Yes, Numbers Do Lie.

“Numbers don’t lie” is what people say when they defend their faulty logic. Their math is always flawless. The problem is that they gathered the wrong numbers.

But the wrong numbers always look so right.

Wizard Academy teaches its students to gather different information and use it to make different decisions. This is what we mean when we say Wizard Academy is a nontraditional business school.

Let me give you an example:

Half the people in town live north of the river. The other half live south. People rarely drive across the river to go to a restaurant. Everyone stays on their own side.

The people north of the river are better-educated and own higher value homes. In fact, 64 percent of all discretionary income resides in the pockets of people north of the river. Only 36 percent of discretionary income is to be found down south.

You’re planning to open a cloth-napkin restaurant. Where will you put it?

If you said, “North of the river,” you instinctively used traditional logic to come to the same conclusion as the previous 99 people who opened a new restaurant in this city. As a result, you’re 1 of 100 restaurants fighting over 64 percent of the cloth-napkin dinner dollars.

If you get your fair share of the market potential, you’ll be forced to subsist on 0.64 percent of the cloth-napkin dinner dollars. Meanwhile, the 9 upscale restaurants south of the river enjoy long lines and are making huge profits. You could have been number 10 but you were seduced by the wrong information. So now you’re living on 0.64 percent of the dinner dollars in this city when you could have had a waddling 3.6 percent if you had only opened your restaurant down south. (A “waddling” profit is so fat it walks like a duck.)

You assumed higher-income people buy cloth-napkin dinners more often. But you were wrong. Those people live in more expensive houses, drive more expensive cars, shop in more expensive furniture stores and pay higher taxes but they don’t buy cloth-napkin dinners any more often than we “poor” people down south.

You focused on an illusory target customer when you should have been gathering data on the actual competitive environment. Instead of asking, “Where do the people with money live?” you should have asked, “Where in this city are restaurants like mine doing far more business than they should?” The answer would have rung like a bell: “Down south. Down south. Down south. Down south.”

Your choice of Competitive Environment is at least 20 times more important than your selection of Target Customer.

That example wasn’t imaginary, by the way. The city is Austin, Texas. 

Measurement and the Mind – Oct. 12-13 – is going to be a fabulous class. Take a look at the course description and you’ll immediately see why I’m the lightweight speaker in the group.

During my short session I’ll explain in detail the dangers of using traditional cost-based accounting to make decisions about marketing. Calculating the purchases of your “average” customer is always a mistake but most people do it instinctively. Come to this class and I’ll give you a much better metric to monitor. Likewise, I’ll show you the hidden dangers of calculating Gross Impressions, Gross Rating Points, Cost Per Point, and Cost Per Thousand when making marketing decisions. And no, I’m not advocating a psychographic “target customer” approach to choosing your media. I’m simply going to give you a different equation for calculating the most efficient media plan.

Like I said, I’m the lightweight in this group. The other 4 speakers are power hitters who can whack the ball over the centerfield wall, completely out of the ballpark, where it will roll across the parking lot and finally come to rest under a black Buick on row L-17.

Change your plans. Come to Measurement and the Mind. You’ll learn things that will make a monster difference in your business.

Whack! There it goes…

waddle-waddle-waddle.

Roy H. Williams