Giving Web Chat a Human Face

October 30th, 2014

One of the challenges customer support and sales agents face is the balance between efficiency and humanity. The more efficient methods of communication often are very impersonal, while the personal ones are expensive and inefficient.

On the one hand, a business wants to provide its services as efficiently as possible. This usually boils down to 2 key elements:

  1. Cost:  Having an agent at the customer’s home or office is very expensive. Having the customer visit them somewhat less. If the interaction can be over phone or video, it is even cheaper. Live chat costs even less. And email is cheapest of all.
  2. Accuracy: Customer interaction almost always involves transmission of some detailed information. It might be a serial number, an order confirmation, perhaps a URL or SKU. It is slow and tedious to describe these by phone; in person, we tend to write them down and hand them off, which not only is slow but also leads to errors. But email and chat can transfer information precisely and quickly, and allow for saving and cut-and-paste, reducing errors and, once again, overall costs.

Unfortunately, the further we go up the efficiency and accuracy chain – in person to video to voice to chat to email – the more impersonal it becomes, decreasing customer satisfaction. Despite everything we like to believe about rational people making rational purchases, in the end most decisions are emotional. Whether you are deciding to forgive customer support for not being able to help you exactly as you wanted, or choosing whether to buy the $200 suitcase from this salesperson, the decision is far more a result of your emotional state and personal connection with the people on the other end than a cold logical analysis.

And, quite frankly, text just doesn’t do it.

A human face, and to a lesser degree a human voice, triggers a personal and subconscious connection. I have seen studies showing that the probability of a doctor being sued for malpractice correlates directly with their bedside manner. Actually, average people can predict fairly reliably the likelihood of a doctor being sued just by seeing a single picture of the doctor’s face and body language at work.

Those of us who have used email for decades know how efficient it can be for transferring information, and yet how the anonymity leads to behaviour that would not be tolerated elsewhere. “Flame wars” over the most inane topics erupt regularly, with people writing things they would never dare to say if they could see the person’s face.

That is why I found it interesting to see a human face added to a once innovative yet now commodity product: live chat. I was looking at replacing the grates on my barbeque grill – not a simple feat, as Ducane has since been absorbed into Weber and my model long since discontinued – and spoke to several companies that provide parts. Since it is a discontinued model, and the grates must fit precisely (sort of hard to grill when the grates have fallen into the fire box), I needed to ask some detailed questions about model numbers, serial numbers, and dimensions. This was a perfect choice for efficient chat, which, fortunately, one of the companies – – offers.

I was surprised to see a picture pop up along with the agent’s name, Ali. Was this really a picture of her? I have no way to know. I am sure LiveChat Inc., has few if any policies requiring agents to use real pictures, and no way of enforcing it.

Nonetheless, this is smart product management – offering features that help your customer get their real job (sales and support) done, rather than the proximate job (talking to the customer).

  1. Adding a face increases emotional customer connection.
  2. Increased customer connection leads to higher customer satisfaction.
  3. Higher customer satisfaction leads to higher sales and profits.

In the end, did I buy from them? No, but mainly because they didn’t have the exact part I needed. No amount of human face will satisfy me when the product is not there. But I would have been more likely to, all other things being equal.

Decide Your Business(Insider)

October 29th, 2014

I used to love BusinessInsider, the Internet (and to a lesser extent general business) news site run by Henry Blodget. I am also impressed with how Blodget has reinvented his life. In 2003, he was charged with securities fraud by the infamous Client 9, a.k.a. then-New York State Attorney General Eliot Spitzer. Blodget settled for 2+2 ($2MM fine, $2MM disgorgment of “ill-gotten proceeds”) and a lifetime ban from the securities industry.

Blodget actually started with Silicon Alley Insider, a tech focused Web publication based in NYC (hence “Silicon Alley Insider”), which then merged with Kevin Ryan’s Business Insider, where Blodget took over as CEO and Editor-in-Chief.

What do I like about it?

