Wednesday, July 30, 2014

The Art of Diplomacy



This is a guest blog post by Mike Webb of Alliance Game Distributors, about the game Diplomacy and how it relates to business. This is part of a series of Kickstarter sponsored posts that are helping us expand our store. If you're a local Diplomacy fan, you should check out the August Double Con hosted by the Bay Area Diplomacy Association on August 23rd.


Everything I Really Needed to Know About Business I Learned From Gaming

Hi. I’m not Gary Ray, but I play him on the internet. My name is Mike Webb, and I am Vice President of Marketing and Data Services at Alliance Game Distributors and in charge of the publication of Game Trade Magazine.

I have been a gamer since the late 70’s, and although I have had the pleasure of working in the hobby game industry professionally for the last 17 plus years. Before that I was a regional manager for a print shop and computer services chain in Tennessee, and before that I managed hotels. Gaming has informed many of my professional choices and my management style. 

In fact, 3 games in particular have made a major impact on me professionally even outside the game biz – Diplomacy, Risk, and Dungeons & Dragons. Diplomacy in particular was important in forming job related skill, as it taught me very basic principles that apply in business as well as in international relations.

How to Work With Others to Build Consensus

Okay, Diplomacy is a classic, but it is not everyone’s favorite because it is not a test of who is the best strategist in a vacuum. No, it is a test of who is the best at building consensus and offering others something they want and need while furthering your own cause as well. You simply cannot win without the help of others, so you learn early to build common cause with your competitors in order to rely on their aid in certain situations. 

This manifests in business a number of ways. Game retailers operating in the same market with the same product selection may seem to only be competitors in one sense, but they are in fact engaged together in the marketing of games as an entertainment alternative against purveyors of other entertainment products and services. Retailers in the same area can work together to create compelling and good-natured league play and competitive events, bringing in a larger pool of resources for them to compete for. It can be a win/win. 

When I work with a competitor toward a common goal, I also create goodwill that is visible to the community. Recently, a retailer in the Northeast did not receive product for a major prerelease event. Other retailers in the area – all of whom were technically competing for the same dollars – pooled together extra product they had and sent it to that store so they could also run the event. The community was happy to see such common ground among the stores, and I credit actions like this one with the strength of the gaming community in that area.

Obviously, this cooperation cannot cross the line into collusion – some areas of cooperation are off limits. But working together to build community, to build (friendly) rivalries and to help each other so you both get ahead? That is a winning strategy in business.

Richard Sharp famously wrote in The Game of Diplomacy, “The events on the board can be exciting enough at the time; but it is away from the board, during the fifteen minutes or so of negotiating time, that the game is decided. “ This is true in business as well as the game.

How to be a Gracious Loser (and Come Back to the Table to Play Again with a New Strategy)

We hear a lot in the business and in life about someone being a Sore Loser – and no doubt you have seen your share in life. These are people who can suck the fun out of any activity. They are often the most competitive, and certainly some good can come from focusing so much energy on new and innovative strategies. But in the end, a Sore Loser blames things outside of his or her control for the failure of the plan – and in so doing often make other wish they had not played together. This is especially true in Diplomacy, where loss is just part of the game and where despite it seeming like someone is your ally, they are playing first for themselves. 

Again, quoting Richard Sharp’s excellent book (and much like Go Rin No Sho and Art of War, one that belongs on every business bookshelf if you ask me) – “Few players will actually say in as many words, ‘You -let me down in our last game, so I’m out to get you this time.’ But it’s a common enough attitude. It seems to me to indicate a fundamental immaturity of outlook; good players treat each game as a new beginning, and though they will remember previous accidents and not be caught napping again, they will not bear grudges.

You see, those were the rules to begin with – we sat down to play a game, and in the end I am first and foremost trying to win. Don’t be surprised by that as the game comes to an end. We may both want to push the Austrian player out of Burgandy, and so we may work together on that. But in the end, I am trying to win and so are you. While I maintain that we can have great cooperation among stores (or hotels, or whatever business sector you may be in), we need to recognize individual goals are out there as well. Don’t take it personally if someone outplays you – in fact take it as a reason to sharpen your own skill set and to come back to play again. No one wants to play with a Sore Loser – but if I can lose and compliment you on your play while adapting my strategy to the new reality? Then I stand to win as well. And chances are you will come back to the table to play with me again.

