletters aimed at consumers.
16
Q
What does the phrase ‘let the market decide’ imply?
A
Allowing market feedback to determine the success of a product.
17
Q
Fill in the blank: The one big opportunity for growth after hitting $1 million is to start selling more _______.
A
new products.
18
Q
What happens when sales slow down after reaching a certain point?
A
Most potential customers have either bought the product or decided against it.
19
Q
What is the common choice many entrepreneurs make when facing stagnant growth?
A
They cut back on operating expenses and maintain a modest business.
20
Q
What should entrepreneurs do to lead their businesses through growth stages?
A
Welcome changes emotionally and encourage employees to embrace them.
21
Q
What is the significance of recognizing when the dynamics of your business have shifted?
A
It indicates that necessary changes are required for continued growth.
22
Q
What does the author believe is more valuable than security in employment?
A
Independence.
23
Q
What was the initial focus of the publishing business before the shift in strategy?
A
Business-to-business newsletters.
24
Q
What does an entrepreneurial leader need to do every time the business changes?
A
Change themselves.
25
What was the first product introduced to enter the investment newsletter market?
A digest of the best ideas from various newsletters
## Footnote
The digest was sold at less than half the price of a single newsletter.
26
What phrase did the author find valuable regarding market decisions?
Let the market decide
## Footnote
This phrase influenced the author's perspective on business decisions.
27
How did the publishers feel about the digest being sold?
They did not like it and felt it capitalized on their assets
## Footnote
They were unable to take action due to fair use copyright rules.
28
What was the initial subscription base for the digest within a year?
30,000 subscribers
## Footnote
This led to over a million dollars in sales.
29
What did the team initially blame for the drop in sales after hitting the million-dollar mark?
The post office
## Footnote
They thought third-class mail might be the issue.
30
What conclusion did the team reach about digests compared to magazines?
Digests might be more like movies or books that come and go
## Footnote
Success can be steep and temporary if the product is trendy.
31
What type of second product was invented to combat crashing sales?
Another financial newsletter
## Footnote
It focused on the same investment sector as the digest.
32
How many newsletters were being published after two years?
Four newsletters
## Footnote
This led to a combined circulation of over 100,000 subscribers.
33
What was the revenue growth from the first million to the second year?
$1 million to $4 million
## Footnote
This growth was achieved through launching new products.
34
What was the first product in the new business after transitioning from newsletters?
A collection of cheap perfumes
## Footnote
These were made to look like designer brands.
35
What did the company sell after reaching the million-dollar sales level?
Inexpensive knock-off consumer goods
## Footnote
This included items like watches, sunglasses, and jewelry.
36
What was the company's sales figure before it was sold off?
$135 million
## Footnote
The business had grown significantly before the breakup.
37
What was the revenue growth from $8 million to $80 million attributed to?
Two marketing strategies
## Footnote
These were capturing a larger market share and increasing yearly revenue per customer.
38
What is the difference between front-end and back-end marketing?
Front-end sales acquire new customers; back-end sales profit from existing customers
## Footnote
Understanding this distinction is crucial for growth.
39
What should a business prioritize when starting out?
Collecting as many qualified customers as possible
## Footnote
This can include breaking even on front-end marketing.
40
What was a common mistake made by the company before the author's involvement?
They did little back-end product development
## Footnote
This left customers receptive to new back-end offers.
41
What entrepreneurial skill is necessary for growth beyond $10 million?
Developing and selling new products
## Footnote
This requires changing the company's orientation.
42
What did Malcolm Gladwell analyze in 'The Tipping Point'?
Tipping-point innovations and their impact on trends
## Footnote
He concluded that many trends are variations on existing ideas.
43
What is the author's perspective on launching multiple products?
It's better to launch many products and identify strong ones
## Footnote
This is based on the belief that only a few will succeed.
44
What does Gladwell argue about trendsetting products?
They are variations on a growing theme, not revolutionary.
45
What is a tipping point?
A metaphor describing the moment when a small change causes a significant effect.
46
How can group size affect receptivity to new ideas?
Manipulating the size of a group can dramatically improve its receptivity.
47
What do consumers typically seek in new products?
Clever adaptations of products they already know and love.
48
What is the ideal ratio of old to new in product development?
Eighty percent old and twenty percent new.
49
What should entrepreneurs focus on instead of creating brand-new ideas?
Noticing trends and developing products that anticipate those trends.
50
What is the problem with creating me-too products?
You are following the market instead of anticipating it.
51
What is the principle of 'one step removed'?
Focus on new products that are only one step away from what you know.
52
What is an example of a business that is one step removed?
Opening a restaurant selling a different type of food, like fish instead of steak.
53
What is the risk associated with ventures that are two or more steps removed?
Chances of success decrease geometrically.
54
What is the significance of Malcolm Gladwell's tipping-point concept?
It explains why some ideas succeed while others fail.
55
What are tipping-point innovations compared to ordinary products?
Tipping-point innovations are stronger and attract new customers at a higher rate.
56
What role do ordinary products play in a business?
They can create significant profits through existing customer relationships.
57
What is the benefit of back-end marketing?
It is easier and more profitable due to established customer trust.
58
What are the three fundamental marketing facts discussed?
* Create tipping-point products for new markets
* Find hot products and make them new
* Ordinary products can be profitable on the back end
59
What is the challenge of creating tipping-point products?
It requires hard work, smart people, and effective engagement.
60
What should the creative standard be in a company?
High, aiming for amazing results in product brainstorming.
61
Is being the first product to market always beneficial?
No, best sellers often come later in the second wave.
62
What is the consequence of aiming to be number one?
It can be wasteful and foolish.
63
Is the first product to market always the winner?
No, best sellers usually come later in the second wave.
64
What is the main advantage of being a second-wave product?
Second-wave winners often benefit from better timing and marketing.
65
What should be the objective of a smart businessperson regarding market position?
Long-term growth built on multiple front-runners, not necessarily number one.
66
What is essential for companies to grow quickly?
Catching trends when they are rising.
67
What is the role of timing in product innovation?
