Under the Influence with Terry O'Reilly - S5E05 - Small Move, Big Gain

Episode Date: February 5, 2016

This episode explores how small moves can result in huge business gains. While much of the business world spends its time looking for the big idea, many companies enjoy massive results with tiny moves and subtle tweaks. We’ll look at how a hit movie that was turned down by every studio in town was finally sold thanks to a small change in the way it was pitched, how Obama used a small tactic to beat John McCain, and how broccoli made a small move to become popular during the infamous OJ Simpson trial. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling. Subscribe now and don't miss a single beat. From the Under the Influence digital box set, this episode is from, noon, noon.

You're not you when you're hungry. You're in good hands with all things. You're under the influence with Terry O'Reilly. One day in Afghanistan, a small troop of American soldiers found themselves involved in an exchange of gunfire with a small group of Afghans. The skirmish goes on for days. It's a gun battle with no end, as each side just keeps firing shots in the other's direction. The other group isn't associated with the Taliban, so the Americans aren't sure why they're being fired upon.

Finally, the American lieutenant in charge has an idea. He says, why don't we just ask them? So the lieutenant signals a ceasefire. When the shooting stopped, he slowly walked over to the Afghans and asked, why are you firing at us? They tell him it's because the Americans are not paying rent for the land they're on. The lieutenant says, Oh, okay, so we'll pay rent.

The Afghans say, That's fine, but we have to warn you that another group will start shooting at you. When the lieutenant asks why, the Afghans tell him that the other group believes they own the land. Then the lieutenant asks this one simple question. Is there a place we can move to where we won't have to pay rent? The Afghans point to a place just 180 meters away. So the American squad picked up their equipment, moved 600 feet to the

left, and the shooting stopped. That was all it took. It was the smallest move that resulted in a surprisingly big gain. It's surprising how many small moves in warfare can result in a huge advantage, especially when that warfare is marketing.

Some small moves are the result of keen insights, some are born of practical necessity, and still others materialize out of sheer luck and thin air. But here's the interesting thing. It doesn't matter how small the move is, because if it's smart, it can result in a big, big gain. You're under the influence. Influence. Small moves are often deceptive.

They appear so innocuous that many businesses can't see them, or choose to overlook them or don't trust them. Most companies only focus on the big, disruptive ideas. Yet, tiny moves can be little earthquakes that can result in huge changes. By 1991, McDonald's business had grown stagnant. Revenues had slowed down and only grew 1%, down from the robust 10% and 20% it had enjoyed in the 70s and 80s. Then, one day, an account executive from Coca-Cola approached McDonald's with an idea. He suggested that the fast food restaurant

bundle a hamburger and fries with a Coke. It was a somewhat self-serving suggestion, as Coke stood to benefit greatly from the bundling. McDonald's resisted the idea at first, because creating a food bundle meant lowering their margins on three main menu items, unlike the Happy Meal, which was a children's product created for promotions.

But due to their weak revenue forecast and pressure from the stock market, the fast feeder eventually came around to the notion, combined a Big Mac, a large fry, and a medium Coke, and called it an extra value meal. While the bundle offered customers a 20% price discount, McDonald's hoped to make up the difference with big-time volume. It was a good bet.

Within three years, extra-value meals accounted for close to 50% of McDonald's revenues. By 1997, McD's called the extra-value meal their most successful item of the past 10 years. Revenue increased 11%. But Ronald McDonald wasn't the only winner. One year after the introduction of the extra-value meal, Coke announced record profits, all due to the simple suggestion

of adding a Coke to a bundled meal. Small move, big gain. Time for Roll Up the Rim to Win. Ah, spring is in the air. And everyone's just itching to roll on down to Tim Hortons. So they can Roll Up the Rim to Win. I won't beat around the bush. I think Roll Up the Rim was a pretty good idea.

In the mid-1980s, Tim Hortons was on a roll. The chain was expanding at a record pace, and the number of stores was close to doubling every five years. According to founder Ron Joyce in his book Always Fresh, an outside supplier came to Tim Hortons in 1985 with an interesting suggestion. The supplier was the Lilly Cup Company, which was one of two companies that supplied Hortons

with all their paper coffee cups. Roger Wilson of Lilly Cup was trying to gain a larger share of Tim Hortons' business, so one day he approached Hortons' management with an idea. His company had developed a new cup that allowed for a message to be printed under the rim. He said it might be a good place to print a contest message or something. Tim Horton's was intrigued. Printing under the rim didn't add to the cost of the cup. Plus, a contest was a great way to stimulate coffee purchases in the spring, when sales were

traditionally soft. So Ron Bust, Tim Horton's marketing director, was assigned to come up with a way to use the rim in a promotional campaign. He came back with Roll Up the Rim. It was to be a contest where customers could roll up the rim to see if they had won a prize. The promotion debuted in 1986. The biggest prize that year? A box of Timbits. Really? Yep.

