Marketing as Education

It is not really a new concept, but more and more companies today are adopting a marketing approach that incorporates education for customers and potential customers. Today’s newsletters are less about self promotion and more about providing useful information. More and more companies are providing free seminars. These efforts aim at building relationships and establishing value in the community, not just selling products and services. Small businesses are often uniquely positioned to take advantage of this kind of marketing.

One such business that has become a great source of information for clients and potential clients is Westlake Village’s AXICOM. AXICOM, a provider of technology services since 1996, specializes in computer and network support services for businesses in the Los Angeles and Ventura counties. I asked AXICOM CEO, Jake Nonnemaker, about his marketing philosophy.

Q. Jake, how did you decide to provide education as a key part of your marketing program?

A. The decision to offer free technology education came about because we wanted a new way to provide value to our customers. After talking to some of our customers and asking them what else we can do for them, quite a few asked how they can get the most out of their tools like Microsoft Office and mobile phones. So we started to deliver exactly that to our customers. Our seminars and workshops help differentiate us from other computer support professionals. As you can imagine, there isn't much barrier to entry in the IT support arena. A guy can get laid off from his corporate job at 9am and be Joe the Computer Tech LLC by noon. And with the economy the way it is, a lot of people have done just that. So the field is pretty crowded and I've found that educating our clients on technology really sets us apart. Our education seminars can introduce new products to our existing customers but also give prospects an opportunity to check us out and see that we are people they will want to do business with. We also show our customers how to get the most out of their technology and in today's economic environment that is crucial.

Q. What kinds of education programs has AXICOM provided or sponsored?

A. We recently upgraded to a larger office in Westlake Village after 9 years in Agoura Hills. With our new office, we opened the AXICOM Technology Learning Center. We hold free seminars and workshops which are generally about an hour long and cover topics such as social networking, Windows 7, Microsoft Office products, Blackberry and iPhone, mobile computing, PC maintenance, and cloud computing. We also bring in other expert speakers to talk about things like email marketing, paperless office and simplifying your office.

Q. What has been the response?

A. The topics have been very well received so much so that we've been maxing out the capacity of our Learning Center which holds about 12 people. So we've started doing online webinars as well to accomodate more people and also provide reach to people who live outside the immediate area.

Q. What would you recommend for other businesses who might be considering education as part of their marketing efforts?

A. I would recommend staying committed to an education program for at least 6 months if you decide to do one. That's when our customers seemed to have realized that we were serious and it wasn't just a passing marketing scheme. Don't be discouraged after the first couple of seminars because those are the ones that you are going to cut your teeth on. It becomes much easier once you develop a system of doing seminars or webinars.Don't just use seminars as a platform to hawk your products. You really need to make sure people go away with valuable information that they can use. Also, don't make it all about "you." Bring in guest speakers that complement your product or service. You will find that your customer will value you more as a resource and it will solidify your relationship.


For more information about AXICOM, you can reach Jake at (818) 865-9865 or jake@axicom.net.

Who Pays for Your Credit Card "Rewards?"

When you use that credit card that provides airline miles, cash back or other "rewards," who pays for the reward? Most people assume that credit card companies pay for these rewards out of the money they make from consumers using their cards. But that is not how it works. The retailer pays fees, called "swipe fees,"  for the service of accepting the credit card. The card company pays for the "rewards" by charging additional percentage points in the swipe fee to the retailer who accepts the card as payment. This is a cost over and above the normal fees charged to the retailer for using credit card services. Thus, if a retailer pays a normal swipe fee of 1% to 2% for a credit card sale, a rewards card sale might cost him an additional 2% or 3% of the sale price. Total fees for a rewards card transaction can approach 5% of the price of the merchandise.

The use of these rewards cards is growing and businesses, like convenience stores, that operate on low profit margins are particularly hard hit. A percentage point or two may not seem like a lot of money, but if your profit margin is normally 10%, paying 5% of the sale for the transaction essentially means you have to double your sales to get back to normal. Moreover, there is no ceiling on the percentage that credit card providers can charge back to the merchant. Small retailers are not in a position to negotiate these fees or to refuse credit card purchases altogether. They cannot determine what fee they will have to pay by just looking at the card. So most retailers are forced to raise prices to cover the rising cost of these fees. Price increases apply to cash sales as well as credit card sales. Every buyer is subsidizing the use of the rewards cards even if they do not use one.

