Opportunity Recognition

When you see something in life you don’t understand, do you get upset? Human nature dictates that people fear what they do not understand. I see this mentality often, particularly where people mock human behavior. You see this reaction with phenomenons such as:

• Pokemon Go

• Cabbage Patch Kids

• Pet Rock

The negative emotion towards human behavior doesn't change the inevitable. Somebody took a healthy profit from this behavior. Instead of getting upset, a smart marketer found opportunity through human nature. I dedicate this blog post to keeping a cool head while unlocking ways to profit during these events.

Pokemon Go

People running into cars. People spending hours trying to catch a digital entity. People oblivious to their surroundings. No doubt you’ve heard: Pokemon Go is all over the news. The average person frowns upon human behavior. Why does the average person fail to profit? Because they discount human nature. Yet there exists a rare few who avoid complaining about human behavior. Instead, they spot the silver lining, and profit. While the herd shuns Pokemon Go players, marketers feast like ravenous predators. Take a step back for a moment and visualize the massive opportunity Pokemon Go presents.

Customer Location Foreknowledge

Before I present the case study, let’s reveal the goldmine. You know where your customers are going to be! Do you know how many businesses would give their left arm to know in advance where the customers will be? Savvy marketers have leveraged Pokestops and lures to encourage people to visit their business. Independent food and beverage salesmen capitalize with FaceTime amongst Pokemon Go players. How? They set up a stand and offer snacks, like a young girl did in Texas.

Consider the pizzeria case study on inc.com - https://www.inc.com/walter-chen/ pok-mon-go-is-driving-insane-amounts-of-sales-at-small-local-businesses-here-s- h.html.

Let’s extrapolate the numbers from this article:

• 14,500 Pokecoins / 680 = 21 eight-packs of lures
• (21 * 8)/2 = 84 hours
• $100/84 hours = $1.19 per hour

So it takes $1.19 per hour cost. The article mentions 30 people stopped in the store, presumably customers. Let’s take an average spend of $150 from the extra customers. Let’s multiply that by a 5 day stretch on weekdays. $150 x 5 = $750. For an ad (lure) spend of $6.00 per hour. Let’s visualize this on simple terms: you have an ATM machine. You put $1.19 in the machine and it gives you back $5, $10, $50. What rational person would refuse that?

McDonalds, no slouch to opportunity, plans to convert 3,000 stores into Pokemon Gyms. There is a lesson here: people who find streets paved with gold are people who keep their eyes open.

The Smell Vacuum

Other opportunities present themselves in subtle ways. I take the train into Chicago for work. Inside the train station, they have various shops. Magazine stores, beauty products, and restaurants. The king of opportunity makers, hands down, are the restaurants. When people leave or enter the train station, they funnel into a hallway. Restaurants line each side of the hallway. Now, here is where the magic happens. Because it’s a closed, condensed area, your nose gets bombarded with food smells. Donut shops, pretzel makers, and sandwich places all get in on the action.

Positioning and Timing

The majority of train station foot traffic occurs during two meal times. One is breakfast, one is dinner. Now, a regular restaurant does not need to make food all day. Yet, the smart ones leave the oven on and always bake something. Why? Because these hallways and enclosed areas act like a smell vacuum. So thousands of people pass these small areas have the smell rammed right up their noses. Baking bread, pastries, and pretzels are some of the scents you encounter in the hallway.

Now, assume that a percentage of people during the rush times at the train station are hungry. Downtown has many eating establishments. When train passengers smell fresh food, the probability favors the hallway restaurant. They may have had plans to go to Starbucks for breakfast. But the smell of coffee and donuts from Dunkin Donuts in the train station forces their hand. The customer decides to go to Dunkin Donuts instead. So, the smell changed the sale. That is one person. Imagine that on a scale of thousands of people, for two meals a day!

Existing customers and building assets

Keeping with our theme of opportunity, let’s take a pizza place case study. I’m going to scale down numbers from a case study I listened to on a webinar. Let’s say each month, the pizza place gets 20 customers a day. In a 30 day month, that is 600 customers. For the sake of argument, let’s discount repeat customers. Assume 600 unique customers each month.

Now this pizza place has an average business owner who misses opportunity. This pizza place goes about it’s business, and does a small bit of local marketing, and that is it. Growth flattens, or declines over time. Like many local businesses, missing opportunity is the culprit.

Let’s take this same pizza place, and replace the owner with an opportunity specialist. The first thing the new owner does is hand out surveys to all customers who come in. The new owner also mails out surveys to surrounding areas. These surveys contain questions about the pizza place as well as restaurant preferences. Slyly included in this survey is a personal info section. Name, email, address, and the best part, birthday. In exchange for filling out the survey, the business owner gives away a free meal up to $10.00.

Hidden Marketing Assets

Let’s say 500 existing customers and 500 completely new people fill out this survey. The business owner logs a net cash outlay of $1,000 * cost of food up to $10 = $10,000. The real cost of food to the owner is wholesale. So we cut the cost in half and say $5. For the survey redemptions, the business owner outlays $5,000.

The average person turns their nose up in the air and claims this is a waste of money. But, the savvy business owner didn’t get to where he is by being average. Hidden in this survey is gold. Let’s review.

The savvy business owner now has 1,000 names, email addresses, street addresses, and birthdays. With street addresses, the business owner can send direct mail postcards at will. These postcards highlight specials, coupons, or events at the pizza place. Kids eat free, free appetizers, couples night, the list goes on and on. The possibilities are endless. The best part of the surveys are birthday data. The business owner now has 1,000 birthdays. Which means once a year for 1,000 people, he can send a birthday special to his survey list. Free dessert, free appetizer, and other promos.

By utilizing the free offer, these birthday list members visit religiously once a year to redeem their “gift.” Ah, but here comes the magic - they end up spending, on average, $15.00 per birthday visit above and beyond the free gift. Let’s assume a 50% redemption rate on birthdays. So we have 500 customers coming in for sure once per year, spending $15. So we have an annual asset of $7,500 thanks to the simple process of capturing people’s birthdays.

Capitalizing on Unexpected Events

For the last case study, let’s talk about capitalizing on unplanned opportunities. I’m talking about weather and crowd locations. When certain weather conditions occur, a few smart marketers make a change to profit. When a large concert comes to town, a few smart marketers reposition their business for success.

Last weekend, a large concert named Lollapalooza came to town. Thousands of people flock to Chicago every year for this event. Now, many of the attendees are younger, so planning for inclement weather is not at the top of their minds. Many dressed in shorts and t-shirts. On the second day of the concert, rain poured down in the middle of the day through dinner. I did not see any stores promoting umbrellas. This baffled me, since this rain storm presented a gimme opportunity.

Walking home after work, I saw many young people with ponchos. Nothing fancy, but they got the job done. Were brick and mortar stores promoting ponchos? No, but a wise man walking around downtown saw opportunity where these stores did not. He carried a box of ponchos priced at $3.00. Now pause for a moment: thousands of people getting rained on with no umbrellas in a storm. They walk past a man who can solve their problem for $3.00. Customers pass him since he positioned himself near the entrance of the event. Remember, opportunity is everywhere.

At this same concert, other businesses adjusted strategy. Food trucks repositioned to serve customers going to the concert. How much new business did food trucks pick up by changing position during the concert? What about opportunity seekers selling water bottles near the entrance of the concert? They knew where their customers would be and they adjusted.

No matter what business you are in, learning to spot opportunity is profitable. It is important that you look for alternative ways to capitalize. Dan Kennedy said it best, "The deadliest words to say are, this won't work for my business." No matter what kind of business you have, always keep your eyes open. The profit opportunity you miss may be your own.