Timing determines whether an innovation becomes a trend or a marketing footnote.
68
True or False: Most first-to-market innovations create a significant cultural impact.
False.
69
What is a tipping-point product?
A product that replaces the one that launched a business.
70
What is one effective way to generate new product ideas?
Work as a member of a creative team.
71
What is the recommended minimum number of people for effective brainstorming?
Three.
72
What is the maximum number of participants for efficient brainstorming sessions?
Eight.
73
What does Parkinson's Law state about work completion?
Work expands to fill the time available for its completion.
74
What should brainstorming sessions have regarding the length of time?
A limit of one to three hours.
75
Why is it important to establish specific goals for brainstorming?
To generate a clear number of ideas and focus on specific objectives.
76
What is the importance of high standards in idea generation?
To develop ideas that have a good chance of working.
77
What is a code of equality in creative sessions?
Everyone on the team should feel they have an equal right to contribute.
78
What is the purpose of establishing strict rules in brainstorming?
To encourage a free flow of ideas while maintaining structure.
79
What should be avoided during brainstorming sessions?
Specific criticism of ideas.
80
What is the product cube used for in product development?
To visualize and generate multiple new product ideas.
81
What are the three dimensions of the product cube?
* Price
* Product type
* Unique selling proposition (USP)
82
How many possible products can be generated with three dimensions, each having three variations?
27 possible products.
83
What is the primary purpose of a business from an organic perspective?
To grow and change positively.
84
What must be done to spur growth in a business?
Encourage innovation from all employees.
85
What is the difference between front-end and back-end marketing?
Front-end marketing focuses on acquiring customers, while back-end marketing focuses on retaining and selling to existing customers.
86
What is eustress?
Stress that is healthful and stimulates growth.
87
What is distress?
Harmful stimuli that weaken confidence and ability.
88
What does distress refer to?
Harmful stimuli that make you weaker, less confident, and less able.
## Footnote
Examples include destructive criticism, abusive bosses, and physical harm.
89
What is eustress?
Stress that is healthful and stimulates growth.
## Footnote
Examples include role models, physical training, and taking risks.
90
What should employees understand about change?
Change will be a constant companion with new problems and challenges regularly.
## Footnote
They must learn to tolerate stress and embrace change.
91
How should leaders demonstrate embracing change?
By remaining calm under pressure, criticizing mistakes, and praising mistake makers.
## Footnote
Leaders should encourage employees to share learnings and be open about challenges.
92
What is essential for a culture of innovation?
Involving all employees in the commitment to innovation.
## Footnote
Praise both innovators and implementers equally.
93
What should leaders do to encourage new ideas?
Become instigators of new ideas, including smaller improvements.
## Footnote
All employees should view themselves as innovators.
94
What is a common issue with new product ideas after meetings?
The original brilliance of the idea often gets lost during implementation.
## Footnote
Delays can lead to a diluted version of the initial concept.
95
What are the two additional rules for product development meetings?
1. Tape-record the brainstorming session.
2. Write a short advertising piece for tipping-point ideas within 24 hours.
96
What is the formula for second-stage growth?
80% of G = IV²
## Footnote
G equals second-stage growth, I equals innovation, and V equals velocity.
97
What should a leader focus on during second-stage development?
Generating and executing new-product ideas.
## Footnote
Delegate operational tasks to others.
98
What three feelings should a product innovator have?
* Love good ideas
* Hate sluggishness
* Enjoy the process
99
What does 'Money loves speed' imply?
Implementing good ideas quickly can lead to financial success.
## Footnote
Delays can cause missed opportunities and a loss of enthusiasm.
100
What is the benefit of faster testing in product development?
It leads to more products and consequently more profits.
101
What strategy did the CEO of a publishing company use for growth?
Recognizing and emulating successful publications from a sister company.
## Footnote
This approach made coming up with breakthrough ideas easier.
102
What led the CEO's company to significant growth over the past five years?
The newsletter division's ability to recognize good ideas and adapt successful publications from a sister company.
103
What was the average time taken to test and launch a new product before the new policy?
Over two years.
104
What was the CEO's simple idea to enhance productivity?
Decrease the time to bring a new product to market by half.
105
What was the result of implementing the new product launch policy?
Increased number of products tested and improved overall company morale.
106
What new approach replaced the old product launching program?
A streamlined approach that takes only a year from start to finish.
107
What basic questions does the short business plan for a new newsletter answer?
* How the publication is unique
* How it fits into the existing product line
* To whom it will be marketed
108
What feedback mechanism is employed during the 90-day trial period of the newsletter?
Feedback is collected through questions and a full-day focus group.
109
What was the biggest challenge in growing the division, according to the CEO?
Overcoming the idea that going fast is risky.
110
By how much did the average cost of testing decrease after the new policy was implemented?
Approximately a hundred thousand dollars.
111
What key principle does the CEO's client emphasize to encourage innovation?
Accelerated failure.
112
What does the principle of accelerated failure entail?
Accepting that many good ideas will be rejected and learning from failures to increase future successes.
113
What is the second principle preached by the CEO's client?
Ready, Fire, Aim.
114
What does 'Ready, Fire, Aim' mean?
Test new ideas as soon as they are ready without trying to perfect them first.
115
What was the consequence for the division that chose a wait-and-see approach?
It experienced a significant downtrend in sales and lost money.
116
What should the focus be in the methodology of Ready, Fire, Aim?
Getting the idea ready for testing as quickly as possible.
117
What economic efficiency does the Ready, Fire, Aim approach provide?
It saves money by avoiding the extensive costs of perfecting a product before testing.
118
Fill in the blank: The Ready, Fire, Aim methodology is a way of testing more innovations, good or bad, in order to _______.
[increase the number of good ones that get implemented]
119
What example was given to illustrate the Ready, Fire, Aim approach in product testing?
Testing a colorless version of a cola by first gauging market reaction to the colorless idea.
120
What operational innovation example is provided for applying Ready, Fire, Aim?
Sending new customers gifts to improve customer service.
121
What is the concept of Ready, Fire, Aim?