  • Short, but not-too-short, articles with some more in-depth pieces
  • Broad coverage of the tech sector
  • Decent analysis
  • Usually good writing (with some notable exceptions)
  • Multiple viewpoints – often on the same day, two pieces with completely conflicting views will be published. You, the reader, decide which you think is correct, if either.

In addition to the site, and of course a Twitter feed, BI has a daily newsletter. Each day, one lead article, 4-5 primary articles, and another 4 secondary articles are highlighted. Initially, the lead article and the primary articles were all important news and analyses of the day.

Where does BI make money? I have no inside information, but like most broad publications (NYTimes, Washington Post, Yahoo, Facebook), advertising is a major component. The very essence of a three-way business model is to offer free content to a large audience, and then sell access to that audience to a third-party, either via advertising (Google, Facebook, Yahoo), through lead-generation, or through aggregate data.

There are 2 different kinds of “free” business models:

  1. Three-way: Get 10MM free users, sell advertising, customer access or aggregate data to a third party.
  2. Freemium: Get 10MM free users, convert 2% of them to paying, say, $200 per year, and you have a $40MM revenue business.

A third kind is not really a “free” business model: giving away free samples or loss leaders to drive business. Gartner uses this, as do most companies that sell directly to their primary customers, from grocery stores to software firms.

In the last several months, BI has aggressively begun to tout its analysis capabilities, trying to sell its own reports on demographics, trends, Internet usage, mobile commerce… all of what you normally expect from a securities firm like Goldman Sachs or a market analysis firm like Gartner. In some ways, it is unsurprising. Blodget is a smart guy who made his money as an analyst. This is what he does and knows, and is used to getting paid directly for that analysis.

The challenge is that both “free” models depend heavily on engaging a large number of customers, and constantly keeping them engaged. You do not want to drive them away. Satisfying free customers needs to be built into the culture, the very DNA, of these kinds of businesses. This is why Facebook and Google have been so successful. They put almost all of their energy into what they believe is the best search or social experience. Making money is almost an afterthought. “Keep the users happy and the paying customers will come.”

Selling analysis, on the other hand, fundamentally conflicts with free-based business models. In order to sell analysis, you have to market… precisely to those people who you enticed to join for free. With BI, it has started to show.

Their daily newsletters (and secondary daily charts) not only are overloaded with advertising for their paid products; the lead article has become a shill for a paid product! Thus, the headline appearing in your email alert and the subject line in your inbox (not to mention tweets) have become nothing more than spam. Sure, some people are willing to wade through the garbage to get to the jewels – I do so every few days, where I used to ready every article daily – but if your customers have to think twice or work hard, you have lost the game.

BI needs to decide if it is a paid market analysis firm or a news site with public analysis. It then needs to drive that into the culture of the company and direct every activity around it. I hope it succeeds. If not, it was great while it lasted.

Why Didn’t Google Develop Evernote?

October 27th, 2014

Evernote and its competitors have been quite successful at helping users keep track of information. A major use case is Web pages. You find a Web page you like, but want to keep later for reference. Perhaps it is a reference manual to your car; maybe it is an API for the development language you are working on; it might be 5 interesting articles on educational theory.

Whatever it is, you have a need to hold on to certain Web pages and their context for some period of time beyond the next 1-2 hours. You have 3 options:

  1. Keep the browser windows open for a really long time. Many do this, but it is not practical over the longer term. First, you lose context and notes. Second, it clutters your workspace and uses up computer memory. Third, the first browser close or shutdown will have you lose the sites.
  2. Go back to Google and search again. This works, often, but again loses the context. Often if you use slightly different search terms, you get significantly different results. What if you cannot even remember the search itself?
  3. Write them down somewhere. Many use Word docs, Stickies or similar all-purpose writing applications. These, too, however, lose much context and are somewhat difficult to work with. They are a little too all-purpose.

Since 1 & 2 are not ideal, and 3 is weak, along came note-taking apps.

The interest question is, why didn’t Google develop Evernote or similar? It had the eyeballs of everyone searching; I would wager that upwards of 90% of all information stored in these apps – and 99% of all Web pages – began as a Google search. Truth be told, if I were looking at writing such an app in the market’s infancy, I might have shied away, expecting Google to run with it.

