Brand Autopsy

Street Corner Selling Lesson #7

Today’s topic is: Developing Enthusiastically Satisfied Customers - PART 2

“No interest till 2005!” “No payments till 2005!” “Zero down, no interest.” “No credit history? – No problem.” These are common sales tactics used by high-ticket retailers in fields as varied as electronics, furniture, and cars.

Retailers selling high-ticket goods have seemingly become addicted to extending generous credit terms to consumers to secure a large dollar purchase.

The automobile industry got hooked on “zero down, no interest” deals following 9/11 in an attempt to arrest dismal sales. It worked. But, it may have worked too well. It has been over two years since the car dealers began offering car buyers lenient credit terms and it appears that they have become addicted to “zero down, no interest” deals in order to drive comp sales. These sweetheart deals are still widely used by car dealers. Some have gone so far to say that these generous credit terms have become the “crack of the car industry.”

Speaking of crack, street corner sellers have found that extending credit to buyers is a way to not only drive sales but also to develop enthusiastically satisfied customers. Dealing Crack author Bruce Jacobs tells us more.

In the world of street crack… extending the right amount of credit at the right time can forge brand loyalty and be profitable at the same time. Several sellers reportedly timed their [credit] offerings to coincide with the last week of the month, so that memories would be fresh when money became abundant the following week.

“Yeah, I give credit like around the first – if you know them and know they’ll come back. When they get their [public transfer] money, they gonna come back and spend it with me,” explained Benzo (street corner seller).

Offering credit could mean a real windfall, particularly of customers made their repayment along with an additional (and perhaps quite large) purchase. Although Fade (street corner seller) emphasized the importance of extending credit only to “specific people that won’t play with your money.”

Interest rates varied by the offender and were usurious to say the least – from the more forgiving sum of $5 a day on a $20 rock to a mafia-esque 100% - regardless of the amount involved – to be paid the following day or week.

No matter how exorbitant the interest, those caught in the throes of an all-consuming addiction, without sufficient funds to continue using, may view getting crack on credit tantamount to getting crack free. Immediate gratification is essential and can occur at the expense of rational thinking.

Street Corner Selling background reading
Lesson #1: Customer Acquisition
Lesson #2: Ten Minute Rule
Lesson #3: Procurement
Lesson #4: Merchandising
Lesson #5: Angel Customers and Demon Customers
Lesson #6: Developing Enthusiastically Satisfied Customers

Street Corner Selling – Lesson #6

Today’s topic is: Developing Enthusiastically Satisfied Customers

Businesses that focus on cultivating enthusiastically satisfied customers will typically generate a loyal customer base that will gladly refer that business to their friends and family. Drug dealers must also develop enthusiastically satisfied customers because nearly all of their sales growth is tied directly to customer referrals.

Bruce Jacobs furthers this thought in his book, Dealing Crack.

In the world of illicit street drugs, the mythic importance of a good connection cannot be overstated. Most people involved in the generic process of purchasing want the most and best product for the least amount of money, and crack buyers evaluate dealers by seeking out those who are perceived to offer the best deal.

A number of sellers attempted to target their market strategies accordingly. Selling the fattest stones, offering more product for the money than was customary, and giving credit were all geared to entice customers to seek them and them only.

“The bigger ones [rocks] you serve, the more customers you get. You don’t gotta worry about no one else getting’ the sale because they [users] want you.” Bo Joe - street corner seller

“You give’em more than what you should because they look at their competitors and know that ain’t what so and so gave me [last time].” Ice-D - street corner seller

“Everybody try to keep they own clientele. Homie spoiled a customer so much last night, he don’t wanna deal with me – only him." Duece Low - street corner seller

Providing fat stones may hook customers into buying from a particular seller, but smaller quantities – provided sometimes at reduced cost or free of charge – keeps the addiction going. Cultivation is arguably most effective (and most appreciated) when users are at their height of desperation, In the twilight of a binge, for example, even the most meager form of generosity can look colossal and reflect positively on the dealer who is “compassionate” enough to offer a free or cut-rate nugget.

