to patrons of this bar, it's a fun drinking game. to the owners, it's a way of collecting data to improve efficiency and retain customers. it's something many small business owners might want to take a shot at, coming up next on "your business." small businesses are revitalizing the economy, and american express open is here to help. that's why we are proud to present "your business" on msnbc.

hi there, everyone. i'm j.j. ramberg and welcome to "your business." data. for anyone who's not in to crunching it it sounds like a scary word. and it kind of sounds like something for big companies with big budgets. but you know what? it is not. we all have information hidden in the data we're collecting on our customers and it's just a matter of figuring out how to look at it and then what to do with it. we found a corner bar in san diego that's done a great job at both collecting data, and then acting on what they've learned. just a little research has resulted in a big increase in revenue. here in san diego's famous gas lamp corner is a bar called the

tipsy crow. >> we bring a lot of people in here and all we really focus on is hospitality and making sure people have a good time. >> frank miller is the manager. and he's discovered that making sure people have a good time takes a lot more than just a cold beer and a bowl of chips. >> we're not recreating the wheel with what we sell. we're selling the same products that next door sells and down the street sells and if you're in new york or chicago, everybody has bud light. everybody has maker's mark or jack daniel's. >> the world of maquetting today is really all about creating that john going relationship for better customer experience. >> tyler douglas, a vancouver based vision critical is an expert on using marketing data to increase profits. he says for any sized business, keeping track of customer habits is the key to keeping them happy and engaged. >> it's often said that it's easier to get a customer to spend more with you than it is to win a new customer.

>> and that's exactly how frank sees it from behind the bar at the tipsy crow. keeping customers engaged, he says, makes all the difference. >> the difference between somebody staying and buying one drink, and buying any drinks, or buying five or six, or coming back the next day. >> recently, frank installed a bar game at the tipsy crow that uses sales data to change the prices of his drinks. it's called the drink exchange. and it works like the stock market. where high demand causes prices to rise. and low demand causes prices to drop. >> so as a patron if you walk into the bar, you see these bright red down arrows. and you see, hey, this drink went down 50 cents. 75 cents, a dollar. this is a good buy. and i want to take advantage of it. >> los angeles-based todd schramm is the creator and distributor of the drink exchange. >> what that means is the drink prices change based on realtime demand. >> so if people are buying -- buying a lot of bud light, coors light goes down in cries.

>> they're over at a table buying a bunch of shots they'll wait until the prices change and capitalize on the cheaper item. for them it's really a game and sort of a way to influence the happy hour, so to speak. >> but there's more to this game than meets the eye. >> more than a game. definitely more than a game. on the surface it's a game but behind the scenes, it's a lot of influence that goes on. >> in fact, data analysts like tyler don't even call it a game. they call it gameification because it uses sales numbers to increase marketing. >> gameification is an example of big data in that you're engaging people to do something. >> he says this kind of game engagement is a highly effective tool for collecting data about customers' preferences. data which can then be used to increase profits. >> if you know what you're looking to accomplish you can be very targeted. very pragmatic about what you want to go out and do. in the meaningful data you want to pull. >> the key to this system is that all the price changes are

determined by algorithms tied in to the bar's point of sale system. >> a point of sale system is a data collection system. what is changing is the ability to open up the black box of that data and combine it with other data sets that you might have. >> with realtime sales data driving price changes, the game often leaves customers to choose the bargain drinks, whose prices may drop but whose profit margins remain high. >> it will drop the price of say a tequila shot. and they make a high profit margin on tequila, so all of a sudden people start buying tequila. so, we really created a system for bar owners to get the most out of a specific product. >> and that isn't the only way this game can influence customer choices. after examining the first few months of sales records, todd and frank discovered something odd. >> they tend to purchase items that are part of the drink exchange and literally ignore everything else. >> whether it's miller light or bud light or whoever, it's

almost 50% of a difference when you're on the exchange menu versus when you're not. >> the sales for the items that were part of the drink exchange were so much higher than anything else, that their liquor distributor got word of this and wanted to feature some items for their clients, to make sure that they were being sold. >> brilliant. it's the -- it's a great example of rethinking the data that you have available to you already. and how you might use that. in this case to make more money. >> and more drink distributors asked to have their brands listed on the drink exchange, frank and todd began to see the game in a whole new light. >> we really found is in to pretty much drive a competitor out of the market in that bar. because if you're, for example, miller light, and there's some other beer that's not in the system, people really won't even know it exists. >> while he'd like to get compensated by the distributors for including their products on the drink exchange, todd isn't

sure if that's possible yet. because he says, the laws are tricky. tyler, however, says that's not even the point. since the real profits lie elsewhere. >> the benefit is probably much greater than just making more money by selling it at bars. it's knowing what people drink. it's pushing people to drink certain drinks over others. manipulating the price. for the benefit of the customer or benefit of the bar. that's really the purpose of the game. >> just one tool small businesses can use to get a leg up on the competition and get the job done more efficiently. we recently asked some of our small business viewers to share with us what online tools and apps they're using that gives them the entrepreneurial edge. >> we use an app called tally which tracks all of my expenses and all my travel so at the end of the trip when i get back, all my receipts all have pictures of

