You’ve Got to Wonder About Tiffany & Co.
- WEALTHY: What do doves and hawks have to do with investing? (Charles Delvalle)
- HEALTHY: Aspirin? Ibuprofen? Or … caffeine? (Dr. Al Sears)
- WISE: Leo Burnett on advertising
ALSO IN THIS ISSUE:
- Why haven’t I been getting phone calls from Tiffany? (Michael Masterson)
- Feedback Friday: ETR’s new look
- Add "bellicose" to your vocabulary
Get Business Ideas That No One Else Thinks Of
"I want to start my own business, but I don’t know what to sell."
It’s something we hear all the time here at Early to Rise. Fortunately, there are plenty of ways to find your own market niche…
Let’s say, for example, you’re interested in selling nutritional supplements, but you’ve done the research and found a ton of competition out there. What to do?
Make your product unique. Come up with a formulation that has a combination of ingredients not found in the other supplements. Now you’ve got something no one is offering.
"EnerMaxx is the only supplement featuring both niaflavin and ribosome, so you’ll have more energy AND longer endurance."
You can find at least 100 more powerful methods for developing product ideas in ETR’s Direct Marketing University program. If radically increasing your income with a successful home business sounds appealing to you, read more about it here…
How Central Banks Affect Their Country’s Economy
By Charles Delvalle
You may have heard the terms "dove" or "hawk" in reference to a central bank - and wondered what they meant. Both refer to an attitude toward inflation.
A dove is a central bank (or bank chairman) that isn’t threatened by inflation and, therefore, advocates monetary policies - low interest rates and excessive credit creation - that stimulate its country’s economy. Since banks implement these policies most often when an economy is slowing down, currency traders sell the currency connected to a dovish central bank. Why invest in a currency that’s about to drop in value compared to the currencies of countries with expanding economies?
A hawk, on the other hand, is a central bank (or bank chairman) that feels it’s necessary to fight inflation by raising interest rates and slowing credit creation. Currency traders buy when they see hawks in control, because these policies are normally implemented when a country’s economy is on the rise - and rising interest rates allow a currency to gain value compared to currencies with lower interest rates.
[Ed. Note: Charles Delvalle is a contributing editor to the Investor’s Daily Edge newsletter, and a regular contributor to INCOME, ETR’s new investment service. INCOME provides a slew of high-dividend-paying companies, with the goal of providing you with a total return (dividends plus capital gains) of at least 14 percent per year.]
"Good advertising does not just circulate information. It penetrates the public mind with desires and belief."
Leo Burnett
You’ve Got to Wonder About Tiffany & Co.
By Michael Masterson
In December, KY gave all the AWAI employees presents from Tiffany. Everybody was very happy.
After my last book was published, I sent the dozen people I thanked in my acknowledgments silver pens from Tiffany. They were very appreciative.
When a friend gets married or has a special event and I’m not sure what to send, I always fall back on "something from Tiffany."
I don’t wear any Tiffany jewelry or use any Tiffany accessories, but as a gift giver I’m a big Tiffany fan.
But there is something that puzzles me about this company. In the past five years, I have bought products from them at least two dozen times … and yet they’ve never prompted me to buy more. They’ve added me to their catalog mailing list, but that’s it.
It makes no sense. Why would they leave me alone? Why wouldn’t they do everything they could to get more business from me?
Making a purchase at Tiffany is a brand-centric buy. By that I mean that Tiffany customers happily pay a premium for their products because those signature blue boxes convey a psycho-emotional benefit that can’t be gotten elsewhere.
It’s all about the blue box. It says something specific and desirable about the purchaser: that he or she has sophisticated, understated good taste.
When you walk into a Tiffany store, you know you are going to be treated well. When you buy something from Tiffany, you know it will be unique, beautiful, and well made. At least that’s the way Tiffany was in the beginning and - thanks to a recent management decision - is once again.
For a while, the company made the mistake that Mercedes made a few years ago: downgrading its product line to attract a wider audience. In the late 1990s, the honchos at Tiffany headquarters decided to sell inexpensive silver jewelry to take advantage of the booming market for "affordable luxury" - i.e., brand names that middle-class people could afford to buy. "The 1997 introduction of the silver ‘return to Tiffany’ collection, which offered jewelry inscribed with the Tiffany name for just over $100, was a huge hit," The Wall Street Journal reported.
