The hidden side of the holiday industry

The boys dress up as vampires; the girls dress up as princesses. The older siblings walk them around the neighborhood, and the adults hand out sweets at their doorsteps. This seemingly rigid, family-rooted structure, give or take pumpkin carving, has long been a staple of American childhood, but has been somewhat corroded by commercialization in the past few years. The October 31 industry, according to Selling Halloween magazine, is nearing five billion dollars in contribution to the national economy.

Now hold on there, a Selling Halloween magazine? Yes, there is an entire magazine dedicated to this very seasonal business. Granted, it does come out only about once a year, but their 21-year history only proves the stability of this very temporary field. Another standing testimony to the money-making abilities of Halloween is the Halloween Industry Association with its 5 day-long international Halloween show right next to Manhattan's Madison Square in December.

To me, this looks like a sign that there are some opportunities to take in the holiday market. The HIA and Selling Halloween are live examples of seasonal B2B, a space that might hold some potential work. Furthermore, there is a number of trends in our society that I could identify into which the 10/31 industry yet has to reach.

Does not doing homework sound like a good idea?

Ideas can be pretty amazing tools. At certain points in time, great ideas laid down the foundation for great inventions, remarkable commercials, masterpiece paintings, and every single book at your local library. Does that mean that every idea is good enough to seed your next victory? Maybe not. In fact, all the novels lying in publishers' slush piles without use, and all those projects that send well-established corporations into the red, also have the ideas of well-meaning individuals behind them. Nevertheless, the mere possibility of failure should never discourage you, especially considering that market research can significantly lower a project's riskiness.

So what is research? On the easy end, it can come down to a simple Google search for the information you need. On the other extreme, you might need to spend hours in a lab, hire test subjects, or conduct a survey at a mall. Take our word on it - there are many ways to go about researching and testing a business idea, and it is therefore important to know about the attributes of effective market research for a successful venture.

The main goal of it all

Setting the right goals is paramount to a useful outcome. These do not have to be too detailed if your project is just at its beginnings, but specificity helps get the project started on the rightest foot possible.

Here are some example questions for an entrepreneur researching his idea of a new vegetarian restaurant in St. Paul, Minnesota:

"Do humans enjoy vegetarian food?"

"How much money do people in St. Paul, Minnesota, spend on eating out every week?"

"How many St. Paul residents adhere to a strict vegan diet?"

This short list of things allows the entrepreneur to arrive at the ultimate goal of his research, and that is whether the market for vegetarian dining in St. Paul is big enough to support a new restaurant. Once he is able to answer this question, he will know for sure if his idea of a vegetarian diner is viable.

Beware of the confirmation bias monster

The same way the parent of a human would tend to see his child's accomplishments as signs of genius and dismiss his child's flaws as unimportant, the parent of an idea is predisposed to view his project favorably. So, idea parent, beware: The confirmation bias is out to get you. Ways to combat it include hiring an independent party to conduct the research, blinding all parties so that no participant in research is aware if its ultimate purpose, or just constantly reminding the ultimate aim of market research to yourself.

Questionnaires

Surveys are relatively simple to arrange. Thus, if you decide that this is the tool of your choice, it's important to keep some survey questions open-ended to allow for unpredicted responses. Other things to keep in mind are the various biases that can arise from question wording and from the order in which questions are asked.

Focus Groups

Focus groups can serve as a source of rich material, but are difficult and costly arrangements that require skilled moderators. Before setting one up, consider the following ways that these groups can go wrong: participants influence each others' reactions, and no response is genuine; the moderator intimidates the group into his way of thinking, or the participants do not take their job seriously. These pitfalls see a variety of researchers break their informational legs, including large corporations like Apple.

Market research is a fundamental task that goes into new product development and management. Ideas generation, another major task in the new product offering field, will be the next topic for discussion on the NVSBS blog.

SEO vs. AdWords: The winner is not that obvious.

We’ve heard it on numerous occasions; we know it well: a space on the first page of a popular Google search is the Christmas gift of choice for 99.8% of corporate websites. The other 0.2% already happily appears among the top ten, and is not very willing to move down. If you are the owner of a website that wants to be in the top ten for its keywords, your options come down to search engine optimization and AdWords. While both of them have the potential to let your web page reach its goal search engine position, there are distinct differences between them that lead some people to be “SEOers” and others to be “AdWorders.”

To many, the benefits of SEO are rather obvious. However, investment in search engine optimization is yet to become wide-spread:

• Better brand credibility. While SEO makes it possible for the website owner to deliberately get on the first search page, customers still perceive “natural” page promotion as more trustworthy than sponsored links.
• Offline services. It is slightly more importat to avoid pay-per-click in the first place if your customer will at one point or another interact with your firm outside of the Internet, be it a straightforward phone conversation or a full-fledged visit to your office.
• Long-run cost effectiveness. Once SEO gets your page onto the top, maintenance costs are practically absent. In the long term, investing in SEO brings enormous return on investment and thus makes a lot of sense.