A methodology to accelerate innovation and reduce costs by testing ideas quickly instead of extensive planning.
122
How can sending gifts to new customers impact their buying habits?
It can create a moral obligation for customers to reciprocate, potentially leading to increased future purchases.
123
What is a more efficient alternative to conducting a feasibility study for testing a business idea?
Select a sample group, implement the idea, and track results over a set period.
124
What are the benefits of creating a Ready, Fire, Aim culture in a business?
Shortens implementation time, reduces failure costs, increases success likelihood, and minimizes the negative impact of time on ideas.
125
What is the first guideline to speed up the implementation of good ideas?
Explain key concepts to your team and involve them emotionally in the vision.
126
What should management do to support operational innovation?
Maintain efficiency in all areas and provide necessary support for changes.
127
What is the importance of leading by example in a Ready, Fire, Aim culture?
Employees will follow actions rather than words; it’s crucial to avoid criticizing mistakes.
128
What does establishing parameters involve in the context of business innovation?
Breaking down the idea-to-production cycle into parts and setting specific timelines for each.
129
Why is it important to get agreement on timelines from key executives?
It ensures support and commitment to the timelines set for innovation.
130
What does the guideline to 'accelerate gradually' imply?
Progress should be realistic, moving from lower to higher production targets over a few years.
131
What is the significance of providing support as the business grows?
To address mounting problems effectively and ensure the promise of support to management is honored.
132
What does the methodology 'Ready, Fire, Aim' mean in practice?
Preparing ideas adequately before implementation and testing them in the market.
133
What does the Ready, Fire, Aim concept emphasize?
Velocity in moving from idea to action at the fastest possible speed.
134
True or False: Ready, Fire, Aim means acting without preparation.
False.
135
What is the primary purpose of the Ready, Fire, Aim strategy?
To increase a company’s production capacity.
136
List the seven essential questions to consider during the Ready phase.
* Do I have a good idea?
* Does it feel like it will work?
* Are my sales targets realistic?
* Can I afford to test the idea?
* Do I know the basic tasks that need to be done?
* Do I have the people who can do them?
* Do I have a Plan B?
137
What is a crucial aspect of determining if you have a good idea?
Defining what 'good' means to you.
138
According to the author, what often drives entrepreneurs to launch products?
Emotion.
139
What does Robert Ringer say about an idea's value?
An idea has no intrinsic value without action.
140
What should you do to quantify whether a product is good?
Discuss sales targets with your core marketing team.
141
What is the distinction between front-end and back-end products?
Front-end products have high sales targets to acquire new customers; back-end products have lower sales targets and are sold to existing customers.
142
Fill in the blank: Front-end products must be _______ good to achieve high sales targets.
tipping-point.
143
What is the role of intuition in evaluating a business idea?
Intuition is more reliable than formal analysis, based on years of experience.
144
True or False: The mentor's intuition was disregarded in the vitamin company's project.
True.
145
What did the experienced mentor suggest about the vitamin idea?
He had a bad feeling about it based on past experiences.
146
What is one way to develop a great gut instinct for business?
Pay attention to every business deal and assess the outcomes objectively.
147
What should you do if your sales targets are not realistic?
Drop the idea and move on to the next one.
148
What is a quick method to verify sales targets?
Double anticipated costs and halve expected returns.
149
What is one key factor to consider when testing a business idea?
Whether you can afford to test the idea.
150
What should you do if the net result of doubling your anticipated costs and halving your expected returns still looks profitable?
Go ahead with it.
151
What is the purpose of testing business ideas in controlled environments?
To evaluate the feasibility of ideas before implementation.
152
True or False: Direct marketers often test their ideas with sample groups before a full rollout.
True.
153
What is the advantage of target marketing compared to general advertising?
Target marketing usually gets a much higher response rate.
154
What should you create before putting your ideas into action?
A short list of primary tasks that need to be completed.
155
What is the role of a primary champion in a business idea?
To believe in the idea, have the authority to execute it, and possess the experience to make wise decisions.
156
Fill in the blank: Every great idea needs great _______ to make it succeed.
people.
157
What should you have in place in case everything goes wrong with a product launch?
A Plan B.
158
What does a Plan B involve?
Setting stop-loss points to determine whether to continue investing in a project.
159
What can be a consequence of not planning for failure?
Being blindsided by unexpected failures.
160
What is a critical component of a Ready, Fire, Aim business proposal?
Identifying critical tasks.
161
What should the length of a Ready, Fire, Aim business proposal be?
More than one page but no longer than four.
162
What is a key strategy for successful start-ups according to the text?
Being flexible enough to change plans quickly as you learn about the market.
163
What are the two reasons why most good ideas never get implemented?
* A desire for perfection
* Little chores
164
What is the main lesson from Microsoft’s approach to product launches?
To get products out quickly, even if they are not perfect.
165
What does the Ready, Fire, Aim formula emphasize?
* Begin when ready
* Don’t waste time perfecting the product
* Make adjustments only after the idea has proven itself
166
Fill in the blank: The key to being successful with start-ups is having a good general idea of what you want to do but being _______.
flexible.
167
What should you do if you encounter unexpected personal or business issues before launching?
Proceed with the launch regardless of minor distractions.
168
What is the Fire, Aim formula?
A strategy with three rules: Begin when ready, avoid perfecting the product before action, and make adjustments only after proving the idea works.
## Footnote
The formula emphasizes the importance of taking action over planning.
169
What should you do before launching a product according to the Fire, Aim formula?
Answer seven questions, the first being: Do I have a good idea?
## Footnote
These questions help assess readiness for launching a product.
170
What is more important than planning perfectly according to the text?
Getting things going quickly.
## Footnote
This principle highlights the urgency of taking action in entrepreneurship.
171
What are the two main causes of product stillbirths in entrepreneurship?
The God of Perfectionism and the God of Procrastination.
## Footnote
These factors hinder entrepreneurs from launching their ideas.
172
What is the common excuse people give for procrastination?
I will get to it as soon as I finish up with such and such.
## Footnote
This reflects a tendency to prioritize trivial tasks over important actions.