How to be a Gracious Winner

This is the flipside of the above, but it bears mentioning. In far too many businesses I see local or regional competitors – people who have so much in common that they could be working towards – getting caught up in unprofitable competition. Winning becomes everything, and so often winning is not defined as anything other than crushing the enemy. Profitability is secondary to “winning”. Sustainability is secondary. Creating new customer base is secondary. And so often the winner can become so insufferably smug, that people outside the game walk away from the table. Customers see the vicious competition between two stores or two manufacturers and decide they would rather take their money a completely different direction.

Be as gracious in victory as you are in defeat. Congratulate others in the game on their good play. Adapt their strategies that worked, and tell them that you found those compelling. Give credit where it is due, and don’t pat yourself on the back too hard.  Which brings us to:

The Arrogant Points-Leader Gives His Competitors Common Cause – and a Big Target

Invariably in any group that plays Diplomacy, you will find that one player who thinks they cracked the code on the strategy. Big heads and bigger words follow – and suddenly that player finds people unwilling to work towards common goals – even when those goals visibly benefit both players. This happens all too often in business. And is a big reason why working with others in your play space towards common goals and consensus are so very powerful. Make your business one that the competitors know and respect by being someone they can work with. 

In short, remember Wheaton’s Law.

Good luck, and above all Enjoy the Game!


Mike Webb
VP of Marketing and Data Services
Alliance Game Distributors
mew@alliance-games.com

Thursday, July 24, 2014

Three Types of Projects (Tradecraft)

There are three types of construction projects as I see it, related pretty closely to the three types of game stores out there. You can classify them as backyard, low budget, and professional.

Backyard construction and game stores are about flying under the radar. Construction is usually DIY. It's best suited for sheds in your back yards, hopefully not inhabited by tenants or your boomerang kids. Perhaps a chicken coop. It's nothing you wouldn't mind seeing torn down if you had your wrist slapped.

Game stores of this type tend to have month to month leases, no capitalization, and plans to undercut their competition and make it up in volume. There is no business plan and employees are paid in peanut butter sandwiches and Magic singles. They open when they feel like it, order inventory when there's money left after rent, and have no business terms to speak of, paying most things in COD. Most last about 18 months.

Low budget is the middle ground. It's going half way. In my construction example, I had a contractor suggest we get "someone" draw up some quick plans and tell the city we were using our mezzanine for storage to avoid all the zoning issues of having people, combustible and trampleable, using the space. It would be built with permits, but not for its intended purpose. Shady.

I think most game stores fit into low budget, a kind of backyard endeavor with fumbling around, attempting to bring their business "up to code." Low budget businesses shy away from the hard choices, like proper POS systems, professional grade fixtures and clean bathrooms. Low budget stores attempt to attract their core customer base at the expense of the general public, who can't tolerate the low budget store. Most game stores with event space are using their retail zoned business for this assembly area. It's just how it's done. It's questionable.

I stand up for game stores, in general, but this model does seem to be the norm. The reason is capitalization. To start with anything less than a luxury car budget is to spend years scrimping and burning the candle at both ends in hopes of making it. It's hard to justify a $7,000 POS system when you've been subsisting on ramen for the last two years. My brain would have re-wired itself for survival in half that time. Likewise, the low budget construction plan was the only model that made fiscal sense for us when we looked at expanding, although that wasn't enough reason to do it.

Professional grade construction projects are playing by all the rules, hiring architects, working truthfully with the city and your property management company, and generally spending money that only multi million dollar businesses can afford. This is what we're doing with our expansion, but only because of our extra Kickstarter money. Otherwise we wouldn't have done it at all, as even the low budget model is too shady for a profitable business.

Professional game stores exist in the top 10% of stores in the country. They're based on a business plan, are usually highly diversified, and tend towards mainstream retail in their equipment and procedures. These stores have more in common with a typical retail mall store than a backyard game store. It takes a lot of capital, and as I've mentioned many times, that type of investment is not very wise. It's a combination of someone driven by passion with the desire to run a top notch business.




