Aaron Hoos

You’re probably already familiar with Foursquare, the social media site that lets you “check in” to venues and leave tips and to-dos while generating a stream/timeline of where you go and what you do.

I like Foursquare. I think it combines two powerful forces on the web right now: social and local. It gives you the ability to share with those around you in a way that can be practical and valuable (for your friends and for you). Regular use of tips and to-dos, as well as the marketing opportunities that businesses can enjoy because of Foursquare, makes this site a potentially powerful tool.

But Foursquare is also a game. The game seems to be an integral part of the site — people collect points and badges (even though they have little use right now). In fact, Foursquare even says they’re a game.

Foursquare isn’t a game in the same way that, say, chess is a game, or World of Warcraft is a game, or Monopoly is a game. It’s not a separate environment with distinct rules and winners and losers. Rather, it’s a social utility that has an element of gaming to it: Incentives and a dash of fun… more like an environment where good-natured competitiveness and one-upmanship can thrive.

Recently, I heard about another site that offered something similar: It, too, is a social utility with a gaming element.

EmpireAvenue is a site that helps users put a value on their social “footprint’ while at the same time acting as a sort-of stock market where you can buy and sell shares in people.

I just signed up to check it out (so I might not have all of my facts nailed down) but it basically works like this: You sign up and get some money (“eaves”, I think they’re called). You can buy shares in other people. The price of their shares rises and falls based on — (well, I haven’t fully figured that part out yet) — something to do with their social network.

What’s also interesting about EmpireAvenue is that they have a monetization model that could be very beneficial for social influencers down the road.

Like Foursquare, it’s not a game but a site that has a practical purpose but in an incentivized, enjoyably competitive environment.

LIFESTYLE GAMING: A NEW TREND?
This has me wondering if we’re seeing the beginning of a new trend. For lack of a better word, I call it Lifestyle Gaming — that is, the addition of a gaming element to something you would normally use in your life, perhaps to enhance your lifestyle.

There are Foursquare alternatives out there (off the top of my head: Loopt, Gowalla, and Facebook Places) and they don’t have the gaming element that Foursquare has. And, there are social media valuation/measurement tools out there (Klout is my favorite) that again does not have the gaming element that EmpireAvenue has.

Are there others that I’m not aware of or have overlooked? Where might we see additional Lifestyle Games appear? Are there current sites that would benefit from the addition of Lifestyle Game attributes? I’d love to hear your thoughts on this!

I was reading Alan Weiss’ book Million Dollar Consulting. It’s a pretty good book (although I like his Ultimate Consultant Series better). In the Million Dollar Consultant he mentioned something that I thought was a valuable way to look at gaining a competitive advantage:

Weiss suggested that there were 3 “levels” of value on which you compete: At the competitive level, in which your offerings are similar to your competitors; at the unique level, in which your offerings are – obviously! – the only ones on the market; and at the breakthrough level, in which your offerings are so insanely valuable and insightful that the others aren’t even in the same league.

That makes sense and I think most entrepreneurs would agree that these are the three levels of value a business’ offerings should have if the business is going to survive.

But here is where Weiss takes a surprising turn: He says that your products should be competitive, your services should be unique, and your relationship with your customer should be at the breakthrough level.

Weiss suggests that it is expensive to implement breakthrough characteristics across all three offerings (products, services, and relationships), and that products and even services can easily be copied by competitors. So instead, he says, your products should only be at the level equivalent to compete with your competitors… the real difference is in the relationship, which should be astonishingly value-added.

I’ve spent some time thinking about Weiss’ ideas and am building on them with my own ideas below:

HERE’S WHY THIS IS GOOD NEWS FOR EVERY BUSINESS

• Existing businesses spend a lot of money on product innovation while their relationship-building remains lackluster at best. Investing even half of the money spent on adding innovating product value into adding relationship value can have a huge impact on customer retention and word of mouth.
• Some businesses – especially smaller home-based businesses (Tupperware, Norwex, Avon) and businesses where there is no product differentiation (real estate, investment firms, accounting firms, dentists, freelancers) – simply CAN’T innovate their products or services. So relationship value is going to be the key differentiator.
• It costs money to innovate products (and often services). It doesn’t cost as much money to innovate relationships. Rather, it costs time.
• Start-ups that have a simple product and not a lot of money can still compete in the big leagues with unparalleled relationship building.

