Reagan’s nicotine stocking stuffer-4 winning rules of dead President marketing.

How do you market someone who is dead? If I can successfully market the non-living, marketing something alive should be a snap right?

I found the answer to that question at the top of a hill in Simi Valley California. If you are a big Reagan fan or history buff, you must take a trip to Simi Valley and see the Reagan Library. You will not only get to see the largest collection of personal items from the “Old Gipper”, but you will get a crash course in great marketing. The library is located about 1.5 hours from his Santa Barbara ranch and 45 minutes to Hollywood. Reagan shot a few westerns in Simi over the years there but he has no other affiliation to the valley. I asked around “why build the library here?” According to the staff, “the developer of this subdivision donated 100 acres for the library, they could not pass that up.”

“Is there a lesson at the top of this hill waiting for me? I am a loyal reader give me the goods!”

Hang on, we are almost there. As you wind up the road, the library sits on top of the best ground in Simi Valley in my opinion. It is surrounded by new upscale gated communities, golf courses and parks. I am sure that is why the family also selected the library as his final resting spot. You do not find his grave by asking a librarian “where do they keep the dead people?” Nor can you find it yourself in a dewey card catalog under “buried Presidents.” The term “library” really is not accurate, to the joy of my kids. It should be more accurately called “The Ronald and Nancy Reagan historical theme park” or “The Reagan Institute of his really cool stuff!” They have an entire wing of every dress Nancy wore for major events, a life sketch of the President from Dixon Illinois all the way to the Whitehouse. His actual diaries, his desks, Hollywood memorabilia, a re-created set of his oval office, the actual cars he drove, the limousine he was standing by when he was shot at, the actual helicopter he took from the South lawn to Camp David. Way too much to list.

Take everyone to this, it is about the best time you will have for $9 bucks. Kids are $3 and under 11 are free. I am sounding a little like a tour guide, please forgive me. I will get to the main point of why you are probably reading this blog.

“Harris, what can I learn from marketing dead Presidents that will help me make money in my business or franchise?”

Make it remarkable

As you make your way to the end of the library, it opens up into a dramatic auditorium with Air Force One parked in it! This is the same plane that Nixon, Ford, Carter, Reagan, Bush One, Clinton and G W Bush has used as a war room, conference room, media room and private office. The exhibit winds around a catwalk to the side about two stories up. As you approach you will see the marketing accelerate.

Create demand

As you continue on the catwalk you will see a sign, “No pictures beyond this point.” That sets the hook into your primal brainwaves that you are in an area that you want to take a picture in. You fire off a few nice pictures after the cut off line to show them who’s the boss. As you approach the steps to the front door, you see another warning sign about picture taking. They also dress a college kid like a security guard which only adds fuel to my trigger happy fire!

Cut off all supply

The security guard makes each party wait at the bottom. Then a nice guide takes each family separately up to the top and stand together at the front door looking out at their camera. “This is just a free picture, if you want a copy you can grab one down by the Reagan pub.” Very nice touch! Set it up so no trigger happy cheapskates can get a nice picture, then make it a no obligation experience. This creates your hot list of prospects you will process later through your sales machine. Mr. Hunt the library Director has some marketing chops or else hired someone who has. Play to your strengths.

Show Time!

I feel I am immune to most marketing tricks, but this was too much. I had to do the Nixon “I will return” peace sign pose with my family at the same door he made the same historic photo. You wind through the plane, nose to nose and end up down by the Reagan Pub and gift shop next door. A wall of HD panels displaying the photos, with 5X7 for $10, with the option to trade up. I asked a few people how many they sold a day. They did not want to give me the answer. I smiled and joked until I heard those sweet marketing words, “about 1,000 photos a day on average” whispered with a conspiratorial grin. Reagan will make more dead than alive. Sorry Reagan pub, the “Presidential Water” with the seal on it did not work for $3.50 a bottle. I am not sure I want to drink any dead President’s water even at a buck a bottle, sounds old. The hats and shirts slow, but the photos at the minimum take, they would bring in as much as three million a year.

What do you have waiting to make remarkable in your business? Think until it hurts than think some more. We all have our own Air Force One experience waiting to monetize, it is just waiting for us to discover, brand and market it in dead Presidential style.