Sales exploded, earnings more than doubled, and the stock price shot up too. But in the years that followed, the Tiffany brand lost its exclusiveness as their stores became crowded with younger and less affluent people. "I felt like I was in Macy’s," one longtime Tiffany customer told the WSJ.
Although there was plenty of profit in the low-end jewelry, in 2002 Tiffany leadership decided to reassert their claim on the luxury corner of their market. They began raising prices on the less expensive items and, after a lag, sales of those products slowed and the stores became less crowded.
But buying of the higher-priced items grew. A good sign. But because Tiffany was giving up the high-margin, middle-market jewelry sales, earnings were down 16 percent last year. The stock market didn’t like that. Share prices sank by 40 percent.
"I hope we didn’t go too far," the CEO told the WSJ.
I don’t think they did. Getting out of the middle market was the right move, even if it did cost them earnings in the short run. They could easily make up for those lost earnings and then get back to building their very good business if they would just pay more attention to what I think are their best customers: high-end and gift buyers.
You want to go after your high-end buyers because, next to low-end buying, high-end purchases typically have the greatest margin. And you want to stimulate gift purchasing because there are so many opportunities to do it.
Tiffany has always had a brilliant selling strategy that appealed perfectly to the sophisticated, high-end buyer:
- Beautiful, quiet stores
- Famously attentive clerks
- A dual product line that appealed to the same wealthy buyer
Their two primary product lines were expensive jewelry and attractive silver accessories. If you came in to buy jewelry for yourself, you might buy some additional gift items for friends or relatives. If you came in to buy gift items, you might be inclined to buy yourself or a loved one an expensive piece of jewelry.
Which gets back to my original question: Why haven’t I been getting phone calls, e-mails, and letters from Tiffany?
There is only one possible answer: Although Tiffany’s leadership has the right idea about positioning their unique and valuable brand, their marketing executives don’t know enough about making back-end sales.
Back-end marketing means getting current customers to buy more from you. It works partly because of something I’ve labeled the "buying frenzy" in past ETR articles: When people buy something, the buying itself does not satisfy the urge. It excites it.
In most businesses, there is a good chance that fewer than 20 percent of your customers are giving you more than 80 percent of your profits. This is so because repeat and upgrade sales usually require the least investment of your marketing dollars and are therefore the most profitable.
Astonishingly, some of the businesses I work with don’t know - when I start working with them - who their best customers are. They are aware that a limited number of people are buying a lot of their stuff, but they don’t keep a list of those people or make special efforts to sell to them.
Big mistake.
Your best customers have not only already spent the most money on your products, they are also the ones who will spend the most money on your products in the future.
If you don’t know who your best customers are, find out.
If you know who they are but aren’t marketing to them (a) more frequently, (b) more personally, and (c) with increasingly expensive products, make a plan to do so.
As I said in ETR #426, what those customers paid for when you acquired them in the first place was not only the product but also the experience of being sold to and making the purchase. I’m talking about the intangible benefits - the promise of fulfilling dreams, hopes, and desires - that are present in any good selling/buying experience.
Start selling. Keep selling. And make sure you continue to give your customers the intangible benefits that will feed their buying frenzy and keep them coming back for more.
Maybe one day the people at Tiffany will start reading ETR and figure out just how important this is. Maybe they’ll realize how good it makes me feel to buy and give gifts in that little blue box … and get me to buy and give even more of them.
Lightning-Fast Profits in the Hottest ETFs
With Exchange Traded Funds you get the money-making power of stocks combined with the diversification of mutual funds. Now, let me show you how to use ETFs to make 100% profits in a short period of time with just a small amount of capital.
The gains are already pouring in — 304%… 130%… 107%… 82%… 67%… 81% — but the best is yet to come! Click here to learn more.
Drug-Free Post-Workout Pain Relief
By Al Sears, MD
Back when I was in college, caffeine was by far the most-used performance-enhancing drug. The locker room buzz claimed that it not only made exertion feel easier but also helped ease the aches and pains athletes get after competition. All these years later, a new study indicates that the guys were on to something not yet known by doctors.
Researchers from the University of Georgia recently discovered that caffeine in a dose equivalent to two cups of coffee can cut post-gym muscle pain. Their findings - published in The Journal of Pain - showed that caffeine lowered pain by as much as 48 percent. Caffeine actually proved more effective than the common pain relievers naproxen (Aleve), aspirin, and ibuprofen (Advil).