HERE’S WHY BUSINESSES WON’T FOLLOW THIS MODEL

• Product innovation is sexy and gets way more funding in budgets than relationship-building
• Linking sales to products is much easier than linking sales to relationships – and when you innovate your product and see sales go up, it’s easier to make the connection between product innovation and sales.

WHAT CAN YOUR BUSINESS DO TO ACHIEVE BREAKTHROUGH RELATIONSHIP BUILDING VALUE?

• Start by analyzing your sales funnel to understand how you market, sell, and build relationships. Understand how specific activities in your sales funnel move contacts forward.
• Implement a CRM system. In other words, stop leaving customer names on sticky notes on your office wall. Tie your CRM system to your sales funnel.
• Keep diligent notes on your clients.
• Market your ass off to load up your list of prospects and build relationships with those contacts. Sales will happen if you do that.
• During a sale, keep your customer informed at every step. Don’t ever let them wonder about what the next step is or whether you’ve forgotten about them. (Note to self: I’m definitely guilty of this).
• Find out what your competitors are doing and go an extra mile. No, wait. Go an extra ten miles. Call your customers more (without bugging them). Email them. Follow them on various social media. Participate in their conversations.
• After the sale, remember that you have a relationship with them. Don’t ignore them. Don’t treat them like a prospect. Build an entire system around the post-sale customer. Send them valuable things (not just coupons for another product, but information that you think they’ll find valuable). Take a personal interest in them. Figure out what they need in their business and connect them with people and information that can help them… even if it means no additional revenue for you.

When I say “innovation”, what do you think of?

Chances are, you think of innovation in your products and services; you may think of blue widgets instead of the normal red ones, or you might think of a way to deliver faster, cheaper service. In the early days of the automobile, other manufacturers provided cars in other colors, innovating beyond Ford’s “any color as long as it was black”. Southwest Airlines provided faster, cheaper service at regional, non-core airports, innovating beyond the other mammoth airlines and their bloated operations.

Books like Blue Ocean Strategy (one of my favorites!) supports this idea of product- or service-specific innovation. However, your products and services aren’t the only place where innovation can happen.

Innovation can happen in your processes, too.

Your processes are the functions and actions required to operate your business but which aren’t necessarily tied to a specific product or service. Examples include:

• Accounting activities
• Order-fulfillment and distribution activities
• Sales funnel activities

A great example of this kind of innovation is Amazon. They didn’t invent or really innovate books (well, until they came out with the Kindle) but they did innovate their sales funnel and order-fulfillment.

Process innovation is better than product or service innovation anyway:

• Process innovation is harder for competitors to quickly discern and copy
• Process innovation doesn’t alienate customers as much as a change in products or services would
• Process innovation can have an immediate, positive impact on financials with some expenditure but without the same related tooling, inventory, or marketing costs

The only drawback (if you want to call it a drawback) is that you don’t end up with whiz-bang products and services because of it and you can’t always promote your innovation to customers. (“Buy from us. We have the most amazingly innovative accounting processes!”)

So you’ll still want to push for product or service innovation to stay ahead of competitors. But you’ll want to continue process innovation to turn your business into a finely-tuned machine.

Here’s what to do:

1. List the steps in your process. For example, your sales funnel might be: lead, prospect, customer, etc. Or, your accounting process might be: gather data, sort, input, submit to the accountant.
2. Identify the specific actions you take at each stage. Write down all of the distinct, discrete actions. For example, you might have an action in your sales funnel where you capture an email address. Or you might have an action in your accounting process where you put your documents into a box to bring over to the accountant’s office.
3. Treat each stage and each action like a specific sub-process that can be modified.
4. Apply some of the well-known innovation-creating tools. Start with a SWOT analysis then try Kim and Mauborgne’s Four Actions Framework.

It wasn’t that long ago that people wouldn’t pay more than about $50 for jeans. Now, $300 plus is a distinct possibility. You can’t just blame inflation. There’s been a transition in how we define luxury.

In this article, Dan and Chip Heath talk about how luxury has changed and why products that weren’t luxurious can become luxurious.

The Inevitability Of $300 Socks – Jeans – Luxury – Connoisseur | Fast Company.

If you sell products, read this article. Find out how your products can become high-end luxuries.

Greg Ballard talks about great products, which are a good start for businesses but they need more.