173
What does the author think about individuals who delay action?
They are often unlikely to start at all without intervention.
## Footnote
This observation is based on the author's experiences with entrepreneurs.
174
What is a key difference between successful entrepreneurs and those who procrastinate?
Willingness to fire when the time is right for firing.
## Footnote
This emphasizes the importance of action in achieving entrepreneurial success.
175
What is the psychological barrier discussed in the text?
Procrastination.
## Footnote
Overcoming procrastination requires effort and can be achieved independently.
176
What did Susan Thomas criticize about the author's speech?
She found the emphasis on action to be a total waste of time and an insult to intelligence.
## Footnote
This reflects a common expectation for specific business tactics rather than motivational advice.
177
What is a critical element of entrepreneurial success according to the author?
Taking action.
## Footnote
The author stresses that many entrepreneurs fail due to inaction.
178
What did the author offer to people struggling with procrastination?
To be their partner and help them get started.
## Footnote
This offer is aimed at encouraging action and reducing the fear of financial risk.
179
What was Susan's primary goal after attending the seminar?
To start a business based on her skill in graphic arts.
## Footnote
This goal reflects her desire for financial independence.
180
What was the first step Susan took to turn her business around?
Start submitting articles to various publications.
## Footnote
This action helped her establish her presence in the market.
181
What strategy did Susan use to overcome perfectionism?
Thinking about the excitement of starting her next project.
## Footnote
This mindset shift helped her focus on action rather than perfection.
182
List the steps Susan identified as crucial for moving into action.
* Decide on your goal
* Find guidance and encouragement
* Make it matter
* Balance learning and doing
* Discover what motivates you
## Footnote
These steps provide a framework for overcoming inertia in business.
183
True or False: The author believes that perfectionism is beneficial in entrepreneurship.
False.
## Footnote
Perfectionism is seen as a barrier to taking action.
184
Fill in the blank: The author believes that __________ is a common emotional barrier in entrepreneurship.
[procrastination].
## Footnote
This barrier can prevent potential entrepreneurs from acting on their ideas.
185
What did the author realize from his experiences with entrepreneurs?
Taking action is a significant part of success.
## Footnote
This realization highlights the importance of moving forward despite uncertainties.
186
What is the first step in moving from a standstill?
Decide on your goal, the direction you want to take—even if it’s the wrong direction.
187
What should you seek for guidance when starting your journey?
Hire a coach, meet with a business friend, or join a mastermind group.
188
Why is it important to make your goals significant?
Make it matter. Make it important. Make it now.
189
What is crucial to balance when pursuing goals?
The time spent learning and doing.
190
What typically motivates individuals beyond money?
What comes as a result of money.
191
What does the 'Ready, Fire, Aim' approach prioritize?
Achieving product quality efficiently.
192
What is the main premise of 'Ready, Fire, Aim'?
It recognizes that it is impossible to get a product right before the customer has used it.
193
What percentage of new-product ideas typically never materialize?
More than 90 percent.
194
What does 'incremental degradation' in product quality refer to?
The sum total of many factors that, when measured individually, are not noticeable.
195
What happened to the candy company after the CEO cut costs?
Sales started tumbling and the candy dropped in ranking.
196
What was the CEO's initial assumption about the product after cost cuts?
That customers could not tell the difference with each ingredient eliminated.
197
What did the CEO realize about testing product changes?
He should have been testing each new version against the original product.
198
What was the outcome after reverting to the original product?
Sales were restored to their previous levels.
199
True or False: Minor reductions in product quality may go unnoticed by consumers.
True.
200
What is a key consideration when attempting to reduce production costs?
Ensure that the quality of the product does not diminish.
201
How can cost reductions sometimes improve products?
By finding clever ways to reduce costs without lowering standards.
202
What is essential for effective testing of product changes?
Testing must be done scientifically.
203
What are the two groups of businesspeople based on their worldview?
* Those who feel the universe is fixed and disconnected
* Those who feel it is interconnected and infinitely expanding
204
What do hoarders believe about wealth?
That it is limited and must be hoarded.
205
How do hoarders typically treat people in their personal lives?
Better according to concentric circles of closeness.
206
What is a potential risk of incremental degradation?
It can lead to catastrophic effects over time.
207
Fill in the blank: The approach of 'Ready, Fire, Aim' is more _______.
practical.
208
What is the main belief of hoarders regarding wealth?
Hoarders believe in competing to acquire wealth and then hoarding it.
209
How do hoarders typically treat people based on their relationships?
Hoarders treat those closest to them better than distant relatives and strangers.
210
What principle do sharers follow that is recognized in ethical codes?
The Golden Rule: Do unto others as you would have others do unto you.
211
True or False: Hoarders believe in treating customers as equals in business transactions.
False
212
What is the hoarders' perspective on customer interactions?
Hoarders see customers as either suckers or enemies.
213
What strategy is recommended for business growth?
Commit to giving customers as much as possible.
214
Fill in the blank: Hoarders believe that in business transactions there is a ______ and a loser.
winner
215
What is the main focus of the 'Ready, Fire, Aim' strategy?
Improving the product after the sales transaction.
216
What should be done with products that are not selling well?
Trash them and create something significantly different.
217
What is incremental improvement?
Regularly upgrading products by small degrees.
218
How often should businesses engage in product improvement?
As often as possible.
219
What is the preferred size of improvements when a product is selling well?
Small, incremental changes.
220
What should businesses communicate to customers regarding product changes?
Make product improvements transparent to customers.
221
What is the ultimate goal of constant product improvement?
Constant, never-ending sales.
222
What misconception do hoarders have about product quality?
They believe they can increase profits by cutting product quality.
223
How do sharers view the universe in relation to wealth?
They see it as infinitely expanding, allowing for the expansion of wealth.
224
What is the contrast between hoarders and sharers in customer treatment?
Hoarders give less to customers; sharers treat customers as they wish to be treated.
225
What is the Rule of Gold according to hoarders?
The less I give to customers, the more I will have left for myself.
226
How do hoarders typically view their customers?
