Chris McCann's Personal Blog

Life's too short to not do awesome things

Posts Tagged ‘psychology

The Principles of Distribution

with 6 comments

I have been studying distribution & reading over 30 books on distribution and I wanted to outline some broad principles I have learned which I am calling the “principles of distribution”.

The best three books on this topic of them all were three historical books:

 
All three of these guys, especially P.T. Barnum, were quite the characters and they were some of the early pioneers into what we now call marketing, advertising, PR, and the ever-so-fashionable distribution hacking.

Very broadly there were three principal methods these guys used to get distribution for new products.

The first is through gaining access to an already pre-existing widespread pool of customers. A good story of this is how Claude Hopkinks marketed Van Camp’s evaporated milk.

Back in the 1900’s evaporated milk was a completely standard product where: none of the existing products had an advantage over one another, a few brands controlled 90% of the market, that those brands held that share for many years against many competitive attempts.

Given those conditions Claude’s plan for getting distribution in this highly competitive evaporated milk market was this. In an advertisement he inserted a coupon good at any store for a 10 cent can of Van Camp’s evaporated milk. In return he paid the grocer his full retail price and for three weeks the advertisement he ran told the personal story of Van Camp’s evaporated milk with the coupon insert.

He sent copies of this advertisement to all of the grocers and told them that every one of their customers was to receive one of these coupons. It was at that point evident that they must have Van Camp’s evaporated milk on stock because every coupon meant a 10 cent sale and if they missed it (remember this is 1900’s money), it would go to a competitor.

The result was universal distribution at once. They first tested this plan in a few small cities and next rolled it out to New York City. In three weeks, in New York City, Van Camp’s evaporate milk achieved 97% distribution in groceries stories in the entire NYC area. Just through this campaign alone 1,460,000 homes were all trying Van Camp’s evaporated milk all in the same week.

The second is through making an offer so compelling, literally on the verge of being altruistic, that no one could refuse your offer. A good story of this is the 1900’s a coffee vendor who sold coffee by wagon in 500 cities who wanted to increase his sales.

His experiment was instead of trying to sell coffee to each person he would drop by each persons house with a half-pound of coffee and say, “Accept this package and try it. I’ll come back to you in a few days and see how you like it.” When he came back, he came with both a small gift and a if the person liked the coffee an order to charge the person 5 cents on each pound he delivered from that point forward.

Instead of trying to directly sell his coffee he offered a free sample, service, a gift, and found that such an offer was resistless. The result was 9 out of 10 trials leading to reoccurring sales.

The third is through creating a situation or stunt so outrageous that every media channel will want to write about what you are doing. A good story of this is how P.T. Barnum bought a old woman named Aunt Joice who was believed to be 160 years old and believed to be the nurse of George Washington (keep in mind this was in the 1830’s and its probably illegal to purchase somebody now, so please don’t try this).

She was bed stricken, blind, and couldn’t move much but she was really sociable and would talk for hours about her “dear little George”. Everyone who came to see her absolutely believed her age and she even came with a “bill of sale” detailing her life story with a guarantee on the claims and her age.

P.T. Barnum made on average $1,500 a week (~$30,000 in todays value) showing Aunt Joice off and using the press extensively to drive people to his showings across the country. He would invite journalists, doctors, and researchers to come study her and write their accounts and his exhibitions attracted tens of thousands of people in every city he visited.

When the novelty wore off and visitors started falling off he would secretly write articles disproving the age of Aunt Joice and even went so far as to claim she wasn’t a human being but a “constructed automation made up of whalebone, india-rubber, and springs ingeniously put together.” After these reports came out thousands who had previously not seen Aunt Joice came out to inspect for themselves if she was real and if they had been deceived.

The result of all the press was always a larger audience at every show P.T. Barnum put on. This specific story might sound a little ridiculous in 2012 but the principal still stands: do something outrageous and every media channel will want to write about what you are doing.

Conclusion. These are the three broad principals used over and over again by the distribution hackers of the 1800 and 1900’s: gaining access to pre-existing distribution channels, offering no-brainer offers, and gaining press through outrageous stunts.

These principals were sometimes used separately, in conjunction with each other, or on varying degrees but in every case tapped strongly into one of these methods.

My goal is to apply these lessons to the 8 products I am helping out with and report back to you with some case studies and real examples on how you can use these principals too. Stay tuned.. 🙂
 

Advertisements

Written by Chris McCann

August 4, 2012 at 2:38 am

Result of Distribution Help

with 3 comments

Last week I offered distribution help to the readers of the StartupDigest Reading List.

After vetting through a few hundred applications here are the 7 companies I’ll be helping out with over the next week:

Really looking forward to thinking creatively and helping these awesome products out!
 

Written by Chris McCann

August 3, 2012 at 4:59 am

Distribution Help

with 4 comments

Today I am trying an experiment which is a little different and a little crazy.

I’ve been studying and practicing the art of getting mass initial distribution and I want to help others who are going through the problems of getting mass initial distribution for their product with my time and personal perspective.

Here are my only conditions:

  1. You have to have a good product that has already been built.
  2. You have to have a committed team around you (doesn’t matter if its 2 or 100 people).
  3. You have to have the ability to produce your product on your own, no outsourcing.

That’s it. If you’re interested tell me about what your working on here.
 

Written by Chris McCann

July 27, 2012 at 7:33 am