Posted by: Troy White
May 27, 2010
Issue #937

Webkinz Wackiness …
and a Ton of Lessons
for Smart Entrepreneurs

In this issue:

• How to create $45 million dollars in a single year by listening to what your clients really want
• The secrets of the most brilliant marketing campaign to kids I have ever seen
• Three questions you can ask of your clients that will guarantee you a breakthrough idea
• 12 marketing lessons that are guaranteed to improve your revenues right now
• And much more!

Fellow Business-Builder,

What can we learn from the newest teddy bear craze?

More than I ever would have guessed!

If you have pre-teens, you undoubtedly have heard of these crazy bears called Webkinz. I have twin 6-year old daughters, and was fortunate to be saved from Webkinz up until a month ago.

All hell has broken loose now!

Remember the Beanie Baby sensation? It made people millions, and still is a major seller for collectors.

Webkinz is Beanie Babies on marketing steroids.

First, Ganz (the Canadian plush toy manufacturer) goes out and asks some very serious questions of their target market, young kids.

They start by asking “what do kids love, and love to do?” (Which, by the way, we should all be asking of our ideal clients.)

And they come up with a few things …

• Kids love to dress up their dolls
• Kids love to build things, stack things, and create with their imaginations
• Kids love to play pretend parent
• Kids love to collect and show off things to others
• Kids love fun games – especially ones that reward them in some way
• Kids love to use their imaginations – be it by drawing, acting or playing, or being in a virtual world

Then they ask where today’s generation of kids like to spend their time. And it is obvious that the Internet is the new medium of choice. They can go on there and chat with their friends, play games together, and have fun doing silly things. The kids like being in control of their entertainment, and the Internet gives them the control they want.

The next thing they do is absolutely brilliant (wish I thought of it!) … they combine real teddy bears with Internet worlds.

They created a new line of plush toys called Webkinz. You go out to the store and buy a Webkinz (if you can find one – more on that later). With your Webkinz comes a little tag with a secret passcode.

Once the code is entered,
a whole new world is opened up for the kids.

Their physical toy becomes a virtual toy … and the virtual toy is exactly the same as the actual (if they have a monkey – the digital pet is a monkey too).

They can now feed their pet, play with them, clothe them, buy things with their Webkinz cash (virtual money they can win by playing games), and they can talk to other Webkinz online as well.

They can take their pet to the veterinarian for a checkup … or they can build them a new bedroom and decorate it with their Webkinz Cash. They can build them a bathroom (with working pieces!), they can create a garden, or a playroom, or an outdoor playground.

They can read the Webkinz newspaper, play games with other people’s Webkinz in tournaments, they can get a job or they can send e-mails to other Webkinz in their network.

These furry little critters can do just about everything online!

Of course, to buy the Webkinz anything to eat, wear, or play with – you need Webkinz cash which you have to win. You can win the cash by playing games, by answering questions in the school (Quizzy’s Corner), or they can do odd jobs to win more money.

Their first year out alone, they sold over
$45 million dollars worth
of these little pesky pets!

This is an absolutely brilliant example of marketing done right.

My kids are ALL OVER these things. They can’t wait to get home and login to see how their Webkinz are doing (they each have five or six of them now – which is nothing compared to some kids I have heard of with 15 or 20 of them).

Some of the brilliant marketing techniques they have used so far:

• Forced replacement. The code is only good for one year. After that you have to buy another one.
• Scarcity. They pull Webkinz off the market (much like Beanie Babies did) so that there is complete insanity at the retailers when a new one comes out … everyone wants one as it may be the one they pull from the shelves.
• Educational. The online world they have created is teaching my kids more about money, how to make it, and where to spend it (and they also realize that when their money runs out, they have to go out and make more). They teach them math, science, history and language. My two little 6-year olds are becoming little whiz kids on the computer thanks to these furry little critters. The best and fastest way for the kids to make more Webkinz cash is in Quizzy’s – the online school. So they reward the kids for learning … brilliant.
• A constant need to upgrade and buy more. They bring out one new Webkinz a month – which everyone ‘must have’.
• Cross selling. They have a line of bracelet and necklace charms. Each charm is priced a low $4 – and each also comes with another code. Entering the code gives your pets virtual charms they can wear and swap with the others. When you collect enough charms, you get bonus Webkinz cash and prizes (plus access to secret worlds that are only accessible when you buy enough charms).
• They get the parents involved.

Get this … there are actually help groups
out there now for the parents
that have become addicted to Webkinz!