As competitors for profits.
227
What is the recommended approach to product quality?
If it ain’t broke, fix it.
228
What is the first stage of business revenue growth?
From zero to $1 million in revenues.
229
What is required to grow a business from $1 million to $10 million?
Expand the product line and marketing skills.
230
What is the role of the CEO in relation to sales?
Take responsibility for sales moving up.
231
What should a CEO do if they are not a natural salesperson?
Hire or partner with a strong salesperson.
232
What is the first step to improve sales skills?
Exorcising the righteous demons.
233
What common myths about selling should be overcome?
* Selling needs is nobler than wants
* Charging more than worth is bad
* Making good things better is good, but selling is bad
234
What is the reality about the majority of purchases people make?
More than 90 percent are based on wants, not needs.
235
What are commodities?
Things we buy because we need them, like rice and heating fuel.
236
What is discretionary selling?
Selling to desire, which is exciting and unlimited in terms of profits.
237
What is perceived value?
What an item is worth in psychological terms.
238
What does the Golden Rule of Marketing Genius state?
Treat your customers the way you want to be treated.
239
List the benefits customers want from a purchase.
* Ability to buy what they want
* Product performs as advertised
* Good-to-fair price
* Quick delivery in perfect condition
* Treated as a valued customer
* Prompt, courteous refunds
240
What are the three basic approaches to increase revenues?
* Sell to more people
* Get customers to buy more products
* Charge more for products
241
What is the significance of back-end sales?
They are easier to make and provide profits.
242
Why should the front-end marketing team consist of the best people?
They are needed for tipping-point ideas to attract new customers.
243
What is the risk of focusing too much on back-end products?
The business may suffer due to neglecting front-end marketing.
244
What is the recommended strategy for marketing back-end products?
Gather customer addresses and begin communication campaigns.
245
Fill in the blank: The logical mind presumes that we buy things because we _______.
[need them]
246
True or False: Most purchases for business are made out of necessity.
False
247
What type of experts should your B team consist of for marketing back-end products?
Direct-marketing experts
## Footnote
A significant portion of back-end sales should come from direct-marketing efforts.
248
What is the primary goal of gathering customer addresses?
To begin a campaign of communicating with them
## Footnote
This includes both postal and e-mail addresses.
249
What is the first step in increasing back-end sales?
Good customer service
## Footnote
Good customer service involves knowing what customers want, how to provide it, and communicating effectively.
250
List the three components of good customer service.
* Knowing what your customers really want
* Finding out how you can do that for them
* Talking to them about what you are happy to do
251
What does the shop owner in Bucktown understand about her customers?
Her customers want to give their children a rich and productive growing-up experience
## Footnote
This goes beyond merely selling clothing.
252
What is the benefit of recognizing what your customers really want?
It allows you to deepen the relationship and service their deeper emotional needs
## Footnote
This can lead to increased customer loyalty.
253
What is one strategy the children’s clothing store owner could use to provide additional value?
Offering educational toys or music lessons
## Footnote
These align with the customers' desires for their children's development.
254
True or False: Every promotion must result in a direct sale.
False
## Footnote
Sometimes goodwill is enough of a return on investment.
255
What should the shop owner communicate to her customers regularly?
Information about special events, sales, and advice that helps them achieve deeper objectives
## Footnote
This includes newsletters and personalized communication.
256
What does Lesson 1 of the crash course in sales emphasize about customers?
Customers care about themselves, not your business
## Footnote
Marketing messages should focus on customer problems and desires.
257
What percentage of a customer base typically provides the majority of corporate profits?
A small portion
## Footnote
Identifying and communicating with these big spenders is crucial.
258
According to Jeffrey J. Fox, what are the two reasons customers buy?
* To feel good about themselves
* To solve a problem
259
What is the most effective way to generate leads?
Direct marketing
## Footnote
Businesses not using direct-marketing methods miss great opportunities.
260
What is multichannel marketing?
Employing multiple sales and marketing media
## Footnote
Examples include direct mail, radio, and television.
261
What is the Golden Rule of Marketing Genius?
Treat your customers the way you want to be treated
## Footnote
Respect is key to building a sustainable business.
262
What are the four elements of a great marketing campaign?
The Big Idea, the Target Market, the Call to Action, the Offer
## Footnote
Each element must be addressed for success.
263
What is the first element of a great marketing campaign?
The Big Idea: Each advertisement should have one engaging idea.
264
What is the second element of a great marketing campaign?
The Big Benefit: Focus on the customer's wants, needs, and problems.
265
What is the third element of a great marketing campaign?
The Big Promise: A succinct projection of the Big Idea and Big Benefit.
266
What is the fourth element of a great marketing campaign?
The Proof: Claims about product quality must be backed up by solid evidence.
267
True or False: Superior businesspeople view customer complaints as negative.
False: They see complaints as opportunities for improvement.
268
What is meant by a 'no dead end' policy in sales?
Every sale should lead to additional opportunities to solve a customer's problem.
269
Fill in the blank: Marketing geniuses understand that _______ and apathy are the main reasons why customers stop buying.
lethargy
270
What is the 80/20 Rule in marketing?
20 percent of customers will generate 80 percent of profitable sales.
271
What should you consider about a product's unique selling proposition (USP)?
It must be different, better, and desirable to the customer.
272
Why is branding important for every product line?
Each product line needs an identity that differentiates it from the competition.
273
What should you do if a marketing campaign has been ongoing for years?
Evaluate its effectiveness and eliminate weak campaigns.
274
What is the Secret of the Core Complex?
Understanding customers' core worries and desires to create effective marketing.
275
How can you practice reciprocity with customers?
Give something valuable for free to establish trust before asking for something in return.
276
Fill in the blank: Familiarity is the soil in which _______ grow.
sales
277
What should you do after making a sale to maximize customer lifetime value?
Send a thank-you note and a bounce-back promotion to stimulate additional purchases.
278
True or False: High-pressure selling is a recommended tactic in sales.
False: It is counterproductive and can harm customer relationships.
279
What is the purpose of a bounce-back promotion?