I believe the major issue here is culture. Google is, first and last, a search-ad business. Sure, it has Android, which is largely a defensive play around its search business, and it is a few other elements, but Google’s core is, and probably always will be, search ads. Further, I strongly suspect a large number of searches are “repeats”, users who come back and search for the same thing again.

Thus, it is strongly in Google’s interest not to have users take notes. They would far prefer to have users come back and search again. I could envision the following conversation inside their corporate offices:

You know, 60% of our users come back and search for the same thing again.

“Really? That is great! Repeat business.”

We could make their lives easier by creating some sort of storage engine for past searches. Even keep it offline in their mobile or desktop. That way, they wouldn’t have to come back to use again. Wouldn’t that help them?

“Them? Sure. But you just said 60% of our searches are repeats. Do you want to cannibalize 60% of our revenue?!? Let’s help our users, but not by killing our business!”

OK, fine, I thought it would be great….

Somehow, I doubt it was quite that blatant; perhaps no one even thought of note-taking and search storage. But perhaps they did.

Either way, this is one of the key lessons of competing with larger companies. If they have a strong cultural incentive to stick with the status quo, it is highly likely that they will not compete there, even in the face of strong competition. Of course, this is not new. This is a key element of Christensen’s “Innovator’s Solution”: go where the big players cannot.

Web vs Apps, Year 4

October 24th, 2014

Today, BusinessInsider – about whom I should write more, as their “Top Stories” have become more sales promotion and less news, and thus I look forward to receiving their updates less than I used to, but that is for another day – published a piece by Alyson Shontell about the future of mobile apps. In short, they see mobile apps migrating towards the Web, with native apps more like bookmarks or small content holders.

I have been writing about this topic for some time, mostly from the perspective of the vendor’s, or development, cycle. I first approached this from Apple’s incentives perspective back in March of 2011, then again from the customer and developer perspective in January of 2012. Shontell, on the other hand, approached it from a market approach. With 500MM+active Websites, there just isn’t enough screen real estate, even on the iPad 18 Plus Plus Plus, for even a tiny fraction, less than 1%, of those sites/applications.

To their credit, I suspect Google and Apple have been (at least subconsciously) aware of this for some time. Each is trying to get you to go through their search or similar apps, so you “only” need a few apps, which will help you get there. Each has their own motivations:

  • Google: Google earns its revenue ($16.5BN last quarter alone) off of advertising to people who search on the Internet. Essentially, their acting as a gateway to, well, everywhere for billions of users is what gives them prime position to sell advertising space. You as the user don’t need to know every page that has “instructions for knitting a blanket”, since Google will take you there. You don’t even need to remember most URLs. I would suspect that “return” or “repeat” searches are as valuable to Google as new searches, if not more so. If that assumption is correct, then apps like Evernote represented a serious challenge to Google. Why they were culturally incapable of developing it on their own is a story for a follow-up.
  • Apple: Apple is (or should be) as afraid of the Web as Microsoft was back in the 1990s. One could argue that the Web was the single biggest enabler of moving beyond Microsoft Windows. Entire *aaS industries simply could not have existed without the Web. If the mobile platform becomes nothing more than, well, a platform, the Apple ecosystem becomes much less valuable. Some people will always prefer the fancy hardware, but, as Apple’s ads tout, hundreds of millions of apps in the ecosystem, and the best and first ones at that, are of enormous marketing value.

It was always possible that other dynamics would drive an extended stay in native mobile apps, but the issue appears to come back again and again. In short:

  • I believe developers do not want mobile apps, but are working with it.
  • Corporations absolutely prefer the Web, for reasons of management control, costs, and the ability to speak directly with the customer, i.e. not through the gauntlet of Apple’s App Store or Google Play.
  • Customer want it, although to a lesser degree.

I like Shontell’s perspective, since in the end, the market always decides. Does the real estate matter? That, in the end, is up to the customer.