• Parents are looking after these Webkinz while their kids are in school, so that they stay healthy and with lots of Webkinz cash (The online games are actually kind of fun – not that I ever plan on playing them enough to get addicted!).
• Bring them back … regularly. There are daily activities that the online portal provides … so kids get excited to log in every day and see what is happening that they can have fun with.
• They are constantly looking forward to what else they can bring out that not only complements the collecting part of it, but gives the virtual pets more to do and play with also.
• They have priced it reasonably. Each one is only $10 or so – the charms even less. By pricing it low, parents don’t seem to balk as much at buying two or three at a time … further fueling the collectable part of it. All said and done, if you were to buy all the Webkinz, the Mini-Webkinz (yes, they also have miniature models of them), the charms and all the other paraphernalia, it would run you well into the hundreds of dollars. So there’s a very high value for every kid (and parent) if they get hooked.
• They provide reports to the parents (if desired) on what is happening with Ganz and Webkinz World.
• Mix a little controversy in for good luck. There are quite a few chat rooms out there that people can go on and discuss Webkinz. Some parents don’t like the part that you can collect more and more of the Webkinz, the charms and the minis – they feel it is blatant exploitation of the kids and the parents (more like their pocketbooks).
• Teaches some form of restraint and responsibility. This is up to the parents to do, but can be a powerful lesson in itself. We make the girls earn their next Webkinz or charm. They have to do their chores, play nice together, and listen to us when we say enough is enough of Webkinz world. As much as they dislike being told they have to leave the virtual world, they do enjoy putting their Webkinz to bed before logging off (and if they forget to put them to bed, the Webkinz get sick – which means a trip to the doctor’s – which means they have to spend their hard-earned Webkinz cash).

I absolutely love what Ganz has done here … and I think we should ALL be paying close attention to the lessons they teach.

It may be difficult to see the connections at first glance … but I think that there are a number of things each and every one of us should be implementing in our businesses to build a community like this.

$45 million dollars and 3 million hits a month is proof enough for me …

I’m listening … and applying.

Hope you are too.

To your success,

Troy White
Editor, Small Business Mastery
Supplement to THE TOTAL PACKAGE

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8 Comments »

1. Comment by Bill — May 27, 2010 @ 11:04 am

   I must have missed the 3 questions we should all be asking our clients to reveal the breakthrough idea. Cool idea, just wondering how to apply it to B2B and other businesses.

2. Comment by Troy White — May 27, 2010 @ 11:22 am

   Hi Bill, Good point - I should have made it more clear on this post what to ask:

   1) “what do kids love
   2) and love to do?”
   3) Then they ask where today’s generation of kids like to spend their time.

   so how does this apply to b2b?

   First, you can’t sell to a business - a person needs to be involved in the transaction. Your ideal client within the business may be a purchasing manager, or a CIO, or a HR Director.

   You need to understand what they love most about their business or employment…

   Do they love helping others in the company reach their fullest potential (HR people)?

   Do they love going after after a day of work utterly exhausted because they know they ‘done good’ that day?

   Or maybe they love to find the newest technology tools that help their IT team get more support calls done in less time?

   Each industry will have their own - and each person within each company will have their own unique desires…

   …your job is to find out what those things are.

   When you nail that down, they you have to find out where they spend most of their days. Do they spend a lot of time researching on Google? Are they a social media team member that spends their days on Digg, Facebook or Twitter?

   Once you know what they want most in their day and their business, then you know where they spend their time during the day — you have the perfect platform to create your marketing campaigns.

   Right?

   Hope that helps clarify. If not, let me know. Thanks, Troy

3. Comment by Robert Heiney — May 27, 2010 @ 11:37 am

   This is good information and I know I’m ‘thick’, but what might you ask to get this information?

   I guess I want you to do ALL my thinking for me!

4. Pingback by Marketing Plush Toys — May 29, 2010 @ 8:37 am

   [...] interesting about this is how they came up with the idea: they asked their target demographic (kids) questions to find out what they love to [...]

5. Pingback by Marketing Plush Toys — May 29, 2010 @ 8:37 am

   [...] interesting about this is how they came up with the idea: they asked their target demographic (kids) questions to find out what they love to [...]

6. Comment by Andrew Foss — June 1, 2010 @ 9:17 am

   You sure got this right. I have been marveling over its brilliance for the last year as my 5 nd 6 year olds have used it to learn the internet, read and everything else.

   How else can you get kids to scream and fight to buy a $.35 plush toy. Way to add value!!!!!

   Next question - Silly Bandz - is there an online application there?

7. Comment by Troy White — June 1, 2010 @ 5:09 pm

   Andrew, Silly Bandz is a new one to me. I looked them up and see yet another kid craze that’ll cost us parents.

   I could see some online create your own bandz applications.

   Maybe an online portal that lets the make their bandz come to life.

   much like webkinz really… a whole virtual world with their bandz character?

   Dunno - interesting idea and business.

   Are you a part of that one?

   Thanks for sharing. Troy

8. Comment by Volodymyr Khupovoy — June 2, 2010 @ 6:44 am

   Hi, Troy. Your article I really like. I will organize a conference on b2b marketing in Ukraine on July 2. Can you speak to her on Skype?