Credit cards are a convenience, but they are not free even if you pay the whole balance every month. Visa and MasterCard collected about $48 billion in swipe fees in 2008, triple what was collected in 2001. In 2008, the average American family paid about $427 in swipe fees. Convenience stores have organized to fight back and have a web site called Fight Swipe Fees. If you want to see what your credit card fees really cost, there is a great little site called True Cost of Credit that gives you the fees charged on your particular card for various sized purchases. It is an eye opener.

Office Depot's Ben the Barber

Have you seen the new Office Depot ad featuring Ben, the barber? There is a really interesting marketing tactic at work here. Ben is depicted as a typical small business person with a local barber shop. A big chain store moves in across the street, advertising $6 haircuts. Ben is chagrined, but he is resourceful. He goes to Office Depot and buys a banner that says "We Fix $6 Haircuts." Five months later the big chain haircut spot goes out of business and Ben's business is saved. According to the ad, Office Depot's low prices helped Ben to compete. It is a victory for the little guy.



When I saw this ad, I wondered how many people would see a connection between Office Depot and the big chain that moved in across the street from Ben? Office Depot is a big chain that advertises low prices. How many small office supply businesses were driven out of business because they could not compete with advertising and pricing offered by a major chain like Office Depot? Clearly, the producers of this ad do not expect the public to make this connection. Office Depot is not the big bad chain store, like the $6 haircut chain, but the "good guy" on the side of the small business person.

Like Starbucks unbranding some of its stores in order to appear local, Office Depot is attempting to position itself as the champion of  local, small businesses. Are they tapping into a growing sentiment among some consumers that local businesses are good for communities and major chains are not? Or is it simply a recognition that their customer base is not big chain stores, but small community businesses? Or both? In any case, it is clear that they do not expect the public to pick up on the irony implicit in their ad featuring Ben the barber.

Paper or Firewood?

It might surprise people to learn that more wood is consumed in New York State in residential fireplaces than is used for paper. Finch in the Forest, a blog done by the Finch paper company, reports that the New York State Department of Environmental Conservation estimates a million cords of firewood are used in homes in New York. That is approximately 2.6 million tons of firewood, compared to 1.1 million tons of pulpwood used by all the paper mills in the state to produce paper. Pulpwood and firewood come from the same parts of the tree.

That may sound like an alarming amount of wood, until you consider that wood, unlike heating oil, is a 100% renewable resource.  Responsible paper companies, like Finch, work hard to insure that our forests will be around for hundreds of years to come. The forest products industry plants an average of 4 million trees per day, about 5 trees per year for every person in the country. Properly managed forests sustain wildlife, water quality, air quality, and provide recreation opportunities as well as a sustainable source of wood products.

In Search of the Genuine - Ladyface Alehouse

The Region's first Micro Brewery has opened in Agoura Hills. Ladyface Alehouse & Brasserie is sure to be a big success for local owners, Chef Ray Luna, Manager Cyrena Nouzille and Brew Master David Griffiths. They have a great selection of on site brewed ales as well as some hard to find imports. The menu is also terrific, featuring items styled after a French or Belgian Brasserie. The Ale battered Fish & Chips is not to be missed. On top of the great food and brew, the atmosphere of the Alehouse is casual, warm and inviting. There is a nice view of Ladyface Mountain from the patio. Above all is the sense that you have arrived at a place that is genuine, a reflection of the unique personality of the owners, and not another predictable grill or sports bar.

Regular readers of this blog (both of them) will know I don't ordinarily do restaurant reviews here. So why this one? The emergence of this restaurant says something about the future of the region. People are looking for places that are unique and different when they want to get away or relax. The Conejo/Las Virgenes region is gradually emerging as that kind of place. It is finding its identity. The City of Ventura has done the same thing over the years and Oxnard has struggled to shape an identity for itself.  The Ladyface Alehouse, the vineyard at the Westlake Village Inn, and the City of Thousand Oaks acquiring property near the Civic Arts Plaza are all indications of the emerging identity of the Conejo/Las Virgenes region.