Know Your Subject

October 22nd, 2014

I have made my share of embarrassing faux-pas, saying the wrong thing, pronouncing a word the wrong way. But when I put something in writing, I try very hard not to make silly mistakes. That includes knowing my subject well.

Here is a quote from a recent BusinessInsider article on how hackers work. In case it get taken down, it is reproduced here:

One way people make themselves vulnerable is by having a weak password. Some hacks are group-force attacks that use publicly available data to hit servers with different password possibilities. People who use obvious passwords are “basically leaving the key to their front door under the doormat,” Ricotta said.

“Group-force” attacks? Is that some new methodology wherein we guess the names of your Facebook or Google groups and try them as passwords? Or perhaps we join the local book club (“group”) and then beat up the user until they give us their password (“force”).

I get mistakes and typos, but confusing “group-force” with “brute-force” is just sloppy work. One of the reasons I read the Wall Street Journal over the New York Times – among many others – is that the editing in the WSJ is of a much higher quality; sloppy mistakes slip through much more rarely.

If you are going to write about something, at least research it?

The Not-So-Simple SIM Card

October 21st, 2014

The SIM card in almost all of our phones is a tiny smartcard, a computer, that enables your mobile device to connect somewhat securely with a wireless carrier.

In the old days of mobile, there were 2 major competing technologies – GSM and CDMA. Most of the rest of the world went GSM; the USA went mostly CDMA. Unlike GSM, which had a SIM card, and thus could have (unlocked) phones switch carriers simply by switching cards, Americans bought their phones from carriers, and closely affiliated the phone with the carrier. You didn’t have “a Motorola phone that is on the Verizon network”; you had “a Verizon phone.” Period.

Two forces contributed to the growth of SIM cards in the US over the last decade:

  • GSM: Originally just a few smaller carriers like Omnipoint used GSM, but eventually major carriers switched. This in itself was driven by the rapid development of the technology overseas.
  • iPhone: This was the first phone that was not one per carrier, but one phone across all carriers. Sure, there are some minor differences between the models and the networks they work on, but they are still just the iPhone.

As a result, people around the world have a SIM card and know about it. Most, however, do not think about it much. You switch carriers once every few years, and you probably switch phones with the same frequency. You might know about the little card in there, but it is out of your normal awareness. Those who live close to national borders, especially Europeans and some Asian residents, might think about it a bit more, but not that much.

On the other hand, regular business travels think about SIM cards regularly. The combination of prohibitive roaming costs and the need to “appear local” with a local number when in-country means unending strategies for managing multiple SIM cards. Personally, I carry 4-5 whenever I travel; I know of people who carry many more. Other business travelers actually maintain multiple phones, or even smartphones, and carry them on their person when they travel. Regularly commute between the US and UK? No problem. One iPhone with an AT&T SIM in it at all times, another with a EE SIM in it at all times.

Besides the space and organization, each SIM card requires filling up with prepaid funds (or maintaining a more expensive ongoing plan), and most importantly means the number on a card not in the device right now just doesn’t work, at least until you switch it back.

Two key factors prevent this whole mess from going away, both part of legacy carriers’ business models.

  1. Roaming: Carriers make a lot of money on roaming. There may only be a few stories of accidental $5,000 roaming bills, but even small amounts per month can add up to a lot of money across many users. The sad thing is that the incremental marginal cost of roaming over a normal local user is nearly zero, especially for data. The T-Mobile Germany user roaming in London on EE accessing 5MB of data from his iPhone cost essentially the same as a local EE subscriber.
  2. Customer Lock: How do you authenticate to your bank? Some combination of username and password, maybe two-factor like SMS (side-channel) or Google Auth (TOTP/HOTP). How about your corporate VPN? Something similar, perhaps using an RSA keyfob, which is essentially the same. There is nothing more secure or special about a wireless network that it requires a special postage-stamp-sized computer inserted into your phone to authenticate. The only reason the SIM card is there is to keep you physically hooked to the carrier.

There is nothing in the field of technology or security or risk-management that requires a SIM card for connecting to a mobile carrier; it is only carrier legacy business models.

