Interstate 10 in Los Angeles might be aflame, but you know what’ll make your commute really fire? The Builders from business.com podcast! (Don’t worry, we checked that nobody was injured before making that joke.)

Today’s conversation is with Joanna Swash, Group CEO of Moneypenny, on customer service and retention — plus, we’re discussing Airbnb versus hotels and how to give constructive feedback. Watch the episode on YouTube now.

Formula One: It raised licensing fees too fast, too furiously Ring: Does your security camera have any UFO footage?

Big Vape: Why Juul went up in smoke

(Source: Shutterstock)

This week, Formula One wants everyone to know what happens in Vegas.

For the sport’s inaugural Las Vegas Grand Prix, which starts on Nov. 16, a street circuit will run through the Las Vegas Strip. Organizers are expecting an average of 105,000 spectators per day, including a crowd of 30,000 for opening ceremony performances from will.i.am, the Blue Man Group, and Cirque du Soleil.

But building new partnerships for the event hit a bump in the road. Formula One’s initial licensing fees for venues with unobstructed views of the racetrack were exorbitant: Organizers charged these venues $1,500 per head, totaling up to $3 million for larger venues. After receiving significant backlash, Formula One lowered the licensing fee to a flat rate of $50,000, a gigantic concession.

While Formula One is known for dramatic speed, it would have served them in this case to slow down. The fiasco shows what happens when businesses try to set their prices beyond what the market can handle.

Some companies meet this challenge with success. Chipotle, which has raised prices four times in two years, saw a 13.6% increase in 2023 Q2 revenue and 11.3% in Q3; Disney, meanwhile, boosted prices for its multiday Park Hoppers and annual Disneyland passes, and YoY revenue went up 17%. These companies distilled the ahem, formula, for effectively raising prices while still maintaining and growing clients and customers. 

The difference? Formula One was entering an entirely new market, making unrealistic demands of Las Vegas venues without a local track record. However, Disneyland could justify price increases to its loyal audience with promises of updated park features. When building relationships, transparency is key in helping others understand why steep prices may be in place.

Formula One could have instead led with a penetration-pricing strategy of setting lower initial licensing fees — and only raising them after building trust. Or the event organizers could have scaffolded the cost for neighboring venues to provide additional benefits rather than treat the fees as a punishment.

In other words: Slow and steady wins the race.

🤿 DIVE DEEPER  

• Choosing the Best Pricing Model for Your Business: License vs. Subscription
• Will Charm Pricing Work for Your Business?
• The Game of Pricing: How the Number 9 Affects Purchase Behavior

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(Source: Ring)

Between congressional extraterrestrial hearings and NASA’s first UFO report, ETs are having a moment. And marketing teams love moments.     

Enter Amazon’s Ring with a galaxy-brain take: your Ring security camera isn’t just for notifying you whenever your neighbor orders a pizza; it could finally capture authentic extraterrestrial footage. And if so, they’ll pay you a million dollars for the doorbell-cam “scientific evidence” (their words), to be judged by a “space and extraterrestrial expert” (we hope it’s the Ancient Aliens meme dude).

But don’t worry, conspiracy theorists: those who submitted the most creative fakes — entries have closed already — can also win $500 in Amazon bucks. Even if the truth isn’t out there, it’ll help pay for your Christmas shopping.

(Source: Netflix)

As a startup, Juul originally sought to “improve the lives of billions of smokers” by providing a less harmful alternative. Soon they’d cornered 70% of the e-cigarette market with a $38 billion valuation. They even turned down Big Tobacco’s money, positioning themselves as a responsible underdog.

But as Netflix’s new docuseries Big Vape: The Rise and Fall of Juul recaps, executives pivoted Juul’s focus away from health and (*cough cough* allegedly *cough cough, is it smoky in here?*) toward teens who loved its candy-flavored clouds. The tragedy is, this doomed rebrand wasn’t even necessary; Juul would’ve remained profitable as a cigarette alternative for adults instead of a fashion trend for kids.

(The good news? That trend seems to have passed.)

By straying from its mission-driven foundational ethos — and eventually selling out to Marlboro’s parent company — Juul invited billions of dollars worth of legal woes. It also lived just long enough to see itself become not just the villain … but the villain’s henchman.

Juul didn’t get it right, but you can. Learn when and how to rebrand your business. 

“Once, an executive asked us to source a rare tropical plant to brighten up their office space. It proved to be a mini-adventure as we reached out to various nurseries, botanic gardens, and even a university horticulture department.” 

—Anonymous

Written by Sasha Rosenberg and Dan Ketchum.