BYOMSPM

In this post I highlight key concepts from the third chapter of Jeff Kaufman’s book “The Personal MBA.” When possible, I try to ask myself critical analysis questions to apply the concepts to real businesses, including a job I’m considering working on the Capital One Travel Portal. Enjoy.

The first thing Kaufman discusses is how to figure out how to price a product, touching on the Pricing Uncertainty Principle: the theory that you can price a product however you want, and it can be hard to figure out what the optimal price is. Analyses that can help you figure out how to price a product include calculating the replacement cost, doing a market analysis, conducting a discounted cash flow/NPV, and doing a value comparison. Obvious competitors to the Capital One Travel Portal worth considering include Expedia, Google Flights, Hotels.com, Kayak, and individual airline, hotel, and car rental company sites.

Another key point that Kaufman touches on is that marketing and sales should emphasize the unique value proposition of a product to appeal to consumers, but sometimes it’s important to educate potential customers about what makes the product valuable in the first place. How would this apply to the Capital One Travel Portal? Currently ads boast that the Portal is the smarter way to book travel, but in those ads it’s not entirely clear what makes it smarter. The ads could emphasize the point rewards (which, to be fair, some do), and the Portal could be enhanced to have other features or unique value offerings that make it the smarter way to book travel in other ways. For example, it is fairly unique that flights, hotels, and rental cars are all available to search from one location, so the Portal could lean into that and build connections between those searching and booking services. Besides that, it seems critical that the search itself is as powerful as the competitor sites, if not more powerful.

Because this chapter was about sales, Kaufman also includes a few comments on negotiation, including the fact that generally the power in a negotiation lies with the party who is most able and willing to walk away. In the case of the Portal, it seems that potential customers have the power in this negotiation (as in, the negotiation of their patronage) because the relatively comparable travel booking site competitors keep the Travel Portal from being particularly unique or valuable to customers.

Next, Kaufman discusses that there are three universal currencies: time, resources, flexibility. Which of these is relevant to the Travel Portal? As I’ve mentioned, the Travel Portal offers a chance for customers to optimize their resources by gaining additional reward miles on travel purchases. That said, the core value proposition of a travel booking site is that it consolidates options into a convenient search tool to help customers find the best flight/hotel/rental car in the quickest amount of time (universal currency). I’m not sure the Portal completely delivers on this yet, but the potential is there.

Another key point that Kaufman touches on is that people tend to feel resistance to offers when they sense they’re trying to be persuaded or sold on something. He continues to say that consumers tend to be skeptical of gifts and suspicious if things seem too good to be true. Did you feel this way at all when looking at ads for the Travel Portal? I saw that the Travel Portal was offering free money, and my initial thought was that the portal itself must not be that good (considering that these marketers don’t think the benefits of using the Portal alone are enough to get and keep me there without an additional monetary incentive).

In contrast to the above, Kaufman argues that it is often more powerful and effective in marketing to make potential customers feel like they are making an informed decision (though this often depends on the offer actually being decent). How would you apply this theory to marketing the Travel Portal? The Travel Portal marketing needs to be clearer about why it’s smarter and what the unique value proposition is compared to other travel booking sites. As a consumer it’s also a little bit confusing why a credit card company-bank would create their own travel portal, and that makes me feel a little skeptical of their intentions. Overall, more dedication to creating unique value to the Portal and being extremely clear about that in the marketing could go a long way.

Thanks for reading.

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Works Referenced

Kaufman, Josh. “The Personal MBA.” New York, N.Y. : Portfolio/Penguin, 2012.