To replicate the psychological experience of the initial purchase and encourage further buying.
280
What should you focus on in all product development?
Providing benefits to customers.
281
What sentiment should be at the heart of all communications with customers?
Sincerity
282
What is a key to establishing a long-term profitable relationship with customers?
Giving before you get.
283
What should you ensure when creating marketing campaigns?
They address all four elements of the four-legged stool.
284
What can happen if you do not treat big spenders as VIPs?
They may become disillusioned with your company.
285
Fill in the blank: To understand customer desires, think of their personality as an _______.
onion
286
What is the primary focus of the chapter?
How some businesses stimulate repeat buying and turn occasional buyers into habitual ones
## Footnote
The chapter emphasizes marketing and sales protocols that increase profits by appealing to customer desires.
287
What two factors determine how long a customer will want to buy?
* How much money he has
* How good he feels when making a purchase
288
What is 'buying frenzy' behavior as described in the text?
The tendency of customers to purchase multiple items, often accessories, alongside a primary product
289
Why do iPod users often buy numerous accessories?
They feel they need them after acquiring the iPod, even if they didn't know they needed them before
290
What does the comparison between the author and his client illustrate?
The difference between wants and needs in consumer behavior
291
What is the Law regarding customer buying behavior?
The likelihood of a customer buying a product is inversely related to his need for it
292
What is the corollary to the Law of buying behavior?
The less a customer needs a product, the more likely he is to buy it
293
What three factors stimulate buying frenzies according to the author?
* Feeling that one has more money than needed
* Exposure to effective selling signals
* The good feeling from buying
294
How do wealthy individuals typically behave in terms of spending?
They tend to spend more on individual items compared to those with lower incomes
295
What is a significant takeaway regarding consumerism from the author's perspective?
Selling products that customers don't need can be justified as a normal part of consumer behavior
296
Fill in the blank: The Golden Rule of Marketing Genius is to _______.
Treat your customers the way you want to be treated.
297
True or False: The author believes that buying things you don't need is irrational.
False
298
What psychological aspect does the author associate with consumer spending?
The pleasure derived from owning products and the buying experience itself
299
What is an example of a luxury item discussed in the text?
The jewel-encrusted Mystery pen, retailing for $730,000
300
What is the significance of the author's collection of bags?
It reflects his personal desire and the psychological satisfaction derived from purchasing
301
How does consumer behavior change during a buying frenzy?
Consumers tend to buy more items and spend more money than usual
302
What does the author suggest about the relationship between needs and wants in marketing?
Catering to wants rather than needs can lead to better customer relationships and profitability
303
What psychological satisfaction do consumers seek during a buying frenzy?
Consumers feel they need to spend a lot of money to achieve psychological satisfaction.
304
What is the 80/20 rule in business?
Twenty percent of your customers will be responsible for 80 percent of your profits.
305
List the steps to maximize profits from big spenders.
* Identify potential big spenders
* Market to them aggressively
* Stimulate their psychological desires
* Keep selling until they spend out of their frenzy
306
What happens if a salesperson sells a bag for $69 to someone in a buying frenzy?
The customer may feel unsatisfied because their psychological spending threshold hasn't been crossed.
307
Why do higher-priced watches have greater profit margins?
As watches move up in price, they shift from being seen as commodities to luxury items.
308
What psychological factors influence the value of luxury items?
* Status
* Beauty
* Exclusivity
* Prestige
309
How does viewing a watch as jewelry affect future purchases?
Once a customer sees a watch as jewelry, it becomes easier to sell them another expensive watch.
310
What is one benefit of selling discretionary items?
It is easier to convince customers that products are unique and that they provide psychological benefits.
311
What is the logic behind women's shoe purchases?
Women often view shoes as beautiful and a means to feel good, prompting repeated purchases.
312
True or False: Buying one discretionary item typically reduces the desire to buy more.
False
313
What should a business do when a marketing campaign works?
Keep using it with modest changes until it wears out.
314
What three elements stimulate buying frenzies across industries?
* New money to spend
* Effective marketing that appeals to desires
* The purchase itself
315
Fill in the blank: The fastest way to turn a business into a cash machine is to focus on stimulating _______.
buying frenzies
316
What is a common misconception among inexperienced businesspeople regarding customer purchases?
They believe that more purchases now will lead to fewer future purchases.
317
How should advertising promises be made to customers?
Subtly rather than overtly.
318
What factors affect the length and nature of a customer's buying frenzy?
* Socioeconomic bracket
* Cultural belief system
* Personal preferences
319
What is the effect of making psychological promises indirectly in advertising?
They will generally be stronger.
## Footnote
Indirect psychological promises can create a more compelling appeal to consumers.
320
How do buying frenzies vary among different socioeconomic brackets?
They vary in length, strength, and nature.
## Footnote
Different socioeconomic groups exhibit distinct purchasing behaviors.
321
Describe the buying frenzy of low-end buyers.
Short buying frenzies with very short intervals between purchases.
## Footnote
These buyers often purchase impulsively when they have cash available.
322
When does the buying frenzy for low-end buyers typically begin and end?
Begins on payday and ends when cash is depleted.
## Footnote
Timing advertising to align with their cash availability can increase sales.
323
What is the buying behavior of high-end buyers?
Long buying frenzies with moderate intervals between purchases.
## Footnote
High-end buyers often make purchases over an extended period.
324
When do high-end buyers typically start their buying frenzies?
Near or at retirement age.
## Footnote
Understanding this timing is crucial for businesses offering financial products.
325
How long can high-end buyers' buying frenzies continue?
10 to 20 years at monthly or semimonthly intervals.
## Footnote
This highlights the importance of ongoing customer engagement.
326
What should businesses do to capitalize on low-end buyers' buying frenzies?
Time advertising to hit when they get paid and keep hitting them hard and often.
## Footnote
Consistent messaging can enhance sales during their buying frenzy.
327
What is the main premise of Ready, Fire, Aim?
Disregarding obstacles to find the fastest path to objectives
## Footnote
This method applies to various forms of innovation, including personal and professional goals.
