Look for Unrecognized Value
Michael Loeb, the cofounder of the highly successful Synapse Group (www.Synapsegroupinc.com), notes that “one man’s garbage is another man’s treasure.” Synapse succeeded, in part, by turning credit-card billing statements into a valuable sales medium. “No one had ever regarded this as a true communications medium or optimized it,” he says. Start by identifying underused assets, and find a way to bring value to the asset owners on an outsourced basis. The fascinating story of how the Synapse Group realized this objective is detailed on pages 167–170.
Imagine Potential Pricing Innovations
Many businesses are held back because of the way they set prices. Fees based on hourly rates—which are open-ended—as compared to flat rates often discourage purchases. All types of upfront fees, with no guarantee of results, similarly discourage firms from trying new services. Companies that have figured out how to eliminate the risks for the customer in their pricing systems, while still earning a profit, have proven to be solid innovators. In fact, a particularly useful finding of the research and interviews for this book is the significant extent to which businesses built on extreme outsourcing employed strategies related to pricing innovation. Many such businesses found approaches to pricing that worked for the entrepreneurs and made it incredibly easy for prospective customers to say yes.
Businesspeople are always concerned about the potential, unchecked cost of service work that is billed by the hour. As detailed on pages 106-108, a central component of 1–800-MYLOGO’s (www.1800mylogo.com) initial success was the development of a flat-rate package that served the client’s needs and allowed the company to make efficient use of its time.