There was only a slight rise in sales that first spring, but it really took off in year two. Roll Up the Rim became so popular that just two years later, Tim Hortons was giving away automobiles. The promotion really became memorable when the tagline was said in commercials with rolling R's. So time to spring on down to Tim Hortons to Roll Up the Rim to win. Roll Up the Rim will turn 30 years old this year, and the promotion has given away over 500 cars and hundreds of millions of coffees and donuts since 1986.

It results in a huge sales gain for Tim Hortons every year, all due to a small move. The simple suggestion to print a contest under the rim. Remember this jingle? Who walks the stair without a care

And makes the happiest sound Bounce up and down just like a clown Everyone knows it's Lincoln Back in 1945, naval engineer Richard James was developing springs to add stability to shipboard instruments when he accidentally knocked one off a shelf and watched it walk across a stack of books.

Sensing the spring could be turned into a toy, he showed it to his wife, who christened it Slinky. James then got a $500 loan and made 400 Slinkys. He managed to convince retailer Gimbels to let him demonstrate the new toy at their counter. But a Slinky at rest isn't very exciting, and the toy got no real

interest from shoppers for hours. So James asked Gimbels what turned out to be a very significant question. He asked if he could use the end of their counter. That allowed him to show customers how Slinky really worked. Within 90 minutes, all 400 Slinkys were sold.

As Richard James' wife told CNN many years later, if it hadn't been for Gimble's giving us the end of a counter to demonstrate, I don't know what would have happened. Sixty years later, over 300 million Slinkys have been sold. A small request, the end of a counter, huge gain. So how is she? How is she? She's a... She's a mermaid.

I don't understand. All my life, I've been waiting for someone. And when I find her, she's a fish. Nobody said love's perfect. Back in the late 70s, producer Brian Grazer had an idea for a new movie. It was about a mermaid washing up on the shore in New York City. The tentative title was Splash. He pitched it to every studio in Hollywood, and every one of them turned him down.

For seven years, he kept pitching his mermaid story, but movie executives just couldn't get their heads around the idea of a mermaid walking the streets of New York. Grazer kept striking out. Then one day he realized there is a lot of information in a no. So he decides to listen more intently. He pitches Splash again, gets turned down, and realizes the reason is because he was pitching it too much

from the perspective of the mermaid. So he decided to slightly alter his pitch. Instead of a movie about a mermaid, he begins pitching it as a love story between a man and a mermaid, saying the movie was really about finding the right love for yourself as opposed to the love people would choose for you. Same movie, different framework. He just changes the pitch.

So he presents the love story angle to Disney, and the studio buys it on the spot for its new Touchstone division, which was created to allow Disney to do grown-up movies. Splash not only becomes Touchstone's first feature, it becomes the fastest money-making movie in Disney history up to that point, and made stars out of Tom Hanks and Daryl Hannah. Same idea, small pitch change, huge gain. And then to know that Reverend Al Green was here. Remember when President Obama sang a little Al Green during a fundraiser in

2012? 2012. By just singing six words of Al Green's song Let's Stay Together, sales of Green's song shot up 490% that week. It was downloaded 16,000 times, more than it has ever been downloaded before. Small move, big gain. But Obama is no stranger to making a small move to reap a big gain. When he was campaigning against Senator John McCain back in 2008, he employed a small tactic that had a sustained compound impact. Every time he met McCain at a debate or was asked about McCain,

Obama always thanked the senator for his, quote, half-century of service. He wasn't just paying his respects. It was a small but powerful strategy to paint McCain as old. Obama's platform of hope and change was based on youthful optimism, and he wanted to leverage the 25-year age difference between him and his opponent.

By framing John McCain as old at every opportunity and by hiding that jab inside a compliment, it fed into Obama's platform and the country's hunger for change. It was a small but effective move that helped bring about a historic gain. And we'll be right back. summer runs, or playoff season meditations. Whatever your vibe, Peloton has thousands of classes built to push you.

We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. If you're enjoying this episode, why not dip into our archives? Available wherever you download your pods. Go to terryoreilly.ca for a master episode list.