328
How does Ready, Fire, Aim relate to personal goals?
It encourages immediate action without waiting to be skilled
## Footnote
Personal goals often involve doing something or becoming something.
329
What is the first step in the Ready, Fire, Aim approach for personal goals?
Start doing what you want to do immediately
## Footnote
This contrasts with waiting until you feel ready or skilled.
330
What was Marc Singer's initial situation before making his film?
He was an unemployed immigrant from England
## Footnote
His journey began with discovering a community of homeless people.
331
What film did Marc Singer create using the Ready, Fire, Aim method?
Dark Days
## Footnote
This documentary tells the story of homeless people living in a subway tunnel.
332
What was a key factor in Marc Singer's success with his film?
Immediate action upon the idea being suggested
## Footnote
He didn't let ignorance of filmmaking or lack of funding deter him.
333
What are the two types of personal goals mentioned?
* Doing something (e.g., making a movie)
* Becoming something (e.g., a filmmaker)
## Footnote
These goals can be pursued using the Ready, Fire, Aim approach.
334
What common fear prevents people from achieving personal goals?
Fear of not being good enough
## Footnote
This fear often leads to postponing action until a 'better time.'
335
What should you do if you have a personal goal?
Write down a list of everything you want to do or become
## Footnote
Prioritize and select one goal to focus on for the next year.
336
What is a crucial part of the Ready, Fire, Aim strategy?
Making a plan to begin as soon as possible
## Footnote
This emphasizes the importance of starting without delay.
337
What was the outcome of the documentary Dark Days?
It won several awards at the Sundance Film Festival and was nominated for an Academy Award
## Footnote
This recognition helped establish Marc Singer's credibility as a filmmaker.
338
What is the significance of Singer's experience with the homeless community?
It provided the foundation for his documentary's narrative
## Footnote
His integration into the community enriched the authenticity of the film.
339
What lesson can be learned from Marc Singer's filmmaking journey?
Jumping into the process and learning along the way is vital
## Footnote
The journey is more about the experience than achieving recognition.
340
Fill in the blank: A filmmaker is someone who _______.
makes films
## Footnote
This definition emphasizes action over skill level.
341
True or False: The Ready, Fire, Aim approach is only applicable to business ventures.
False
## Footnote
It can be applied to personal goals and creative pursuits as well.
342
What was the author's personal filmmaking goal?
To create a 30-minute documentary related to Jiu Jitsu
## Footnote
This goal aligned with the author's long-standing dream of making movies.
343
What did the author learn from the experience of making a documentary?
The importance of collaboration and immediate action
## Footnote
Partnering with someone helped streamline the process.
344
What approach did the author and his partner take for their feature-length film?
They used the Ready, Fire, Aim approach despite not having a definitive plot
## Footnote
This allowed them to progress without extensive planning.
345
What did the author realize about the filmmaking process during production?
None of the crew, except some actors, knew what they were doing
## Footnote
This highlights the learning curve associated with taking action without prior expertise.
346
What does 'Ready, Fire, Aim' refer to in project execution?
'Ready, Fire, Aim' refers to taking action quickly without extensive planning, focusing on the process rather than the outcome.
## Footnote
This approach emphasizes the importance of starting a project even without complete knowledge or preparation.
347
What was the author's experience with making a movie?
The author attempted to make a feature-length film with minimal experience, resulting in a rough cut that received negative feedback from family members.
## Footnote
The critiques highlighted the film's poor quality, but the author valued the experience of having completed the project.
348
What lesson did the author learn from his first movie-making experience?
The author learned that taking action, even without expertise, can lead to valuable experiences and growth in personal projects.
## Footnote
This reflects the core philosophy of 'Ready, Fire, Aim'.
349
What project did the author apply 'Ready, Fire, Aim' to after making a movie?
The author applied 'Ready, Fire, Aim' to producing an album with a guitarist named Joselito from Nicaragua.
## Footnote
This project involved securing a visa and coordinating recording sessions with his son.
350
How did the author approach the rental real estate market?
The author quickly entered the rental real estate market without extensive prior knowledge, motivated by rising property values.
## Footnote
He utilized friends and a broker to facilitate his investments.
351
What was the outcome of the author's initial investments in rental properties?
The author faced mixed results with his first three properties, learning valuable lessons about property assessment and rental applications.
## Footnote
These experiences contributed significantly to his future success in real estate.
352
What method of skeet shooting is mentioned as being more effective?
'Ready, Fire, Aim' is now taught as the preferred method in skeet shooting, focusing on shooting quickly rather than aiming.
## Footnote
This approach emphasizes instinctual responses over manual aiming.
353
What is the significance of proprioception in activities like shooting?
Proprioception allows individuals to perform tasks like shooting without conscious aiming, relying on brain-body coordination.
## Footnote
This natural ability enhances performance in many physical activities.
354
What are some key characteristics of Stage Two entrepreneurship?
Stage Two entrepreneurship involves:
* Recognizing the end of growth from the first product
* Developing and marketing multiple products
* Enhancing leadership and communication skills
* Emphasizing innovation and speed
## Footnote
This stage is crucial for scaling businesses from $1 million to $10 million in revenue.
355
What mistake do entrepreneurs often make when transitioning to Stage Two?
Entrepreneurs often mistakenly assume their initial success will continue indefinitely, failing to prepare for changes in the business landscape.
## Footnote
This can hinder their ability to innovate and grow.
356
What is the importance of creating efficient four-page business plans in Stage Two?
Four-page business plans help streamline the planning process and ensure clarity in goals and strategies.
## Footnote
Teaching employees to create these plans fosters a culture of planning and accountability.
357
True or False: Stage Two entrepreneurs should prioritize innovation and speed as corporate values.
True
## Footnote
These values are essential for adapting to market changes and driving growth.
358
What does the author mean by 'tipping-point marketing'?
Tipping-point marketing involves tracking trends and focusing on customer needs to create impactful marketing strategies.
## Footnote
This concept is crucial for successful product development in Stage Two.
359
What is the first step to change the way you do business?