Tuesday, July 22, 2014

The Underdog (Tradecraft)

The First Law of Marketing is the Law of Leadership. Once you're the leader in a mature market, you take the majority market share and find yourself in an unassailable position. Your competitors fight over the fragments of what's left, leaving you sitting pretty at the top. Opportunities come to you.

Market share leadership includes such companies as Microsoft (Windows), Apple (mobile music devices) and Facebook. Your position is safe enough that you can experiment and break your model on occasion, provided you come back to it later. You have permission to make mistakes, whereas your competitors don't. It strengthens your position as you innovate.

That's the traditional marketing theory anyway. What would happen if Windows went open source? If Facebook opened up their code so anyone could make a mini Facebook walled garden? What if the iPod was a software platform and not hardware dependent? What if anyone could make a version of Dungeons & Dragons? What if one of those iterations was better than the original?

That's where we stand right now with Dungeons & Dragons 5th Edition. Pathfinder owns the market, and worse for Wizards of the Coast, has co-opted the brand. Dungeons & Dragons equals Pathfinder in the mind of the consumers that matter, the alpha customers. In this unfathomable situation, you have two options. For a smaller company, they would be looking at option one, law 10 of marketing, the Law of Division.

The Law of Division stipulates that a mature market will eventually divide. Can't beat Coke? How about energy drinks? How about flavored juices? Water? Can't win at shoes? How about running shoes? How about hiking boots? How about stupid spring shoes? Can't win at role-playing games? How about the entry role-playing game? How about the advanced role-playing game?

This is not a very good Wizards of the Coast strategy for role playing games, as the RPG market is already too fragmented, too divided. It's almost like everyone has one of those soda making machines at home and no longer needs to buy Coke. There are enough role playing games available right now that I sometimes wonder if they exceed the number of interested players. A quick look at the Ennie nominees this year reveals that some key categories have 60% of the products available direct only or through Kickstarter. I expect that to continue and deepen. No corporation can survive on the scraps of the RPG world. The Law of Division is an opportunity if you're a bathrobe publisher, but not a viable strategy for a 7 billion dollar corporation.

Instead, Wizards of the Coast and Dungeons & Dragons must put the genie back in the bottle. They must press the undo button on their open source blunder. The blunder really, was not following through accepting the genie was out, but that's another story. What WOTC must do is take back their position as market leader. Here's the thing, according to the marketing laws, it can't be done. However, since they shouldn't have been able to lose their position in the first place, the rules have changed. Perhaps there is hope. Perhaps the new rules allow genies to go back in bottles. Perhaps they can create a magic funnel.

How do you do that? You don't brute force this. You don't step in as the 500 pound gorilla, of which they are, and assert your dominance. You can do this if you don't believe what I'm saying. If you don't believe in the rules of marketing, then by all means, say you were on a break. Launch your game with a massive, traditional marketing campaign. But what if you're wrong? If you're wrong, you fail spectacularly. You fail so badly people remember your name and study you in business school.

Oh no, you must play the underdog. You work it subtle. You work harder. You take careful steps and put all your energy behind smart strategies. If you're big and trying to play the underdog, you can accomplish even more. If genies go back in bottles, it's this way. It's a slow coaxing.

Everyone loves the underdog. Americans especially love underdogs and Dungeons & Dragons is quintessentially American. Go read Guy Kawasaki's, How to Drive Your Competition Crazy and you'll learn underdog strategy. It works for game stores and it definitely will work for a multi billion dollar corporation. You cannot be a 500 pound gorilla beating up on the little guy. People will hate you on principle. So you position yourself as the underdog. You set your sights on bigger competitors to show you're just the little guy, the plucky underdog. You slowly peel that Dungeons & Dragons brand label off your competitors product while everyone admires your pluck. You carefully put it on your bottle.

This leads to what I think is the brilliant yet predictable Dungeons & Dragons 5th Edition roll out approach. It's subtle, underdog marketing strategy. It's such an underdog, it's so grass roots, it lacks even a name. Is it D&D Next? 5.0? 5th Edition? Nope. Just D&D. It's the Just D&D Edition. It's the promise of a clean edition without splat books, without adventures written in house by monkeys. It's the promise of a slow roll out of core only product while embracing the Internet age with free online content. No need for bombastic self promotion. We're the little guy, the underdog. Come check us out.

