Voltaire wrote “Le mieux est l’ennemi du bien”, or “perfect is the enemy of done”.
Have you ever been so overwhelmed by the enormity of a project that you are too paralyzed to even start? More often than not, we are bombarded by tasks and projects from all areas of our lives. It is those who have the ability to prioritize and then begin chipping away who will be successful in the end.
Is the end in sight?
To further confuse the matter, it’s rare that a project has a clearly defined endpoint. So when to deliver the goods? If perfection is your goal, the recipient of your amazing creation may not live to see the unveiling. Your product or service is of no use to anyone if it doesn’t exist, so whom is perfection serving? If it is functional, roll it out.
The value in “good enough”
Most things in life are iterative, and thus offer revenue opportunities related to each additional unit of value you provide. This isn’t a new concept. There are many examples of companies who follow a strategy of continuous improvement:
After all, a product that can’t be improved is likely obsolete or easily copied. Why not continue to grow your business by offering your clients your commitment to continuous improvement?
Voltaire offered us a way to succeed in this crazy busy world we live in. He told us that the road to perfection is a journey; one that requires stops along the way.
Remember the days of Atari and Coleco? You’d buy a game cartridge or a hand held game like Pac Man and play it, no more complicated than that. Since those days Sony among others has taken the next step in creating a new gaming experience for the user, in return for added revenue opportunities.
The internet and onboard memory offer an opportunity to further capitalize on gaming enthusiasts’ desire to answer the question “what if”. Through its PlayStation Store, Sony offers additional outfits for characters; additional cars for your favourite racing game; and if you don’t have the time, skill, or interest in mastering each level of a game it’s no problem because for just $5.99 you can unlock those challenges and play your way through the game.
One popular PS3 game, “Little Big Planet”, which features a character known as “Sackboy” has 106 add-ons available; only a handful of which are free. These add-ons are mostly costumes which your Sackboy can wear and virtual stickers which you can collect. These range from $0.99 – $2.99. The more costly add-ons such as level packs at around $5.99 add extra levels to the game.
Cross promotion of games is pervasive throughout the PlayStation online store. The day ModNation Racers was released, the store offered a $1.99 ModNation Racers costume and stickers add-on pack for Little Big Planet!
Coming from a generation where buying the game cartridge meant that you owned the whole game, I can’t help but feel that this new generation is getting ripped off. But in a way, it’s like being able to find out what happened next after a movie ends and perhaps even write the next chapter.
Sony’s PlayStation systems are an example of what additional revenues can be achieved when you view a product not as an end result, as the beginning of a longer term relationship with its user.
When the Ontario government hands them lemons, Loblaw will make lemonade.
Loblaw has crunched the numbers and anticipates that they can still come out on top despite the low margins on generic prescription sales resulting from government reforms.
A new strategy
Loblaw announced on May 4th that they will extending their hours and services at most of their 500 in-store pharmacies, and more than double the number of onsite medical clinics to capture customers who are shopping around for a provider that offers the service they seek.
This is thanks to the droves of customers they predict will come their way from smaller non-diversified pharmacies who can no longer make a go of it, and larger players such as Shoppers Drug Mart, who have driven their customers away by cutting their hours and service.
Their strategy assumes that the customer will drop off their prescription at the Loblaw pharmacy and then browse the rest of the store, picking up higher margin items such as health and beauty products, or other grocery items. They are betting that these sales will more than make up for any losses on the prescription side. To minimize costs, Loblaw will be instituting automatic pill counting machines.
At what cost?
This development raises broader questions. If Loblaw is correct it points to a fundamental change in how we as consumers will be able to purchase prescription drugs. We are shifting from a market of many players of different sizes with varying levels of service to a few large players who control the dispensing of drugs in Ontario.
Will oligopolistic behaviour ensue? Will these larger players raise their dispensing fees to increase their margins, and if so will private insurance companies react? Or will they exercise their market power towards the generic drug manufacturers, to get a better price in return for exclusivity?
Health Minister Deb Matthews is reportedly pleased with Loblaw’s plans, but is the Ontario government sacrificing service in the name of cost? What will become of small pharmacies? Or underserviced areas where there is no Shoppers or Loblaw?
Pharmacies of all sizes are fighting back with an aggressive campaign against Liberal MPPs including radio ads, mailings and a website portraying the elimination of professional allowances as “cuts to frontline healthcare”. It will be interesting to see what the public and government response is to such an overtly negative campaign.
One thing is for sure, we will see some innovative pricing strategies resulting from the reforms.
For more background on this issue, see my post “Generic drug manufacturers are the key to solving pharmacy woes”.
Someone’s ears must be burning! Since my last post (Consider exchange rate risk when contemplating foreign investments), RBC announced that it is now offering a US dollar-denominated RRSP account through its online brokerage, RBC Direct Investing, with several other banks looking to do the same. (See the last page of their Spring 2010 Newsletter)
The advantage of these new accounts is that you only need to do the conversion from Canadian to US funds once. Then you can buy and sell US dollar denominated stocks, bonds, etc. without worrying about exchange rate fluctuations, because your US dollars will remain US dollars until you decide to convert them back to Canadian.
RBC will also be offering such opportunities in its Registered Retirement Income Funds (RRIF) and Tax Free Savings Accounts (TSFA) as well.
No word on other currencies being considered for this type of account, but given our proximity and knowledge of the US economy the US is a logical first choice.
For more information on these developments see Rob Carrick’s article “Online brokers lower cost of U.S. stocks in RRSPs.”
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