A few years back I explored the possibility of a multi-country wireless carrier. Buy one SIM card, and add numbers from multiple countries using an app or the Web. The key is that in each of those countries in which you have a number, you are not roaming, you are native. Have a +44 UK number and +1 US number and +972 Israel number? All three will ring on your phone wherever you are, your outgoing caller ID will be the local number based on the dialed number (+1 to US numbers, +44 to UK numbers, +972 to UK numbers), and you will pay no roaming fees in any of those countries in which you have a number.

Turns out the capital to build such a thing is quite large. Negotiating rights with existing carriers and local governments requires many millions just in licensing fees and large-scale commitments. I would love to be able to “kill the SIM” card – I don’t use one on my laptop to connect to a VPN or bank, why should I use it for a mobile carrier from my smartphone? – but it requires too much capital for a small startup.

But it isn’t too much for a large company with an innovative track record.

That, I believe, is where Apple’s latest (quietly released) feature of the iPad Air 2 and iPad Retina Mini 3 could be heading. Apple recognizes that mobile iPad use depends on ease of use, not just of the tablet itself, but of the services connecting to it. Remove the need to switch physical cards to switch carriers, and users will use more of it.

In the future, I hope we will see them take this approach to killing the SIM card entirely on its phone line. Where they go, the others follow. It would be nice to see the days of phone-SIM-carrier integration finally loosened.

Incredible Shrinking Bluetooth Car Adapter Market

October 20th, 2014

I drive a several-year-old car that came with no bluetooth integration. When we bought it, it mattered, but only a bit. Since then, all of our audio and video have become digital, and we have multiple bluetooth-capable mobiles with us on a regular basis. Bluetooth has come to matter much more.

Unfortunately, the design of our dashboard, like many cars in the last ten years, makes replacing the radio extremely complicated. Rather than the standard single-DIN interface, it looks something like the following photo (not of my actual car). The radio is right above the gearshift.


Notice how the radio has a very strange faceplate style.

A few years ago, I even bought a nice JVC after-market head unit to install, only to discover that I simply could not get it in. So I put my nice JVC in storage, went to my fallback and looked for aftermarket bluetooth adapters that could stream audio through the car’s speakers for phone calls and audio. Unfortunately, pickings are extremely slim. I ended up buying a Parrot mki9100 with a standard ISO wiring adapter, and a proper harness to connect it to my car’s wiring.

Over time, I have explored the car audio market, as the lack of aftermarket has always seemed interesting to me. Apparently, there are very few manufacturers of “integrated Bluetooth adapters” that allow one to play music and do phone calls through the car’s audio infrastructure. Initially, as Bluetooth became widely available on phones but auto manufacturer radios were slow to adapt, a number came to market. But over time, the costs of the units plus installation came close to the cost of just buying a better-than-original aftermarket audio unit from the likes of JVC/Kenwood, Pioneer or higher end Alpine. So most consumers either left it as is, or bought aftermarket car audio systems, rather than integrated Bluetooth adapters.

Finally, car manufacturers, slow to respond but responding eventually, began to integrate Bluetooth and even multimedia capabilities into their manufacturer original units. As the gap between original units and aftermarket units shrank, and Bluetooth became integrated on all of them, the market for integrated adapters became almost unsustainably small.

In response, the number of providers has almost disappeared. Only Parrot remains in business. Motorola, Sony, many others created integrated adapters, and then let them wither on the vine.

A niche market filling in a need can be a good market… but only for a few years. It is great to use as a springboard into adjacent markets – in our example, becoming a primary manufacturer of Bluetooth components for aftermarket manufacturers or even OEM supplier of multimedia components to car manufacturers – but the transition must be quick, or one will be squeezed on both ends.



Qik or Slow?

October 17th, 2014

Messenger apps have been all the rage in the last few years. iMessage and WhatsApp and Google Chat and Kik and Skype so on. This has been distinct from real-time or synchronous conversation, which started with the phone, and moved to more modern options, some of which are closely related to messaging, such as FaceTime, Skype, Google Hangouts, etc.

