Monthly Archives: October 2011

Accountant’s Magic – NBA Style Pt. 1

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Recently in class and in the tutorial section, we have talked about financial accounting and how a company’s financial report can be misleading. I immediately related the topic to my “beloved” NBA and the teams’ infamous profitability to avoid tax.

“Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and I could get every national accounting firm to agree with me.”    – former Blue Jays VP Paul Beeston

First trick is the RDA, Roster Depreciation Allowance(see article). Introduced in 1959, the allowance argues that players are a depreciable asset once they are paid. Indeed, a 35-year-old player’s value might be decreasing over time, but there are young players who might develop multi-million values in a short span of time. This is their own personal earning power change, not the teams’. The trick is to list both player salary and RDA (loss on players’ contracts) as operating expenses. Well, if the team spent 50-million on players, the maximum loss would be 50 million, which is the worst case scenario that all of them got permanently injured and cannot play. However, under the RDA, the team can post another 50-million-dollar loss in this case, and the total loss suddenly become 100 millions, and that is significant.

So , when you see a sports’ team losing millions of dollar for more than 5 years, you might have to wonder why they can keep operating normally. Of course, it’s the “love for basketball”, the owner might say.

“If buses come on-time, they won’t be called bus”

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The bus is late, yet again, big surprise. How often do you stare at a bus schedule attached at the bus stop and wonder if it is just a joke from the very beginning?

The city of San Francisco is about to have a change with its troubled public transportation system, and a simple technology, Open Data, can help its cause.

Commuters in SF are now able to receive realtime updates on their phones through apps and SMS, which provide far better predictions of the arrival time of the buses. As you may note, Translink also has apps and SMS functions, but it only gives you the scheduled time of the next bus, and 99% of the time it is inaccurate.

Not only the buses are nearly impossible to track, Skytrains share the same characteristic. It is impossible to know when the next train will arrive, and which line (Expo or Millennium) until the very last second when you actually see the train. This troubled commuters to efficiently plan their schedule and be on-time.

This is a excellent example of how IT Technology can help the business. It is bizarre to know that simple technologies can improve our transit system by miles, however, nothing is being implemented to make commuting more convenient, and Translink still wonders why people drive instead of ride?

When I was in Taiwan, the informations of the next 2 trains were clearly displayed without sacrificing the advertising ability (Taipei Metro)

 

Old school but serve the purpose, I was in Germany and they have these, also clear and informative (Berlin U-Bahn)

Skytrain Display

Thanks, weather reports really help when I can just look outside for myself (Vancouver Skytrain)

Mr. salesman, what keeps you awake at night?

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What kind of salesman do you absolutely dislike or just find them unconvincing? How many times do you have absolutely no clue what the salesperson is actually selling?

According to the Sales Executive Council research chart below, there are mainly four parts to customer loyalty, company and brand impact, product and service delivery, value-to-price ratio, and sales experience, and sales experience contributes more than half out of the 4 drivers. To analyze further, we can see that the most important aspect of a sales business is the human connection.

Want a customer to come back? Don't give them great deals, give them a great experiences

One of the standard textbook tactics for a salesperson is to identify the customer’s need, and offer solutions accordingly to their problems. Ironically, most customers’ “need” is to figure out what they need. The assumption that customers know exactly what they want is false, and if they do, they do not need a salesman. Rather than asking the customers what they need, it is better to tell them exactly what they need in a professional manner. This way, the customers are more likely to trust the salesperson, and go ahead with his suggestions, rather than being creeped out by the question “what’s keeping you up at night?“

Businesses starting to review their “coupon marketing”

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As the economy recesses, “Coupon Economy” has become a trend amongst shoppers. A new term, “Extreme-Couponing“, was created, and refers to people who would not consume unless they can get discounts or bonuses from their collection of coupons. This action, however, alarmed the businesses that they might be throwing away money and receive no return from these coupon hunters. The creation of group purchase sites like Groupon and coupon-sharing websites like RetailMeNot did not help the cause either.

Coupons used to encourage customer loyalty, but with these extreme couponers, it is practically impossible to gain any profit. The exploitation of the coupon forced the businesses to rethink their approach in order to establish customer loyalty. In this internet era, it is easy for consumers to share and spread the “love for coupons”, therefore businesses would definitely need to change their marketing strategy to avoid low-yield customers.

This showed that in the field of business, there is no permanent, golden rule or tactic that will apply universally and forever. However, the age of coupon is not over yet. The key is to fully evaluate the customers, create a formula to encourage spending with coupons, and ride the trend to the top.