Free Prize Inside (2004) provides practical answers to one of the most pressing questions facing marketers, entrepreneurs, and business owners today: In a world where people no longer pay attention to traditional advertising, how can you stand out from the crowd and reach your audience? Seth Godin shows that by tapping into the power of small-scale innovations, you can make your product, service, or company so remarkable, it will generate enough buzz to break through the noise of modern life.
Imagine you’re running a company that’s run into trouble. Your profits are stagnant, and your product is yesterday’s news. How do you turn things around?
Traditionally, you’d take one of two approaches. The first is to launch a major advertising campaign. Back in the twentieth century, this was enough to draw attention to your product. If people were ignoring your product on the store shelves, you could force them to pay attention to it through magazine ads or television commercials.
But in the twenty-first century, advertising has lost its power. There are so many ads and other forms of media vying for attention that they end up blending together like white noise. Most people just tune it out.
The key message here is: Expensive advertising campaigns and big innovations are no longer a ticket to success.
So what’s the alternative? That brings us to the second traditional approach, which is to try to come up with a big, game-changing innovation. The economic rationale here is simple. If you create a desirable product or service that no other company is currently capable of making or delivering, you can get away with charging a premium price for it. After all, you won’t have any pesky competition to worry about – at least until your rivals catch up to you. In the meantime, you’ll be raking in the cash all by yourself.
To corner a market and obtain high profit margins, many companies pour money into massive technology projects, product roll-outs, or research and development programs. The bigger the innovation, the bigger the potential pay-off, or so the thinking goes. Just imagine the money you could make if you created the next iPod of your industry! But there’s a flip side to this line of thinking: big innovations require big investments – and big investments lead to big gambles, which often go bust.
Back in the late 1990s, a telecommunications company called Iridium learned this lesson the hard way. They spent $3 billion on launching 66 communication satellites into orbit. It was a risky bet – and it didn’t pay off. The company went bankrupt.
Here’s the problem: if you’re spending $3 billion on getting your product or service off the ground, you need to make $3 billion just to break even. The more you spend on big innovations, the more you raise your threshold for success, and the more you open yourself up to failure.
Okay, so what’s the real alternative? You’ll find out the answer to that question in the next blink.