It has to work. It's the only viable strategy for a 500 pound gorilla.

Friday, July 18, 2014

Selling Pathfinder (and similar systems) (Tradecraft)

Another Game Store Rescue Blog Post topic is How To Effectively Sell Pathfinder. I have written about this pretty extensively already, and I've even given a talk at the Gama Trade Show, but I've got more observations to make about how to successfully carry this line.  (begin gloat) By the way, I was totally right about this stuff in 2011. (end gloat)

There are two key factors in selling Pathfinder. The first is pretty obvious, it's community. You can't sell a line if you don't have a customer base asking for it. Perhaps you don't really do RPGs, or perhaps you embraced Dungeons & Dragons really hard, instead of Pathfinder. In that second case, you're probably going to be embracing D&D Next and all its third party accessories in the coming months and you probably aren't too concerned about this topic. 

Developing that Pathfinder community, running Pathfinder Society organized play, and being an impartial "arms dealer" of role playing games is key to getting customers to engage in the Pathfinder system. If your customer and staff don't care, then move on to the next thing. I'll also mention I believe in a Pathfinder 2.0. I have no proof or inside knowledge of such a thing, but I think it's coming and the Pathfinder Unchained announcement for April 2015 is about playing around with the idea. 

The second factor is top of mind awareness. This has become painfully apparent lately and also applies to Games Workshop and their flagship game, Warhammer 40K. When the publisher competes with retailers, you must compete right back at an equal level. GW has been actively trying to siphon customers from their "partner" stores onto their website for direct sales. It's no longer a question of whether but how much they do this. They do it with new product offerings, along with pulling back product from brick and mortar retailers. I'll explain why this works for Paizo while it's problematic with GW.

Paizo has very few Pathfinder products that are either exclusive or limited, although the most obvious elephant in the room is the PDF of all their print products. However, as we now know about PDF products, they are different iterations of products, rather than replacements. You want one or the other and occasionally both, but they are different value propositions for the customer, used in different ways. Paizo also has a very good online store extremely focused on making the Pathfinder RPG experience the best it can be, chock full of accessories many of which, I jealously note, they exclusively sell. This is your competition.

When I sell Pathfinder, the Paizo store is in my competitive sights. It's not the guy down the street or Amazon, it's Paizo itself. I'll also admit I'm a bit jealous of Paizo as the company is about as perfect an expression of what they do as I can imagine. I'm a Paizo apologist, if you haven't noticed. I know their history and how they came about in their current form. The online store, the subscription model, and the direct competition against D&D with their "own" system was a desperate and brilliant attempt to save a business after Wizards of the Coast cut them off at the knees. It's a fascinating business case. 

When I say compete right back, what I mean is you must carry the full line. You do this because of what's known as top of mind awareness marketing. When a customer thinks of buying a Pathfinder product, they must think of you, every time, even before they think of Paizo. That means you must stock the full line, and with popular products, which really only include hardcovers and a few accessories, you should stock deep and never be out of stock.

If you don't have top of mind awareness, you begin to lose the whole pie. In other words, Paizo will have top of mind awareness and they'll get the bulk of your sales, since they're a one stop shop. Paizo, by the way, is very happy with you competing in this fashion, since it does seem to grow their overall pie quite nicely. Also, here's the key, by Paizo not carrying exclusives (PDFs excluded), they foster this local top of mind strategy. 

Games Workshop, however, undermines top of mind for local stores. They do this through exclusive products you can only buy direct. They do it by limiting trade product availability while still selling it on their website. They do it by driving pre-orders to their website to grab early sales. They do it by offering discounts and sales with online purchases. You can try to implement Top of Mind with Games Workshop, and I did it for years successfully, even carrying Forge World and direct items, but when a company undermines your attempts through bypassing your sales channel, there's not much you can do. Many stores are starting to drop them right now, at least until their current management team realizes their blunder or they're gone (I give it a 50/50 chance of either).

The down side to this Top of Mind, full line strategy is it's brittle. It's brittle in that it ignores performance metrics in exchange for higher gross sales. You must accept your one turn books or models in order to get your 50 turn core rulebook or starter set. You can't afford to do this with every game, so you need to pick your winner in each category to try this out. Just make sure the publisher isn't undermining this effort by competing unfairly. As a side note, when I describe this to other people in the business world, they consider this the most underhanded bullshit they've ever heard.