“When a customer’s geekin’ … I’ll break off some pieces like give’em a fifteen for a ten, or a ten for a five, or just break off like two and three dollar pieces. I kinda feel guilty – know that they got kids. So I don’t be taxin’ like that. You’re gonna lose money, but you're gonna keep your clientele. You know they get paid at the first of the month, and they gonna keep spendin’ with me [because I did that for them]. I’m true to the smokers. That why my clientele be so high.” K-Rock - street corner seller

Street Corner Selling background reading
Lesson #1: Customer Acquisition
Lesson #2: Ten Minute Rule
Lesson #3: Procurement
Lesson #4: Merchandising
Lesson #5: Angel Customers and Demon Customers

Street Corner Selling - Lesson #5

Today’s topic: Angel Customers and Demon Customers

Sometimes your most loyal customers are not your best customers. Many business books from Angel Customers and Demon Customers to Driving Customer Equity have tackled the issue of how to select a company’s most profitable customer base and how to nurture a relationship with those customers to fully maximize sales. Drug dealers must do the same.

Bruce Jacobs writes in Dealing Crack about how street corner sellers in St. Louis would many times leave the gang-infested north-side of the city for highly profitable sales in the south-side.

Any opportunity to go south and sell to consumers who were not dependent on public transfer payments was welcome.

Jimmy Hat [street corner seller] claimed that every Saturday his brother would take him to the south side. He spoke highly of these sojourns, claiming that transactions there were for fifties and boppers [$20 rocks], that “there are a lot of people over there with more money to spend, and that police ain’t too hot.”

Jimmy Hat describe his strong desire to focus his selling efforts on the south side only, “South side, ohh man, I wish I could be there seven days [a week]! They ain’t comin with no five, ten dollars over there. They comin’ with twenty, twenty-fice, thirty, fifty dollars. Money be comin’ like this. I makes ‘bout eight-hundred fifty dollars [over a week] in the south side.”

Street Corner Selling – Lesson #4

Today’s lesson is MERCHANDISING

In Lesson #3, you learned how street corner sellers procure their product. In Lesson #4, we take a look at how drug dealers merchandise their procured product. As with the previous lessons, this inisght into the business practices of drug delears comes from Dealing Crack written by Bruce Jacobs.

After purchasing their “bundle,” the sellers package individual quantities for retail.

A bopper purchased wholesale (for $100), might be broken down into ten $20 rocks – yielding $200 in sales or double the investment. Quarter-ounces purchased wholesale (for $250) might be broken down into some combinations of fifties, twenties, and tens that equaled, when retailed, $500. Half-ounces purchased wholesale (for $500) might be broken down into boppers, fifties and twenties equal to $1,000 at retail.

The goal is to double one’s money. More often than not, this is a goal and nothing more. As K-Rock explained, “The only way to double your money like that for real is to sell twenties. You need twenty sales to make a straight profit.”

On the street, dealers confront desperate and financially strapped users wanting to “get over” – soliciting twenties for $12, fifties for $40, or tens for $3 or $4. Buyers would sometimes reportedly bring the full amount to a transaction and attempt to either hide this fact or more brazenly, ask for change from the dealers they were trying to short.

To maintain profit margins, dealers might bite open a baggie, break off the quantity requested, and sell the remainder later for its marginal value – or even at full price to some dupe. Breaking off pieces; however, is inconvenient, imprecise, messy (crumbs might be dropped, and time-consuming. In the meantime, a sale might be lost to competition or, worse yet, observed by police.

To avoid this, a small number of $5 and $10 rocks might be prepackaged. Such nickel and dime sales, however – referred to as “kibbles and bits” – were disliked. Like most merchants, crack dealers want to make the fewest sales for the most money.

Street Corner Selling background reading
Lesson #1: Customer Acquisition
Lesson #2: Ten Minute Rule
Lesson #3: Procurement

Street Corner Selling – Lesson #3

Today’s lesson is PROCUREMENT (“Copping One’s Supply”)

In business, procurement is the process of obtaining goods, services, supplies, and equipment. Once something is procured, it can be retailed. Without procurement, no business would be in business. Same goes for drug dealers -- without product to deal, no deal to be made. Bruce Jacobs writes in Dealing Crack about how street corner sellers approach the procurement process.

Customary purchases were fifties ($50 worth of crack wholesale, about a gram), boppers ($100 worth of crack wholesale, about ten $20 rocks), quarter ounces ($250 wholesale), and, less frequently, half-ounces ($500 wholesale). Fifties and boppers comprise the modal purchases and generally could be bought within the neighborhood.