I’m not telling you to down cup after cup of coffee after a workout. Always use caffeine in moderation. Too much can produce side effects like jitteriness or even heart palpitations. And keep in mind that the University of Georgia study also found that those who drank coffee regularly didn’t get as much pain relief as those who rarely had caffeinated drinks.
If you don’t tolerate caffeine well, here’s an alternative for you - without side effects or the risk of addiction: ribose. Taken before working out, this simple sugar reduces or prevents exercise-induced muscle cramping and soreness.
I recommend a dose of two to five grams of ribose. Just dissolve the pleasant-tasting powder in water. It has worked wonders for both my patients and me. You can find it at your local nutrition store.
[Ed. Note: Dr. Sears, a practicing physician and the author of The Doctor’s Heart Cure, is a leading authority on longevity, physical fitness, and heart health.]
Feedback Friday: Responses to Our "Makeover"
We ushered in the New Year at Early to Rise with a brand-new "look" - and we asked our readers to tell us how they like it. (By the way, you can still comment - pro or con - by writing to us at ReaderFeedback@gmail.com.) Here are some of the e-mails we’ve received so far …
"I really like the new layout of ETR and the fact you are willing to constantly seek improvement in whatever you do. What a great example!"
Wayne D. Holt
Houston, TX
"Excellent redesign of the Sunday ‘weekly’ ETR review. Clean, informative, and very functional."
Ted Robinson
Bloomfield Hills, MI
"I love the new layout. I think it is much more appealing and easier to read. I also still enjoy the information and the motivation. I plan on using the goal-setting tool you offered. After many years of wanting to accomplish more in my life, I finally feel like I can ‘Resolve to Make 2007 the Year I Get Off My Butt and Finally Do All the Things I’ve Always Wanted to Do!’"
Mike L.
Owatonna, MN
"I just wanted to drop a quick note, a big thumbs up on your e-mail’s new look, congrats."
Tony Engler
Yelm, WA
"Blinking, moving, scrolling, ever-changing side-bar ads?! P L E A S E !! I implore you to make them go away. To have anything moving in the visual field is a horrifically distracting intrusion for the reader. Yes, it makes me look at them, B U T … If I stop looking at the ETR newsletter altogether, I won’t EVER see them.
"Please reconsider this intrusive, over-the-top, ‘gee-I-just-learned-to-make-Web-pages’ juvenile approach to marketing. (Yes, I am serious about those disparaging modifiers.)
"BTW: My Outlook is set to not download images, and I’ll leave it that way, so I’ll get the great content of your newsletter but never see those wildly irritating ads."
CW
Clackamas, OR
"Congratulations to the designers of your new look! It’s subtly different and more reader-friendly in its setup. The tab at the top is contemporary, the color scheme is still yours, yet the overall look and feel is new and vibrant.
"I am going to use your old-to-new in a graphics presentation at a yearbook workshop next Friday as an example of how to maintain one’s integrity and personality in a publication and yet make new statements.
"Thanks once again for all you do - and, by the way, my one FIRM resolution for the new year is to read, not just skim, not just file, each edition of ETR first thing in the morning! I already do the getting up an hour earlier; you’re right, it’s the best time of day to get things done … and it gets the day started on the ‘right’ foot!"
Marcia Meskiel-Macy
Melbourne Beach, FL
Turn YOUR Brain into an Idea-Generating Cash Machine
Want to know the same secrets that McDonald’s Ray Kroc, Microsoft’s Bill Gates, and Amazon.com’s Jeff Bezos use every day to keep their businesses at the top of their game?
It’s the most valuable money-making secret on the planet and the easiest to convert to cold, hard cash…
Take advantage of this unique method, made easy by a million-dollar idea superstar today!
Word to the Wise: Bellicose
Someone who’s "bellicose" (BEL-ih-KOSE) is aggressively hostile and inclined to fight.
Example (as used by Lee Siegel in a New York Times review of Norman Mailer’s The Castle in the Forest): "[Mailer’s] bellicose bravado seems to be a stay against the dissolving of his personality and - not always successfully - against self-induced harm."
[Ed. Note: Become a more persuasive writer and speaker … build your self-confidence and intellect … increase your attractiveness to others … just by spending 10 VERY enjoyable minutes a day with ETR’s new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007