When this strategy stops working, when the turns are just too low to justify the line any more (this has happened with D&D 4, Flames of War, 40K and quite a few RPG systems with me), the strategy simply breaks. The line loses what I refer to with my staff as "immunity," and the line quickly disappears in my store, either entirely or down to a "core" set of products (AKA, circling the drain). When you're competing against the publisher, core is not enough, so it's really a "zombie" game at that point, a place holder until something happens to change the situation.

Image borrowed from here (good article)

Wednesday, July 16, 2014

Overcoming Obstacles

One of our Kickstarter backer rewards was the Game Store Rescue Blog Post. Eleven people pledged at that level and this is the first post in that series. The topic: Overcoming Obstacles in Getting a Game Store Started.

The first thing I thought of was it takes a lot of character. Character. Hmm.  Here's a guide to overcoming obstacles in getting a game store started by looking at the attributes in your typical Dungeons & Dragons character (using the Pathfinder SRD).

Strength measures muscle and physical power. 

I started working out before the move to our new store. I was completely unprepared for the amount of labor required in my first store. I'm probably in better shape now than I was back then, ten years ago. Get in shape before you open your business.

The hours are likely long and the stress high, so try to continue working out after you open your store. Looking at the extremely high rate of overweight game store owners at trade shows, this might be considered revolutionary advice.

Starting a store is a physically demanding process. The hours are long. You've got fixtures to move or build, many boxes to move around, and construction to manage or engage in. In fact, if you have the time and ability, you can save a lot of money by doing much of this work yourself. If you don't have the stamina or the job is too big, bring in some muscle. That's how I got to know the employee who became my manager. He stayed on for another seven years.

Dexterity measures agility, reflexes, and balance. 


You must be nimble when starting a game store. You must maneuver your way around obstacles. What sorts of obstacles? With our Kickstarter funded construction project, building codes and government requirements were obstacles in need of dodging. Being dexterous means finding ways around problems rather than running headlong into them. 

With 90% of our customers male, we were able to argue for a break on the massive number of female restrooms required. When your police department thinks your opening a gambling den, demonstrate that you're about Dungeons & Dragons and games of skill, rather than poker and games of chance. When your landlord thinks you'll attract drug dealers and a parking lot full of bicycles, enlighten them that you're not running an 80's era video arcade, but a place where kids and their parents engage in thinking games. Kids nowadays burst into flame when touched by the sun, so don't worry about bicycles.


As for balance, emotional stability will be important during this time. Writing my business plan was a roller coaster of elation and depression. You don't plan for a small business with a tiny profit margin without swaying between success and failure many times. Thin margins means success will be elusive and keeping the faith will be critical. Customers and competitors will inform you of your impending failure. Balance.



Constitution represents your character's health and stamina. 




Stamina is about sticking with the plan and keeping to your commitment. Some new store owners open late, close early, miss days, and generally act like their hard earned business is a job they really don't want. If your work habits are bad now, how will they be when you don't have a boss? Stamina and discipline, slow and steady, wins this race. One realization I had after a while is a lot of our success is just outlasting our lazy competitors.

Also, to quote Scarface, "Don't get high on your own supply." Avoid those fizzy sugar drinks and candy and eat like a real person. Just because you sell snacks doesn't mean you should live off them. I had a really hard time with this early on. Take care of your health and you're also taking care of your business.



Intelligence determines how well your character learns and reasons. 



Intelligence is about learning through planning. Write a business plan, which should include financial analysis, competitor analysis, site surveys, marketing plans, your value proposition and much more. You cannot spend enough time on your business plan. It may become your novel, a thing you pull out of a drawer and work on occasionally. You may never get out of the planning stages. That's probably telling you something. It's not a bad thing.

With thorough research will come confidence in the plan. You will be able to stick to the plan, and when you're required to show dexterity, you dodge and weave within the context of the plan, rather than wild swings out into traffic. Your business plan is the context in which you operate your business and having one will save you a lot of time and money flailing about. Research everything now and it will be easier and cheaper than scrambling later.