Sometimes a small move isn't about generating profit or votes. It's about persuasion. In the early days of LASIK eye surgery, people were unsure about the procedure. Just the thought of having surgery on your eyes was enough to make people uneasy. But there was one surgeon who employed a small persuasive tactic to convince his patients to go through with the surgery. When they came in for a consultation, he would tell them all about it, how safe it was, and how quick the procedure took. Most patients were still very unsure. That's when the surgeon would say,

See? and point to a basket full of discarded eyeglasses. The patient saw and booked the surgery. A small move that produced big gains. When Hurricane Andrew hit in 1992, it was the most destructive hurricane in U.S. history up to that time. Beyond the usual damage of a Category 5 hurricane, Andrew also caused some unexpected issues. One of those involved an aquarium in Florida.

When the storm started to level buildings in South Florida, a major aquarium tank burst, and one foreign species was swept into the Gulf of Mexico, then into the Caribbean Sea. That species was the lion Sea. That species was the lionfish.

Foreign to the Atlantic, lionfish come from the tropical waters around Indonesia. It's an intense predator. While it's strikingly beautiful in its own way, it is aggressive and has venomous fins. When it was released into the Atlantic, it began to reproduce quickly. One female lionfish can produce over 2 million eggs per year. When the lionfish invaded the Caribbean Sea,

it began to devour local fish populations, with each lionfish capable of eating as many as 30 fish in 30 minutes. The decimation of local fish species threatened the environment and the economics of Colombia, much of which depends on fisheries. The lionfish had no natural predator, and it was destroying the coral reef balance. That's when an advertising agency had an idea. Ogilvy and Mather Bogota looked at the situation like a business problem.

The ad agency decided the solution was to tempt the hungriest predator of all, humans. The simplest way to rid waters of lionfish was to eat them. So Ogilvy and Mather joined forces with the top chefs in Colombia and had them create lionfish recipes. Even though a lionfish was poisonous to touch, its meat is safe and very tasty. The agency created an advertising campaign titled Terribly Delicious.

It was a play on how terribly evasive the lionfish was and how delicious its meat is. A beautiful lionfish cookbook was created, full of desirable gourmet dishes. A pamphlet was distributed full of lionfish recipes.

In effect, the advertising agency and the Colombian Ministry of the Environment generated a cultural shift by turning the lionfish, previously unheard of in Caribbean waters, into an everyday fish dish. A supply chain was created with fishermen and local

fisheries. Famous hotels and top restaurants began serving it. Lionfish was put into supermarkets. But traditional media wasn't enough to get the message out. They had to aim higher. That's when they made a small request. To the Catholic Church.

There are 48 million people in Colombia, and 84% of them are Catholic. Much fish is consumed on Fridays as well as during Lent and Easter in the Catholic faith. So the church was asked to suggest lionfish to their congregations. The church understood the urgency and, during sermons, priests began asking parishioners to choose lionfish when eating fish. I invite you not only to eat fish, but to eat lionfish. Lionfish. Lionfish. Even the president of Colombia tweeted that he was eating lionfish during Lent.

That additional element, recruiting the Catholic Church, pushed the program into overdrive. Today, indigenous fish species are returning and the lionfish population is declining. For every single lionfish eaten, 34,000 fish, 6,000 crustaceans, and 3,500 other species are saved, all due to the smart, terribly delicious solution of eating lionfish. And the small additional idea of mobilizing Catholics to do the eating.

Small move, huge gain. There is a long and interesting list of small, lucrative moves in the world of marketing. For example, there's a reason why milkshakes are so thick at McDonald's. It takes a while to drink them, and the longer people linger, the greater the chance they will spend more money. A direct mail copywriter once simply changed the word fix to instead say repair, and increased response for a roofing product by 200%. Fix sounded like work. Repair sounded like a solution.

Procter & Gamble didn't know how to demonstrate the softness of Charmin bathroom tissue on TV, so their advertising agency came up with the idea to tell women to squeeze the Charmin in grocery stores, the way they would squeeze a tomato. But then they worried store managers would go crazy. So they invented a fictitious store manager named Mr. Whipple, who would say, please don't squeeze the Charmin.