Now, apparently, “Skyperosoft” is looking for its next big growth area, and wants into the multimedia messaging game. Skype already does real-time voice and real-time video in addition to chat – indeed, it was one of the very first in all of these markets; I have been using Skype for over a decade now, since shortly after it was available (first public beta was released in the summer of 2003).

Yet, someone at Skype feels it has the mantle of “last decade’s technology”, a has-been. It is missing the now-hot market of video messaging. Unlike video conversations, which are real-time and usually person to (multi-)person, video messaging involves recording short clips of video and then including them as part of a conversation.

Technically, the difference between the two is minimal. After all, video messaging and Skype are very similar. Skype even allows one to attach a photo or video – or take a video – using your iPhone or Android (probably Windows Phone as well, although, ironically, Skype features on Windows Phone have lagged behind iOS and Android since the Microsoft acquisition). Just click “Attach”, and either “Choose an existing photo” or “take a new photo/video” and it will become part of the chat conversation.

However, Skype felt a need to release a new app, presumably for one or both of two reasons:

  1. Context: The photos and videos primarily exist outside of the Skype app. Once I already take a video outside of Skype, I have no need to go back to Skype to use it; I can send it using iMessage, Google Chat, WhatsApp or any of a dozen other apps. Further, each major platform has its own default app that receives prominence of placement – Chat on Android, iMessage on iOS – none of which is Skype.
  2. Perception: Skype is perceived as older, a more dated app, despite it being the near-universal app. It has identity beyond your particular mobile (WhatsApp’s simplicity and Achilles heel); it is completely cross-platform (iMessage’s weakness); it does not make its money from reading your conversations (Google’s problem); it has all forms of communication in a single app; it has a broad base of users.

Does Skype actually need a new app to combat the above? Probably not. More likely it will confuse and cannibalize its existing app, which may weaken the Skype brand overall.

Microsoft is a solid company with a long track record of making a lot of money by fulfilling basic computing needs for individuals and corporations – Office, Windows, Exchange, Outlook. None of these is exciting, futuristic, innovative, but all have been solid moneymakers for decades. In most cases, when Microsoft has tried something radically new and different, it has fallen flat on its face. Skype under Microsoft is trying to behave in the same way.

Could Skype reinvent itself by having tighter video messaging integration and easier use? Definitely. Will it succeed by breaking that functionality out? Probably not. But at least they are trying.

It’s Not Your Competition… It’s You

October 15th, 2014

If your business gets killed, don’t blame the competition; it’s you.

If your industry is upended, don’t blame the competition; it’s you.

Back in the late 90s, partners and I founded 2 start-ups.

  1. The first – electronic transcripts in the Web’s early days – died in its cradle, when the big gorilla in the industry indicated it was going in that direction. In retrospect, letting our startup go was a mistake. It took many years for electronic transcripts – think of them as secure academic wire transfers – to take off, and there is still plenty of room in that industry, over 15 years later. It wasn’t the big incumbent that killed it; it was our misreading the situation. We simply did not yet have the experience in strategic marketing to understand what was going on.
  2. The second – mobile Web for devices that ran on GPRS with tiny screens – lived somewhat longer, and then died. Officially, it was the result of the horrible market in 2001; nearly no one could raise funds, and we founders had families to support. But it was at least as much the result of mistakes we made. Everyone makes mistakes, so I don’t feel too badly, and I am unlikely to make the same mistakes twice, but the market only provided the challenging environment; we were responsible for its demise.

I was reminded of my own past when I watched the interview of Finnish Prime Minister Alexander Stubb on CNBC. PM Stubb says that Apple killed Finland’s 2 big industries, its “national champions”, and is thus responsible for its recent downgrade.

  • The iPhone devastated Nokia, whose once-dominant phones looked ancient overnight. Nokia tried to but simply could not catch up.
  • The iPad took a hatchet to the paper industry. Many will say it is very good to use less paper, but when you do, major paper manufacturers are going to suffer.