Wisdom describes a character's willpower, common sense, awareness, and intuition.



Oh Wisdom. You've already gone against common sense in this endeavor, so does wisdom still play a role? Of course. With a solid plan in place (Intelligence), wisdom is about being shrewd and aware of what's going on. You are not working in a cubicle, you're on the front lines of humanity. There will be people who will try to take advantage of you. There will be opportunities that are only presented once. There will be a lot of penny wise, pound foolish situations that you'll need to reason out. 

Starting a business also means you need to understand what other people are looking for from you. Many just want your money or your goods, but what does the landlord really want? They want stability. Mine admitted they never thought I would last my lease, but I had a fat bank roll in the beginning, so what the hell. The city has a vision and a plan of their own, a family friendly, crime free view that I now represent, but didn't as an unknown entity. The police department doesn't want to be called every time you have a Yugioh tournament or someone breaks in to steal your Magic cards. 


Intuition is where you apply your business intelligence to project future success. Every time I order a product, and I order many thousands of dollars a week, I'm relying on business intelligence and intuition. What is my sense of the landscape? What are my feelings about the direction of my store, my customers, and a game system? How does that translate into commerce? Especially in the beginning, you will have no business intelligence, so you'll be working your psionic abilities hard to predict the future. Don't discount intuition. It's real.



Charisma measures a character's personality, personal magnetism, ability to lead, and appearance.



Guess what? You're in sales! Sure, sales will be about 10-15% of what you actually do in a day, but it all comes down to sales. Put everything else down. Talk to your customers and let your personality shine. Wear a clean shirt and shave every morning and put on deodorant. If you're not personable, fake it 'til you make it. 

Small talk is about listening and asking questions about other peoples interests. It's a large part of my job and now a large part of yours. You will inexplicably become a leader in your local community. You may resist it. Your business will become "Your Name Here's Store."


In the end, your success will come down to your charisma and your report with customers. Everything else can be forgiven. Your milk crate fixtures, your leaky toilet, your blinking overhead lights, and your pen and paper point-of-sale "system." All of that can be overcome if you just listen and be personable. If you can't do this, don't open your store. If you absolutely think you're an "operations guy," behind the scenes only, then small business is not for you. But if you can let your personality and passion shine, you'll be rewarded by your customers many times over. It's the secret of this job and why we keep doing it. It's just lovely.


Then go fix those other problems your customers overlooked.

Thursday, July 3, 2014

Kickstarter Lessons Learned

Since our Kickstarter funded, I've been asked to write magazine articles, speak on a blue ribbon panel (whatever that is), and talk about my experience on a podcast. I did the podcast, but the other opportunities were more about sharing my experiences so other small businesses could replicate our success. I don't believe we conventionally succeeded with our Kickstarter, so I'm not inclined to sing its praises and claim mastery.

What we did was fund raise, tapping friends and colleagues for money. About a third of our funding came from colleagues in the game trade. A lot of our funding came from calling in favors and begging for cash when it was clear the campaign wasn't working. Still, there are some take aways from this that I think will be helpful.

There have been thirteen game store Kickstarters, of which only three have reached their funding goal, including ours. The other two include The Raygun Lounge by Gamma Ray Games, and the more recent Endgame Cafe by Endgame in Oakland. What do these stores have in common?

First, they were established. They all had existing communities to draw upon and business track records showing they tended to do what they promised. Endgame has been around for 13 years and has a stellar reputation, Black Diamond Games (us)  has been around for 10 years and is generally well respected, and Raygun, the youngest, was at 3 years when they ran their campaign a couple years ago. I don't know much about them, but the cesspool that is Yelp gives them four out of five stars.

The other nine failed projects were primarily new stores. It's highly unlikely a new store will be able to tap any sort of local base to accomplish such a project. When we talk success, we're also talking in the $28,000-$48,000 range. That, friends, is actually not a lot of money for a construction project, and by all accounts, doesn't cover the full costs of any of these projects.

Second, all stores were to build a new space. Endgame is planning to build a cafe to host local events and provide food and coffee drinks. Raygun went from seating for sixteen people, really not a legitimate game space, to a much larger event space with food and a bar. Black Diamond Games plan to go from a respectable 64 seats to 121, with no addition of food or beverages.

