Mystery Makes Margin  
		From The Desk Of 
		Drumlin S Boulder
		Do you like making your life complicated? 
		 
		Neither do I, but that's what was on the table at our regular Monday 
		morning marketing meeting when Symon, our marketing whizbang, decided we 
		should break down our Portable Holes into different parts just so we 
		could bundle our products together. We could then charge a higher price 
		for individual components, but offer our customers the illusion that 
		bundling would save them money. 
		 
		I protested saying our sales materials would have to change and our 
		sales language would become more complicated, with various options 
		having to be explained. Even individual components would have to be 
		described, meaning our customers would have to be re educated on how our 
		Portable Holes are sold and fit together. Carrie Balance, our 
		accountant, also started in about having to change our inventory 
		routines, and Pronto our shipping manager began foaming at the mouth. 
		Not a good sign. 
		 
		But Symon, ignoring Pronto's obvious body language, insisted. "Mystery 
		makes margin" he said, adding "we can increase profits by preying on our 
		customer's insecurity and lack of knowledge by using complex language. 
		Management consultants, lawyers, accountants, insurance agents, 
		investment advisors and other service slingers do it all the time when 
		they want to charge high prices for stuff we wouldn't otherwise value 
		very highly." 
		 
		Point made, which got me thinking of the worst offenders. Have you 
		talked to your phone company lately? 
		 
		I hate it when they call. It always starts with them enquiring about how 
		satisfied we are with their service, progresses to them wanting to save 
		us money, then they try and sell us some complicated communications 
		bundle that makes no sense whatever....except they invariably want to 
		bundle stuff we'll never use with something we really want. Its always 
		hard to know what they're selling and even harder to know whether it's 
		what you actually need. 
		 
		Of course phone companies are not the only ones who like to bundle stuff 
		you need with what you don't need. Personally, I think its the route 
		companies takes when a product flops. I can see the board meeting now. 
		"Hey lets bundle our top selling widget with that flopget so that at 
		least we'll get something for it". The head of communication will then 
		suggest they invent some jabberget  language to make sure customers 
		won't admit their ignorance, and make it hard for anyone who tries to 
		make apples-to-apples comparisons of different alternatives to make 
		sense of it. 
		 
		No I wasn't comfortable with Symon's approach. 
		 
		You see I think the even though our basic Portable Holes may look like a 
		portable hole with a detachable control unit, they are technically 
		complex once we add various extensions that tailor it to specific 
		situations, so we favour simple presentations that explain our product 
		in simple terms and benefits, and we avoid the small print. Our 
		customers can see where their money goes and clearly see what they are 
		buying, and they know why they are buying it. Our key selling goals are 
		to make a buyer's shortlist because of our "all in one hole" solution 
		and our reputation, then to send in knowledgeable people who can explain 
		things in simple terms. We gather information from potential clients 
		through questions, conversation, and idea-sharing. This way we can build 
		a portable hole to suit their precise needs and budgets. 
		 
		It's the way we win. By listening, working together, and making exactly 
		what our customers want, they pay us more because we give them something 
		that meets their needs better. "People pay for value," I said, "And they 
		know we aren't perfect, but we do a good job and stand behind our holes. 
		Playing the parts game means we'll have to compete on price", I added, 
		and Carrie interjected with "and that'll play havoc with our margins" 
		 
		Symon made a last ditch effort to convince us. "Nothing is too difficult 
		to explain" he said, "its only that people can be bad at explaining." 
		"You know, Stephen Hawking has explained black holes." "Why can't we.." 
		he started to add, but he was cut off by Slide Rule, our Chief Engineer. 
		"Yeah, but he recently paid off a bet with a colleague because after 
		many years of insisting that a black hole destroys everything that falls 
		into it, he's now saying he was wrong. It seems that black holes may 
		after all allow information within them to escape" 
		 
		Nothing escapes Slide Rule. He knows everything about holes; portable, 
		black, deep, gopher... he even read that kid's book. So as our chief 
		designer, his opinion was vital. 
		 
		So we listened intently as he went on. "When we buy any tool, we want to 
		concentrate on what we can do with it, not how complex its parts are. We 
		want delivery of solutions, not a complicated analysis of options that 
		get in the way of understanding how the solution is delivered. It's 
		wrong to think complexity of a process or system is in itself value. In 
		fact, the opposite is true. To describe or design something in simple 
		terms is an act of genius." 
		 
		"Think about it", he added. "Do you want a hockey stick because you can 
		really whip the puck with it, or because it is made of carbon fibres 
		that bend to specific tolerances?" "Exactly", countered Symon... "hockey 
		sticks used to be just wood and tape, then they got curves, and now you 
		can buy just shafts from various materials, in various tolerances, and 
		blades can be bought separately." "Sporting goods manufacturers have 
		done exactly what I want to do, and they're skating away with the 
		profits". 
		 
		The discussion went back and forth a bit longer but in the end, we 
		decided Slide Rule was right and simple was best for a complex product. 
		So we voted almost unanimously to one to forget bundling. 
		 
		Privately, I considered giving Slide Rule a raise for cutting through 
		all the clutter, and making us see the problem clearly. But I'm not sure 
		I can afford to give it to him. After we collectively dismissed Symon's 
		idea and closed the meeting, Pronto came up to me to ask if we would 
		sponsor his son's novice triple A hockey team for $10,000, almost double 
		our level of last year. The increased cost was justified, he said, 
		because of escalating equipment costs. 
		 
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