On the other hand, some say that AdWords contradicts the nature of search engine marketing. They thus ignore pay-per-click as an option in the first place, to which I say that AdWords are not all that straightforward:

• Instant results. With a paid advertisement, you can generate immediate traffic to your webpage. AdWords is a relatively simple technology, the biggest prerequisite of which is your willingness to pay per visitor’s click.
• Ease. Showing up among the first ten for competitive keywords is a lot easier with a pay-per-click campaign than through search engine optimization. Again, one should only be willing to make a monetary investment into the program.
• No search algorithm changes. With pay-per-click, the need to spend time keeping up with changes in Google’s search algorithm evaporates because Google administers AdWords itself.
• Online services. Promoted searched are generally more appropriate for online services that do not require the customer to interact with your company anywhere outside the net.
• Only monetary investment. Finally, unlike SEO, AdWords does not require you to hire a specialist or study any literature. Like I mentioned, its technology is rather simple and anyone familiar with the Internet should be able to conquer it. Furthermore, by choosing to learn SEO, you give up the time that would have otherwise gone into improving the quality of your firm’s offerings, or making follow-up calls. Opportunity costs are looming.

It’s up to you whether you choose the one, the other, or both. Your choice should largely depend on the nature of your business. However, internet marketing is also a matter of personal choice that reflects your professional personality.

Check back for a fresh update on Thursday. Comment, subscribe, and have a remarkable week.

The results are in!

We are very proud to announce that the first NVSBS Weekend Business Challenge is officially over! Give yourselves some applause, because everybody who participated (even if they didn’t send in anything) should be proud. We thank you for being with us to witness the Weekend Business Challenge’s first step.

This week’s topic was the Pareto principle, or the idea that an average endeavor gets eighty percent of its results from only one-fifth of the time and money investment that it receives. This 80-20 rule concept is fairly simple. However, we asked you to think of additional applications for it, and think you did.

Advertising channels: the long but necessary list

Today, we have a fun list of the different channels that you may want to consider when brainstorming for your marketing campaign. The honest truth about idea generation is that, despite your elaborate knowledge of all your choices, your proficiency may evaporate under pressure. Consequently, we encourage you to come back to this list whenever you experience marketers’ block.

1. Magazines
2. Educational webinars
3. Newspapers
4. Direct mail
5. Brochures and flyers
6. Company website
7. Directories
8. Philanthropic activities
9. Newsletters
10. Community service programs

What is the 80/20 rule? The Weekend Business Challenge.

The Pareto principle, also called the eighty-twenty rule, is a movement of management thought that has been in development since the 1900s. The gist of the principle is simply that, in general, 80% of your sales income comes from 20% of your clients. This idea can be further expanded into the notion of a general effort-result distribution. That means that no matter how much one works, only about one-fifth of one's efforts go into generating the most of the results he sees. The rest of the energy, unfortunately, goes into less productive endeavors.

The principle has been widely applied to sales management as well as marketing, but that doesn't mean that you cannot get creative and see use of it anywhere else. After all, as an entrepreneur, your task is to find new applications for existing resources. So go ahead; think about 80/20; we are rooting for you. All the while, today's post is going to be fairly short. Instead of giving away all the secrets at once, we are giving extra credit to all of you who participate. Do some research, ask your coworkers, or just think about the information that we have given you already.

Leave a comment with your thoughts about the implications of the Pareto principle and how it applies to your professional life. Do you think it works? Which part of your workday do you think is affected by this rule? Then we will recap the challenge and write down our own thoughts about the 80/20 rule on Thursday, October 21, 2010.The best responses that we get from the participants will be featured in the post on that Thursday.

Keep in mind: your input doesn't have to be a Nobel-prize winning work. All we want is help you start applying theory to the work that you (yes; you!) are striving to accomplish these days. Here are some resources to get yourself started:

• Basic Pareto's Principle on About.com lays down some theory
• An intriguing explanation uses animation as a graphic example for the rule.

We are looking forward to your participation! Even though this challenge will run for a week, we will still run on schedule, so check back for a new article this Sunday. We believe in you!

The evening after: gain your customers' respect when they least expect it

If you have just found yourself a client and have gone through a successful deal with him, accept our congratulations. You have gone through the hard part of it all and made the deal happen. Now, all that is left is the easiest part of it all - and yet somehow the majority of ventures do not reach their full potential simply because they did not have an effective follow-up system. Psychological studies have shown that out of the four customer's experience combinations that are possible after the customer has done business with you twice, the best possible outcome for the customer relationship is when, initially, the customer is not completely satisfied, and, afterwards, his concerns get addressed to turn his second experience into a remarkable one. This is only made possible through thorough and effective follow-up system. Easily done, but somehow so often forgotten.

Looking out for rivals

Unless you are the Egyptian Pyramids, your business has rivals. While they can make our lives more painful than it is often necessary, they are not always such a bad thing. Opponents are a great tool for motivation and improvement. If your customers have no substitute for your service, why would you bother to improve? Additionally, rivals can become your assets even more literally, that is, when you work with them on the same goals that you otherwise be working to achieve on the opposite sides of the same river. Now, in order to help you get to the place of your dreams, your rivals need a small assessment.

Mitigate your weaknesses

Experienced entrepreneurs know: Their role is to organize incoherent resources into usable, marketable substances. Seeing opportunities and being able to pursue them before they slip away is the ultimate skill that a businessperson should know. On the other hand, the knowledge of production, accounting, finance, advertising, logistics, or any other science with which you may or may not be familiar could sometimes be useful, but by no means absolutely necessary for a profitable venture. In fact, and I am reiterating an earlier thought in this article, as an entrepreneur, you are to find and capture the needed resources, not attempt to be the sole human resource in your company. Building a team of experts in a collection of fields is a major task that you have to go through. However, once you get the hang of recruitment, human resources will be your biggest asset that will complement your other expertise and tools.