Rodney Koop
Contributing Writer
The New Flat Rate
Around 1979, Johnny Carson, the undisputed king of late night television was feeling somewhat strangled by his current employer, NBC. It wasn’t that the network was treating him carelessly or not paying him what he was worth. The reason, an iron clad contract that controlled his every move and that would be active for a couple more years.
Contracts can be a positive part of a job or business relationship. They have the ability to clearly define expectations and be a reference when things are unclear. But, contracts can also come with severe restrictions. In the situation of Johnny Carson versus NBC, restrictive was the case. When Johnny finally decided he’d had enough with his over the top contract with NBC, he sent his lawyer to tell them he would be leaving in one year…1980. NBC wasn’t going to make it easy and counteracted with a threat of a 100-million-dollar lawsuit. NBC wasn’t going down without a fight and neither was Mr. Carson, so the gloves came off. To the other networks, Johnny Carson was about to become a free agent; the NBC executives went bananas. The other networks began their pursuit. Thinking that The Tonight Show, starring Johnny Carson was up for grabs, each of them began the process of illegally courting him. I say illegally, because other networks were not allowed to make an offer to another network’s employee while under contract. The result, NBC hired an arbitration firm to determine if Johnny could vacate his contract or not. The arbitration firm determined that NBC could extend contracts with Johnny, but that the “exclusivity” clauses were not legally extended. This meant that Johnny could leave at any time. When it was all said and done, NBC decided to forgo the 100-million-dollar threat and enjoy Johnny’s success. Once Johnny knew the contracts were not binding, he decided to stay with NBC. Although, other networks were still offering him more than double the pay and double the time off to come work for them, he stayed.
During this conflicting time, while considering the attractiveness of offers from networks like ABC and CBS, Johnny Carson turned to one of the most influential men in Hollywood at that time. An insightful agent by the name of Lew Wasserman. Wasserman’s opinion was very simple: “It is not prudent to ask people to change their nightly viewing habits. Once they are used to tuning into a given channel, they find it hard to make the move, no matter how good an alternative is being provided elsewhere.” Johnny let the matter drop and stayed with NBC another 12 years.
Have you ever felt like there was an invisible wall between you and a prospective customer when you offer them a repair or a service? Could it be that they are in a habitual comfort zone and your request causes them discomfort? What if the real problem is actually their discomfort and not the price or your offer? We can’t expect our customers to be their own therapists can we? What we need is for them to feel like Johnny Carson did when he was released from the confinements of his contract with NBC. What if we could facilitate the “releasing” of a contractual like feeling for our customers? Has a customer ever said to you, “Well, I guess I don’t have any choice in the matter”. That means they feel restricted and we need to get the monkey off their shoulder!
When The New Flat Rate was in its infancy, our team realized that some customers practically jumped into our arms with a willingness to buy, while others were reluctant. In the beginning, we thought the secret was to bundle or package products and services together with a discount. Example: Offer to add security lighting with the purchase of a backup generator. After all, isn’t that what McDonalds does? Would you like fries with that?
When I looked closer at how menu’s work, I realized that it’s not the addition of fries that makes them buy. The buying switch is flipped by simply giving the perception that they are getting more for their money if they take the combo offer. After all, I can just buy a cheeseburger and coke cola, enjoy the meal, and then if I’m still hungry, buy an order of fries or a hot apple pie. It seems like common sense and undoubtedly in the long run would save money. But why do I buy the combo? Because I know that those fries will cost more as a single purchase than if I get them in a combo. That’s why menus work! For a menu to work right it must create a sense of perceived value. The purchaser must feel that if they buy a higher priced option, they will get much more value for their money. Also, the purchaser must accept that the bottom option is priced reasonably.
Johnny Carson eventually retired from show business and was happy with his career. We want you to be happy with your career and ultimately, get paid what you are worth. We want you to get the money and satisfaction that you have worked for all of these years!