Is the Prime Minister correct that the iPhone and iPad have severely hurt Finland? Of course he is, but only in the proximate sense. Apple could not have done so without Nokia and the paper providers leaving the field open to innovation that could do them so much damage. Despite being somewhat (paper) or very (Nokia) high tech, these companies – the industry as a whole – acted like the world would remain unchanged or, at best, change at the pace they set. The parties responsible for the companies’ damage were themselves.

But in an evem deeper sense, the damage is the responsibility of, well, Finland. By tying its economy so closely to a few industries and a few “national champions”, Finland, with national resources unavailable to most private companies, was able to give a leg up to those same champions for quite some time in their industries, as long as the industries were not fundamentally changed. The moment that a truly innovative competitor came along, they didn’t have a chance. Their being “national champions” hamstrung them in their ability to be flexible and respond.

I certainly feel badly for the Finns. But the interview itself shows that the Prime Minister still sees Apple, not Nokia or Finland’s policies themselves, to blame.

Somewhere in the borders of Finland, new competitors in existing industries, or possibly even new industries, are waiting to provide the next generation of Finnish strength. But it will only come when Finland allows and helps them to grow and innovate, rather than shed crocodile tears over its once-glorious past.

Donations Are Sales and Other Charitable Marketing

October 13th, 2014

In the USA, when someone needs a medical device – wheelchair, crutches, etc. – one buys them from the local drugstore or supplier via insurance. Many of these can even be found on Amazon. With one-day delivery and Amazon Prime, it often pays to order from them rather than buy at the local supplier. When you are done with it, you sell it. Even though they don’t market this are too heavily, eBay has 32,000+ active listings for wheelchairs alone!

This may keep things simple – get everything from your local drugstore or doctor and bill the same insurance – but it is pretty inefficient. After all, most people don’t need the wheelchair, crutches or other device for more than a relatively short period.

Israel’s market is a little different. The Israeli HMOs do not pay for these devices, unless they really will be used for a very long time. Instead, a local non-profit called “Yad Sarah” loans just about every reusable medical device available under the sun to any citizen or resident. Yad Sarah has offices across the country.

Of course, borrowing a $200 wheelchair runs the risk of it never being returned, or perhaps being resold. When your cost is near-zero, why not sell it off at any low amount?

To improve its return rate, Yad Sarah takes a deposit equivalent to close to the full value of the item. It is simple, just swipe a credit card, they will take off $25 for those aluminum crutches or $140 for that super-adjustable wheelchair, and when you return the item, they will refund the money to you.

But Yad Sarah is a donations-driven non-profit, which needs to maximize its donations to keep operating (and running its beautiful facilities).

Of course, Yad Sarah does the usual mail and phone campaigns, but this organization has the particular advantage of interacting with potential donors at 2 moments: pickup and return. It has 3 choices as to how it can request donations.

  1. Sell the items: Well, it could, but it would violate its non-profit mission, and likely bump up against retailers and importers who could sell items for cheaper. When I broke my ankle, the deposit for crutches with Yad Sarah was more than the crutches cost on Amazon.
  2. Ask for donations at the time of loan: It could do this as well, but it is the worst time. People already are calculating the cost of purchase vs loan with deposit. In addition, at the beginning of an injury cycle, doctors’ bills, surgeries, lost wages are all ahead, along with current pain. No one wants to give now. So make people give a deposit, but make it clear that it is refundable.
  3. Ask for donations at the time of return: By the time of return, people are feeling better, most of the pain and cost is in the past. Religious feeling and goodwill are particularly strong after recovering from illness or injury. But most importantly, the person has already paid the credit card bill. If the deposit was $100, that amount has been written off. The return of $100 feels like a bonus.

At the time of return, Yad Sarah personnel are trained to ask, “do you want to leave some or all of it as a donation?” The very symbol of illness and injury is being stored away; work is returning to normal; you feel good and you get some almost unexpected funds to boot. Who wouldn’t want to give at that time?

Asking for donations is selling something, in this case a good feeling and tax receipt as opposed to a tank of gas or a smartphone, but a sale nonetheless. Successful sales are about packaging and timing the sale in just the right way.