Licensing the unnatural act

Painful stat of the day, IBM's market share of personal computers:

1981- 1.9 %

1984- 63 %

1990 - 15.2 %

2000- 5.4 %

As a kid we are really more inclined to buy and sell stuff then license stuff. The idea of licensing is not natural; it seems too complex, too intangible. Some kids pick it up quicker than others however. They are the ones who usually go on to make gobs of money while making it look easy. I watched an interview with Diddy, P Diddy, Puff Daddy, Daddy Puff…last week. I never knew he started off his career in licensing, he probably did not know it either. He recalled the look of disappointment on his Mother’s face when he would ask her for new shoes as a 12 year old boy. It hurt, the look really drove him to find a way to make money. The best gig going for a pre-teen was a paperboy but he was still too young, he needed an angle.

The ah ah moment! Cut a deal with an older paperboy to stay home then work the route; pay the older boy who already had the contract 50% of the revenues and the publisher would never know. He expanded to other paperboys and cut 30%, 20% even 10% royalties with college kids to stay on as the carrier of record and get paid for the license. As the pie grew, his share of the pie also grew. No wonder he is doing well in music and clothing, two giant licensing industries.

Somewhere along our journey, some of us pick up the fact quicker than others, more money can be made with less effort using our minds not our hands. Unless of course you have very talented hands, which I do not. Control the contract, control the cash, control the outcome.

"The day Gary Kildall went flying"

The tale of young Bill Gates cleaning up on old blue goes down in licensing lore as the Mother of all licensing deals. The legend goes like this: One fateful day in the summer of 1980, three buttoned-down IBMers called on a band of hippie programmers at Digital Research Inc. located in Pacific Grove, Calif. They hoped to discuss licensing DRI's industry-leading operating system, CP/M. Instead, DRI founder Gary Kildall blew off IBM to spend the day in his airplane, and the frustrated IBMers turned to Gates for their operating system. While he's revered for his technical innovations, many believe Kildall made one of the biggest mistakes in the history of commerce. (Strike one) *Licensing note, you cannot be great at everything.

Quick timeline recap:

1980 July 22^nd team from IBM meet Bill Gates and Steve Ballmer to discuss Microsoft products. Microsoft is 5 years old by now.

Aug 28^th Microsoft and IBM sign a formal contract for Microsoft to develop certain software products for IBM's new microcomputer. Microsoft will receive US$200,000 to adapt the operating system to the IBM PC, and US$500,000 for DOS, BASIC, and compilers. Microsoft is to have an initial version of the operating system and BASIC working by mid-January. Bill Gates also bets that IBM clones will flood the market soon and they will all need to use his software. He negotiates to also keep the copyright to the software.

Microsoft bought the rights to QDOS for $50,000, keeping the IBM deal a secret from Seattle Computer Products and inventor Tim Paterson.

Microsoft missed the January 1981 deadline, trickier then they thought. They must modify QDOS enough to avoid a lawsuit from Gary Kidall at Digital research and make it work on the IBM hardware.

1981 Aug 12^th IBM announces PC for $1,565 with QDOS, modified and renamed MS-DOS.

Gary Kidall tells IBM that its MS-DOS infringes on its copyright, He says he will not sue if IBM sells CP/M on the IBM PC in addition to MS-DOS. (Strike two) IBM agrees then goes on to charge 5 times the amount to consumers to buy Gary Kidall’s software then MS-DOS.*Licensing note, watch backend points, don’t get enamored with the big numbers and take your eye of the finer points.

Don’t cry for Gary or IBM both came out ok. Gary sold his company to Novell for 120 million in 1991 and IBM’s PC numbers went intergalactic for the first 3 years under the agreement, only to squander the lead later.

In 1981, Tim Paterson (Inventor of QDOS sold to Microsoft for 50k) quit Seattle Computer Products and found employment at Microsoft.

Which is worse?

Selling your software for $50,000, join their company and watch your new boss go on to become the world’s richest man.

Or

Take out the plane and relax for the day and get beat out of the contract of the millennium.

Or

Go from 63% market share in PC’s to 5.4% and become the poster child for letting the big one get away.

It is easy to look back and believe you are a genius and would have done things very differently if you just had their luck to be in the right place at the right time. The fact is, history is written forward, not backward. When you are in the battle the answers are only clear after the fact and the “Geniuses” get to look back and spin their prophetic take on others mistakes.

Live and learn.