Third, as was pointed out to me by Robert Pace, who tracks these campaigns, projects for food related projects tend to be more successful. That's also a principle of "third place theory" in which food and drink play a prominent role. If I were to do this over, I would study third place theory pretty extensively and make sure I was ticking off all the boxes.

My own observation is you need to offer a significant improvement over your current offerings. If you're happily playing in our 64 seat game center, you may not see the value in adding additional seating. You're getting value already. It's not a significant value add, and in fact, may be disruptive to the value you're already receiving. If you're going to do a Kickstarter to add space, add something more significant than more of the same; perhaps a soda fountain, coffee shop element or snack bar.

When we considered our Kickstarter campaign, we figured our target audience was based on the Pareto Principle, the 80/20 rule. Based on our research, 20% of our customers use our event space. Those people would care about this project. What we got instead was what I call the Altucher Rule, which is what happens when you get 20% of your 20%. That, as you can imagine, is a much smaller number (This rule is also used by Seth Godin as the core group of clients for whom you want to tailor your service).

Fourth, our rewards were weak and I would suggest putting them at the market value to attract the other base we were looking for, everyone else online who knew about us and wanted to help. Our custom PDF Pathfinder adventure was $25, which assumed you were contributing more than the value of the PDF to help the store, since the market value of such a thing is perhaps $10. That's great for fundraising, but how many more people would we have gotten if we had priced it at $10?  The costs of providing more PDFs would not have gone up. Could we have had a much wider draw, those who kinda wanted the adventure and were willing to help?  With only 18 backers at that level, my guess is yes.

So those are my four big take aways: Be established, offer a significant value add over what you currently have, consider concessions, and offer rewards at the market rate.

What else? As part of "be established," make sure you've exercised all your social media muscles. We are heavily reliant on Facbeook, with nearly 5,000 fans of our page along with 500 people on our direct email list. We aren't active on Twitter, online forums, nor any fan based mediums. I am very active with the game trade community, which is how we eventually succeeded.

Our problem with communication was our dependence on Facebook. Communication was very expensive, and I spent well over $1,000 on promoting campaign posts.  Worse, results were intangible. It was difficult to see who was sharing, what was being said, and if our message had any reach whatsoever. That's the walled garden of Facebook. It's an area in which we need to improve, and that's after spending tens of thousands of dollars investing in Facebook as our core marketing medium. Make sure your social media strategy is multi faceted.

Thanks again, especially if you were one of the 224 people who supported our project!



Saturday, June 28, 2014

Expensive (Tradecraft)

Expensive means you don't think it's a good value.

Perhaps you don't find its utility high enough to justify the price. Perhaps you can find it cheaper elsewhere.

Expensive does not mean it costs a lot of money. A high price tag has nothing to do with whether something is the value judgment known as expensive. A Bugatti Veyron Grand Sport for a million dollars is not expensive, it's a bargain at half the MSRP. Whether you value it or not is another issue.

Expensive also has nothing to do with whether you can personally afford something, although carrying a high priced item is something a retailer needs to take into account.

From a customer perspective, this "expensive" personal problem nonsense rubs me the wrong way. Too expensive compared to what? How are you measuring that value? From a retailer perspective, we, as a group, tend to avoid high priced items for fear of it being "too expensive."

This is reinforced by the price pressures put upon us by the Internet. My feeling is the higher the price, the more likely a customer will seek it cheaper online. There is a sliding scale in my mind. I see this continually at the low end, as we sell card sleeves to people who have never bought a Magic pack from us, or when I sell far more of a $30 expansion than I sold of the $99 parent game.  This, quite frankly, is soul crushing if you think about it too much.

We should, I think, have a broad range of prices for our broad range of customers, but man, the negative reinforcement is huge. High priced items try my patience, as I deal with customer astonishment. It's one more reason why we can't have nice things.

It's an especially good reason to market your store up market. There will be customers who are not happy shopping "The Gap" of games, which is what we've been called, who would prefer The Android's Dungeon. That's fine, there's a dungeon for them somewhere. You want the other customers. Plus most Dungeon customers will put up with that annoying smell of Pine Sol and smiling staff.  If there is a shrinking middle class, retailers may need to choose sides.