That small addition kept store managers happy, and sales went through the roof. Merv Griffin once pitched a TV network on a new game show idea he had. But the network wasn't interested in yet another game show where contestants guessed the answers. So Griffin changed it to be a game where contestants are given the answers and have to guess the questions. Hello, Jeopardy! One of the main reasons the use of toothpaste, shampoo, and laundry soap are habits is due to one small element. Foam. As Charles Duhigg points out in his book, The Power of Habit,

there are dozens of daily rituals we ought to perform that never become habits. Like eating more veggies and less fat. Or applying sunscreen, which only 10% of us do on a daily basis. The reason these things don't become habits is because they don't create cravings. Toothpaste, laundry soap, and shampoo manufacturers understood this fact many years ago. That's why they made a small change to their products early on, by adding a foaming agent. When you brush your teeth, the toothpaste creates a foam.

When you shampoo your hair, it lathers. When you use laundry detergent, it creates soap bubbles. There is no cleaning benefit to foaming. It is there for one reason and one reason only. To make you feel good and to create a habit. When your toothpaste stops foaming in your mouth, you stop brushing. If your shampoo stopped lathering, you would change brands. If you added laundry soap to the washer and it didn't bubble, you would think it isn't working.

As crazy as it sounds, foam creates a reward. That reward creates a craving, and that craving creates a habit. Such a small move, such a big gain. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff season meditations, whatever your vibe, Peloton has thousands of classes built to push you. We know how life goes. New father, new routines, new locations.

What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. Now, counsel, I realize that we're all tired and we wish this were over sooner than later, but this kind of petty bickering is not appropriate. And if you heard the snickering of

the jurors as they were going out, they thought it was pretty silly, too. Recognize that voice? It belongs to Judge Lance Ito, and that was a moment from what became known as the trial of the century. When O.J. Simpson was tried for the murders of his wife Nicole Simpson and her friend Ronald Goldman, Judge Ito made a controversial decision to allow TV cameras into the courtroom. The trial was televised for 134 days. While watching the trial on television, advertising agency Goldberg Moser O'Neill noticed that the camera focused on Judge Ito at his bench every three or four minutes. And any product on his bench

would get massive and free exposure. One day, as recounted in Fred Goldberg's book titled The Insanity of Advertising, an attorney asked for a recess so a pizza could be ordered, prompting Judge Ito to sarcastically ask for a broccoli pizza.

As it so happened, the advertising agency had a client that sold a product called Broccoli Walkley. It was a bag of pre-cut, pre-washed broccoli heads ready to eat. So the ad agency sent a small Broccoli Walkley package to the judge containing a bag of broccoli, a Broccoli Walkley coffee cup, and a t-shirt. Sure enough, the Broccoli Walkley coffee cup ended up sitting proudly on Ito's judicial bench. And every time the camera zoomed in for a close-up, it panned over the Broccoli Walkley logo. A few days later, the agency received a letter from Judge Ito requesting another Broccoli Walkley logo. A few days later, the agency received a letter from Judge Ito requesting another

Broccoli Walkley t-shirt. And Broccoli Walkley... You just love saying that. I do. And Broccoli Walkley got free national airtime every day during the most watched trial of the 20th century

and sales soared. Just when you thought the OJ trial couldn't get any stranger, small move, broccoli-walkley game. Charles Darwin understood the power of small. He proved that the tiniest variations between animals and plants gave them a winning edge, that even the smallest of advantages led to the survival of the fittest.

Many times in business, the power of a small move is overlooked in the mad search for the big idea. But often, it's the subtle tweak that opens the floodgates of profit. When a Coca-Cola executive suggested adding a Coke to a bundled value meal, that simple idea not only rescued McDonald's revenues, it gave Coke record profits. When a cup supplier happened to mention to Tim Hortons that it could print on the inside of the rim, a famous 30-year promotion was launched. When the problem of eliminating lionfish needed one more element to be a success,

the simple idea to enlist the Catholic Church made all the difference. And when toothpaste and shampoo added foam, it added a few extra zeros to the profit margins. You never know where a lucrative idea is hiding. It could be on the end of a counter or in a bag of broccoli. The trick is to find the big in the small when you're under the influence.

I'm Terry O'Reilly. Thank you. This episode brought to you by Colt 45 Malt Liquor It isn't just for breakfast anymore! Under the Influence was recorded at Pirate Toronto Series producer, Debbie O'Reilly Sound engineer, Keith Ullman Theme music by Ari Posner and Ian Lefevre Research, Margie Gilmore Hey, I like your style. I'd like your style even more if you were wearing an Under the Influence t-shirt.

Just saying. You'll find them on our shop page at terryoreilly.ca slash shop. See you next week.