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Sunday, January 22, 2012

How to sell more toothpaste

I am always interested in stories about people having bright ideas, doing business better or offering outstanding service. Normally, I prefer such stories to be my own personal experiences, but I want to tell one today that is a legend. Whether it is really true or not, I cannot verify, but it has an intrinsic simplicity from which I am sure we can all learn.

Back in the 1950s, this guy approached one of the large toothpaste manufacturers and said that he had an innovation which would cost them almost nothing to implement, but would yield an immediate 40% increase in business. He offered to sell them the exclusive rights to the idea for $100,000. This was a huge sum at the time, but, given the high volume of toothpaste sales, it would be recouped rapidly.

However, the executives of the company were greedy and would not spend such money if it could be avoided. They thanked the guy and said they would get back to him. A big meeting of the company’s marketing and technical staff was called and they were tasked with proposing ideas for increasing business by 40% for little cost.

Two weeks later and no useful ideas had emerged. So, they called back the guy and said he had got a deal. After the legal niceties were completed and the money handed over, he gave them a brown envelope containing a small slip of paper. On this slip were the words: “Make the hole bigger.”

If you increase the diameter of the hole from 5mm to 6mm, the volume of paste squeezed out for a given length of squirt along the brush is increased by 40%. So, most users will consume the tube that much faster and need to buy more …

And here is another short story: You might heard abt one of the biggest cosmetic companies of Japan that they received a complaint by a customer against receiving an empty soap box. A huge technical and management meeting was called and investigated the reason how empty soap box reached in the market. Finally they learned that this defect happened in packaging sector so they invoked highly technical efforts of Engineers to make such a robust and reliable system that not even a single box pass empty during packaging.

So, engineers redesigned the whole system and made a great surveillance system costing million of Yen. But, the same problem took birth in India also. In a small soap manufacturing company, similar frequent complaints were recorded. So, the manufacturer solved this problem with thousand fold simplicity and thousands time less amount… He just bought a large industrial fan and placed it against soap boxes. Empty boxes flew awy and soap carrying boxes would move ahead for storage.