Infographic Of The Day: What's The Value Of A New Customer?
These handy-dandy equations give you a ballpark estimate of how much to spend on acquiring a new customer. But they don’t tell you how to spend that money — and that’s where things get interesting.
You know and I know that an MBA is a bullshit degree, but nonetheless, you can learn a few things in business school. You can also skip business school, and learn them via a very handy infographic. Take this one by Kiss Metrics, on the subject of calculating a customer’s lifetime value.
The basic idea is to take an average check, figure out how often the customer will come back, and how long the customer will continue to be one. But these can be crunched in slightly different ways that yield quite different results, as you see at the bottom:
Click to view larger
Obviously, this is a very loosey-goosey concept — hey, they teach this in B-school, so it has to be! — but the basic exercise is important in figuring out how much you should be spending to acquire each and every customer. But as the final part of the graphic lays out, not every customer is created equal — attracting someone that’s a relatively premium high-roller can make all the difference. And even more surprisingly, just increasing your customer satisfaction by 5% can increase profits by as much as 95%:
All of this is fascinating stuff, and it leads you down the path toward the complicated decisions that business managers wrangle with every day. How do you measure your marketing effectiveness? What forms of marketing are most reliable in bringing in new customers?
But you know what? I’m calling bullshit on this. The marketing arms of many companies are very often their most free-spending divisions. And they’re free-spending simply because of calculations like the one above. But let’s think about this: Just because the value of a customer over her entire lifetime is huge doesn’t actually imply that the best way to attract repeat customers is through marketing.
Is it really so ridiculous to think that a better way of attracting customers is to shave your marketing budget and pool all your money into making a better product? I can think of a few brands that do this quite well. One great example is Kiehl’s, the no-frills beauty products and grooming company. Another is the Five Guys burger chain, which is expanding across the country like Kudzu. Both of these companies barely do any marketing at all. But you know what? Both of their products are great, and that’s all the marketing they need. It’s really a shame that more companies in more industries don’t think like that.
source: Co.Design - Cliff Kuang
NEWS: Does Innovation Flow From Cities?
Does Innovation Flow From Cities?
By: Cliff Kuang
A fascinating infographic from the website Quirky maps the American states where inventions are flying thick and heavy.
Invention and innovation are huge enough subjects that you rarely get any sense of their grand organization—instead, you have to settle for telling bits and pieces, like a blind man palpating the proverbial elephant. But occasionally a bird’s-eye view arrives thanks to an unexpected source—in this case, Quirky, a site that gives inventors with little more than a sketch on a cocktail napkin a shot at realizing their ideas.
If you don’t know Quirky, a bit of explanation first. The company, which is currently the subject of a TV show on the Sundance Channel, takes submissions from anyone with an invention. These are then voted on by Quirky’s thousands of users, and eventually the best ideas go into production. All of which is to say, among the thousands of entries that Quirky receives, you get a little bit of a sense of what people are trying to invent—and by extension, the areas of daily life where people find problems every day:
The top-most chart is sort of a blur of information, so I’m going to focus on the bottom two, which actually tell you some pretty fascinating things. Let’s start with the last one. Innovations seem to be centered around electronics, kitchen, and organization. Not terribly surprising in a way, but it tells you that those are the places where people find the most room for improvement in their lives. Put another way, these are the avenues that are already filled with the most tools that we interact with on a daily basis—and we invent by improving what we encounter every day.
With that in mind, let’s move onto the map. Obviously, most of the ideas seem to be flowing from the big cities around the country: New York, L.A., San Francisco, Washington, etc. But adding up those figures, over half of Quirky’s submissions come from states with mega-cities.* Doing a quick back-of-the-envelope calculation, about half of America’s 300 million people live in those same states. In other words, the innovations seem to be flowing at a steady per capita rate; cities are not over-represented.
At long last, perhaps the nature of innovation is changing thanks to the Internet.
This is precisely the opposite of what most studies of innovation would tell you: That cities account for the lion’s share of inventions flowing from countries around the world. This is usually attributed to the fact that cities and their greater densities afford amplified possibilities for interaction and idea exchange—which leads to more innovation. (For two brilliant explorations of this idea, listen to this episode of Radiolab and this article from the New York Times Magazine.) But what makes a site like Quirky interesting is that everyone gets a shot. Just look at the craziest outlier on the map: Montana, one of the most sparsely populated states in the country, accounts for nearly 7% of all the submissions to Quirky.
Of course, the social scientists who praise cities as innovation engines are almost certainly right, in general: For one, the raw numbers of ideas being submitted is only a vague proxy for innovation activity. (The ideas coming from the hinterlands might simply be worse than the ideas coming from the cities, for example.) And the numbers I’ve crunched are undoubtedly crude, since they’re based on statewide figures.
But there is, nonetheless, anecdotal evidence that the nature of innovation is changing thanks to the Internet. Internet hype-men used to bleat about this idea in 2000, but it’s taken 10 years for it to happen, thanks to a uniquely 2011 business model such as Quirky’s.
*NY, CA, IL, TX, PA, AZ, TX, GA, VA, MA
Watch: A Clever Stop-Motion Video Tells The History Of Typography
Graphic design student Ben Barrett-Forrest couldn’t find any educational type videos he liked, so he took the matter into his own hands (very literally).
The history of typography began with a German man, named Johannes Gutenburg. Many people know this bit of trivia, but likely in the context of him as the inventor of the printing press. Less known, perhaps, is that Gutenburg is also the grandfather of printed type, first creating a type known as “blackletter” to spare monks from the laborious task of copying texts and documents by hand. This is where Ben Barrett-Forrest’s useful little video, The History of Typography, begins. From there, it traipses through the evolution of typography, stopping along the way to discuss the roots of Roman, Caslon, Baskerville, and eventually, the advent of sans serif fonts.
The introduction of sans serif fonts was a boon to business, especially the advertising industry, which needed taller, wider, and easier-to-read prints for posters and billboards. It was also a relief for Barrett-Forrest, who spent 140 hours cutting each letter from paper by hand (see the earlier reference of monks hand-lettering type for a dash of irony). “When I broke through the 18th century, and got to the time of advertising with their big, bold Egyptian serif, and then to the 20th century, I breathed a sigh of relief,” Barrett-Forrest tells Co.Design.
The self-proclaimed type nerd had never made a stop-motion video before, but after some dissatisfaction with other typography tutorials found online, decided to make one that felt enjoyable. And it works: the video has a School House Rock-like friendliness to it, and should be considered solid educational material for anyone on day one of a graphic design course.
[shared from Co.Design]
LOOK AT THIS: Co.Design
Co.Design has everything from interesting installations, infographics, new technology, and more. Fast Company’s design blog is a good mix of different design-y things and worth taking a look at when you have a few minutes to spare.
P.S. This is the first installment of LOOK AT THIS, where I’ll be sharing graphic design sites, resources, and tidbits I’d like to share. There are pleeeeenty of these, so suggestions are welcome but they may be repeats of ones I already have in mind :)