Wednesday, December 26, 2007

You cannot do it!

Seth Godin wrote on his blog about the benefits of exclusion when you are a business or organization. You can read it below. But first, think about how you can be more exclusive.

For nearly 5 years, I have worked for a company that grew from 5 radio stations to 6 radio stations. More is better! Wrong. Unless you are able to handle the "more", it may be better to be less. We did it and it has paid off. The last effort we made to be successful with 6 radio stations was to have a separate sales staff of 3 to 5 for each station. That's 18 to 30 sales people on the streets, generating revenue. Should have worked except the overhead was too much and the 80/20 rule kicked in. Except it was more like the 90/10 rule. Also there simply are not enough quality sales people in our community to support the size of staff we were trying to assemble. Many managers came and went and discovered this.

The 80/20 theory is that 80% of your revenue is produced by 20% of your efforts, or sales staff, and we could figure out which 80% to reduce we would be more cost efficient. We had 3 or 4 people bringing in the money to run the entire organization. Last year we reduced our stations to 3. This year we slashed the sales force from around 15 down to 5. And the results have been tremendous. It is easy to look at sales performance and determine who is producing. We will add one more person about every 6 months, IF we can find the right person.

Now each individual person cannot be all things to all people. You have a limited number of hours in a week (168). The key is to determine which area you want to be exclusive in and who you want to exclude. Then stick to it. You CAN do it! Now here's Seth:


When I was in college, the Dean tried to put together an advisory group of students. Nobody he invited joined--it wasn't worth the time. Then he named it, "The Group of 100" and in just a few days, it was filled. The easiest way to have insiders is to have outsiders.

Credit card companies have made billions by selling a card that others can't get.

Politicians stand up and talk about their (exclusive) religion, or pit one special interest group against another.

And of course, the best nightclubs have the biggest velvet ropes and the pickiest doormen.

Limiting the supply of your service, or the quantity of your product, or being aggressive in who you sell to (and who you don't) are all time-tested ways to build a killer brand. Humans like being insiders, and will work hard to create their own imaginary demarcations to demonstrate that they've made it inside.

Populism is almost always a hard sell, it seems.

When Tiffany's lowered prices and quality and tried to reach out to the masses, they almost went bankrupt.

The Net seems to be turning some of this upside down. Twitter and Yahoo mail and eBay are completely populist. Hotornot, flickr and other websites have embraced this idea as well. (Worth noting that gmail started as a totally insider service, with a limited number of invites, shared person to person).

It's interesting to take a second to look at wikipedia. It started with the most populist, inclusionary point of view of all, but over time, people being people, a hierarchy and inner circle has been created. The exclusion is based on effort and skill, not race or income, but it's still exclusionary. And at its best, it makes the site work. When it fails, it limits discussion, reinforces small thinking and enrages the outsiders.

The first thing I'd ask myself before launching a product, a service, or a candidate is, "who are we leaving out?" If the answer is no one, be prepared for uncharted waters. The future of marketing (at least the big successes) is going to be fueled by those with the guts to embrace the masses. The profits, at least in the short run, may well be found by those that embrace exclusion.

One last thing: while people are delighted to be included (and seem to enjoy excluding others), the benefits they feel are dwarfed by the anger and disappointment of those excluded. It's something that people remember for their entire lives.

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