Explore how they will change the way you do business.
360
What should you establish as corporate values?
Establish them as corporate values.
361
How should you organize your business for product development?
Organize your business to deal with both front-end and back-end product development.
362
What is the role of the strongest marketers in product development?
Put your strongest marketers to work on the front-end products.
363
What concept should you teach your front-end creative team?
Teach your front-end creative team the concept of tipping-point marketing.
364
What should your creative team focus on?
Always focusing on the customer’s needs, wants, and desires.
365
What is a key standard for the creative team?
Set high creative standards.
366
What should the team be challenged to develop each marketing season?
At least one breakthrough promotion.
367
What is the difference between reinventing good ideas and knocking off successful products?
Understand the difference between reinventing good ideas and slavishly knocking off successful products.
368
What mindset should you instill among your creative players?
Instill a sense of intellectual pride.
369
How should you view being second or third in the market?
Rid your business of the idea that being second or third in the market is bad.
370
What should everyone focus on developing?
Developing good and useful products.
371
What is essential for effective brainstorming sessions?
Understand how to run effective brainstorming sessions.
372
What should you establish during brainstorming sessions?
Establish time limits, standards, rules, and specific goals.
373
What does the 'magic product cube' help with?
Quickly identify all the many ways you can create new products.
374
What factors should be incorporated when using the magic product cube?
Price, product type, and the idea of a unique selling proposition (USP).
375
What should you respect while using the magic product cube?
Respect the experience you have gained.
376
What is the natural law of business?
To grow or die.
377
What is the difference between distress and eustress?
Understand the difference between distress and eustress.
378
What should you use to preserve moments of genius?
Use a tape recorder and insist on the 24-hour rule.
379
What is the 'one step removed' rule?
Learn the danger of going too far afield with new-product development.
380
What does the formula 80% of G= IV 2 relate to?
Teach your people what 80% of G= IV 2 means.
381
What mindset should you cultivate towards new ideas?
Learn to love new ideas and hate sluggishness.
382
Who will always be your best market?
Your existing customer base.
383
What should you do with back-end offers?
Pummel your customers with back-end offers.
384
What is a key strategy for testing ideas?
Figure out how to test your ideas as cheaply and quickly as possible.
385
What should be an integral part of your back-end strategy?
Make direct marketing an integral part of your back-end strategy.
386
How can you deepen relationships with customers?
Communicate with them more frequently and in more depth.
387
What concept should you establish for innovation?
Accelerating acceptable failures.
388
What does 'Ready, Fire, Aim' emphasize?
Understand the effectiveness and efficiency of Ready, Fire, Aim.
389
What should you teach your people about good ideas?
Understand what a good idea is.
390
What should you rid yourself of in product development?
Rid yourself of the desire for perfection.
391
What action is often better than doing nothing?
Taking action, even incorrect action.
392
What is the process of getting a good idea ready for action?
Remember, it’s Ready, Fire, Aim, not Fire at Will.
393
What are the seven critical questions to ask before launching a new product?
1. Is it a good idea? 2. Does it feel like a good idea? 3. Is it economically feasible? 4. Can I afford to test it? 5. Do I know what has to be done? 6. Do I have the people to do it? 7. Do I have a Plan B or an exit strategy?
394
What should a Ready, Fire, Aim business plan include?
1. No longer than four pages. 2. Rough financial projections. 3. Critical tasks. 4. Key people. 5. Ties tasks to dates. 6. Answers each of the seven critical questions.
395
What should your marketing team understand?
The importance of brevity.
396
What should you teach about realistic projections?
Learn the trick of contriving realistic projections quickly.
397
What types of team members are important in Stage Two growth?
Champions, workhorses, and superstars.
398
What should you recognize to avoid procrastination?
Understand the signs of procrastination.
399
What should you prioritize instead of hoarding good ideas?
Putting good ideas into action.
400
What should you teach about incremental degradation?
Read the story about incremental degradation in the candy company.
401
What should you become an expert in?
Assessing success quickly.
402
What should you know about reducing product costs?
Understand when it pays to reduce product costs.
403
What is the difference between the Golden Rule and the Rule of Gold?
Do you know the difference?
404
What culture should you cultivate in your business?
A sharing culture.
405
What should your salespeople understand about lifetime value?
Teach them to believe in lifetime value.
406
What maxim should you adopt regarding fixing products?
If it ain’t broke, fix it.
407
What should you be aware of regarding incremental augmentation costs?
The strain it puts on your best production people.
408
How often should improvements be made for each product?
Determine how often improvements should be made and set up a schedule.
409
How should you communicate improvements to customers?
Speak to your customers about the improvements you make.
410
What should you figure out about your sales orientation?
Figure out how sales-oriented you are.
411
What are the three most common myths about sales and marketing?
1. Wants and needs. 2. Fair value. 3. What good businesspeople really do.
412
What should a three-part marketing plan include?
1. Selling your product to more people. 2. Selling more products to your customers. 3. Charging more for your products.
413
What do customers care about?
They care about themselves.
414
What is true about a small portion of your customer base?
They are giving you the lion’s share of your corporate profits.
415
What begins almost every sales transaction?
Generating leads.
416
What type of marketing should you learn?
Multichannel marketing.
417
What policy should you maintain regarding customer complaints?
Maintain a 'no dead ends' policy.
418
What should you understand about customer inertia?
Take advantage of customer inertia.
419
What rule should you apply intelligently?
The 80/20 Rule.
420
What should you understand about each product's USP?
Understand the unique selling proposition (USP) of every product.
421
What should you never lose in marketing?
Your marketing edge.
422
What is the Secret of the Four-Legged Stool?
Understand the Secret of the Four-Legged Stool.
423
What should you practice with your customers?
Reciprocity.
424
What attitude should you have when selling?
Be confident and enthusiastic.
425
What should you avoid doing with customers?
Don’t push or bribe your customers.
426
What should you determine for every product line?
1. How strong the buying frenzy will be. 2. How long it will last.
427
What methodology should you apply to any goal in life?
Apply the Ready, Fire, Aim methodology.