Price and quality, though fairly uniform, varied enough so that sellers had an incentive to shop around. Convenience was overriding, but if individual sellers thought they could readily get a better ‘play,’ they would look for it.

As Prus (street corner seller) notes, buyers want a good product at a fair price, but “buying is far from a static or simple dollars and cents exchange.” It requires a degree of “reflective planning” and is “strikingly qualifies” by the activities of those whose services buyers seek.

Sellers typically purchase their supply already rocked up (prefabricated product). As Fade explained, “It’s best to get the shit hard. They [sellers] already know how much to put in of what – how to cut it up, how much water and all that.”

Though buying is always a gamble … procuring a prefabricated product eased sellers’ fears of being swindled. Nonetheless, inexperienced sellers benefited from bringing smokers with them to verify a purchase’s authenticity. More seasoned vendors did not bother with “tasters” because they were able to discern product quality by smell, touch, and sight.

Street Corner Selling - Lesson #2

Today’s lesson is the TEN MINUTE RULE.

Like many customer-service focused retailers, Starbucks has a standing policy that instructs their stores to open ten minutes before they are supposed to open and to stay open ten minutes after they are supposed to close. Implementing the Ten Minute Rule is a relatively easy way for retailers to surpass customer expectations and to get an edge against their competition.

Some drug dealers take a similar approach. Dealing Crack (Bruce A. Jacobs) tells us how street corner sellers apply the Ten Minute Rule to their business.

Sellers used a number of tactics to achieve “separation from the crowd.” The simplest method was to be out early and stay out late, monopolizing sales during inconvenient time slots.

“Best time to sell in the mornin’. Six, seven a.m. Ain’t got to worry about nuthin’ for real. No cats [rivals], no police trippin’ on you. They [police] think you are on your way to school.”
Skates - street corner seller

I like sellin’ late at night – three a.m. – ain’t nobidy out. The few car that do come through, they fixin’ to spend some money. When you see a car hit the corner, you already know who it is. Only a buyer … come through that late.
Fade – street corner seller

Late night, off-time sales also tend to attract the truly desperate crack fiend – one who probably is not able to spend a good deal of money or one who may ask for credit or try to pull a scam. Yet, given the fierce competition an stagnating demand, stray sales become more important than ever.

Street Corner Selling – Lesson #1

Over the next few weeks I will be sharing with you some illuminating insights about marketing and business through a most unlikely source – drug dealers.

The insights are from a book titled, Dealing Crack authored by Bruce A. Jacobs. The intent of the book was not to parallel street corner drug dealing business models with legitimate business models. However, when I read this book some years back, I couldn't help but draw the parallels myself.

Before you automatically dismiss this as outlandish and ridiculous – think for a second. Drug dealers must design their business in the same ways that legitimate businesses do. From procurement of product to making strategic real estate (location) decisions to acquiring customers … the parallels between street corner selling and running a legitimate business are endless.

As business practitioners, we can learn from our street corner selling counterparts.

Today’s lesson is on Customer Acquisition: Bum Rush and the Myth of First Mover Advantage.

In this competition (bum rushing), at least two sellers – but usually more – would make an entrepreneurial wind sprint to a newly spotted customer. Whoever arrived first would get the sale or, at least, would be in the best position to get it. The more desperate for money one or more sellers were, and the more of them convened in space and time, the more prone to bum rushing they appeared to become. As A-Train (street corner seller) put it, “It be like ants tryin’ to get a piece of crumb.”

Being surrounded by throngs of hucksters, all proclaiming the superiority of their product, spitting rocks into their hands, clutching rocks with a death grip, shoving each other out of the way, and jostling the buyer in the process, is no doubt disconcerting to the buyer. The buyer does not know whom to deal with, who is selling the real thing and who is not, whose rocks are the biggest, whose rocks just look bigger by virtue of clever packaging, and if or when the police will appear.

Transacting with the first seller on the scene – though expeditious – is not necessarily wise. Taking the first stone offered may allow users to leave the area quickly and reduce their risk of arrest, but they might not come away with the real thing. A better deal might be forthcoming with a little patience.

Street Corner Selling Curriculum:
Lesson #2: Ten Minute Rule