them, my partner gets them, expense report and it works out great. >> as a small business i come up with a lot of creative ways for me to make my money stretch, and one company who i have had a lot of success working with is invoice. they allow you to do billing on a monthly basis versus having to pay for one year in advance. and through the tools that they have i feel as if it gives me the best flexibility with respect to managing not only my company's practice but also my clients. >> well, great app that we're using is called mock-ups. and it's a great way to build a wire frame with little or no development background. it allows you to understand the flow, and basically create a website literally within seconds. and get approval from your teammates to see if it's capturing the right audience that you need. >> one app that we use constantly is actually the go to meeting mobile app for your phone. i can basically run meetings,

and take calls and do conference calls all from that app and it really has saved me a lot of time because i'm always on the move. >> the website helps you find people from all over the world, the united states, global environment so you can find good contractors who can work at a fraction of the cost and provide very good quality work and this is a very helpful tool for our company. >> we use a capability set called trello. it's a tool that helps our development team stay online with different tasks that are going on and move tasks between developers. we find it very useful for helping people understand what's going on, and making sure they're contributing to the workload at any given time. >> using technology to streamline your business operations could be the competitive advantage your small business needs to thrive in the short and the long-term. here now are five ways to incorporate technology and minimize costs courtesy of yss

magazine. one capitalize on cloud computing. having all your files on the cloud allows everyone to be on the same page in realtime. two, deploy rugged devices. if your business operates in the field, or requires travel, make sure your data is properly protected. consider utilizing ruggedized tech tools that will ensure your workforce can take on any environment. three, embrace online invoicing. using small business accounting software will improve cash flow and minimize financial difficulties. four, use customer portals. a more interactive experience for customers will take the pressure off growing themes. customers can submit support issues, complete transactions and receive highly personalized interactive service on the web. five, collaborate using alternative phone and internet options. try replacing your usual phone service with a voice over ip service. this will allow you to communicate with consumers and partners at a fraction of the cost.

although business owners know that it's important to use copy rights and trade marks or patents there are still a lot of misconceptions out there about intellectual property. so in an attempt to set the record straight our guest will highlight some of the most common it mistakes she's encountered. mary juetten is the founder of track light, a site that provides entrepreneurs with the tools they need to identify and protect their intellectual property. great to see you. we get so many questions about intellectual property so i'm so excited to get through some of the mistakes people make and the first one you think, or that you say you see all the time is people think oh, ip that's just for tech companies. >> exactly. actually 100% companies have intellectual property. but, the common misconception is that people think, ip is only patents. so it's much more than that. it can be as simple as a trade secret. if you think of coca-cola, they have their wonderful recipe and process. but it's also about, you might have a patent, but you likely

have a product name. and i've seen so many inventors focus on the patents, and then forget about the trade marks and then what happens is you created your product name, a little bit of branding happened and you spent a lot of money on packaging you're going to have to throw away because you might be infringing on a trademark. >> if you don't have a tech company, consult a lawyer, look online, figure out what kind of intellectual property you have. also you say that people think that trade secrets are easy to protect. >> so trade secrets, a bit of the unsung hero. in that people think patents, but you can also protect things with trade secrets. you don't have to register them, pay an attorney or do it yourself using the united states patent and trademark office. but you do have to take the steps to protect those trade secrets. >> just explain too people out there what trade secret. i have a t-shirt company let's say, what might a trade secret i have be? >> maybe as simple as your customer list. you worked really hard to find all these customers and you hire somebody, they come in and they

work with you, you don't tell them that that list is a trade secret. you haven't taken the steps, that person leaves and steals your trade secrets. >> so i have to be very careful telling the employees, partners, et cetera, these are proprietary. >> yes. >> got it. okay, next, i can copy anything without a copyright, not true. >> not true. and very common. people think, you know, if you think of a bike, you know, a series of bikes are sitting outside a building, if one doesn't have a lock, you still can't take it. it's the same thing with copyright. if you don't have that "c" it doesn't mean that it's not copywritten. you have to search out what the terms of the use is for that picture. very common, even big companies make this mistake. and they get viewed for infringement. and you don't want to, as a small company, with your blog, use a picture from a big image company and then receive a letter. >> that happens all the time, right? people really think images online, oh, those are free, i can take them and that is absolutely not true. completely.

okay, and then finally, i find this interesting. if you pay for it, you own it. so i hire someone let's just say to create a design something or write a piece of code for my website. just because i paid for it, it's not mine. >> correct. if you have employees it's different. what we're talking about here is you hire an independent contractor and often start up some small companies that can't afford employees so they hire this contractor. unless you're very specific about who owns what at the end you can end up in a situation where you might have paid for someone to develop the code but then you don't actually own the source code. or you've paid for somebody to do photography for your website, they retain the rights to the photos, and you don't own them. >> and i've heard cases of people paid for their contractor to build their website, that contractor buys the domain name, and then you, the company, you don't own the domain name because you didn't make it clear. >> right. >> which is crazy. >> it is crazy. >> all right, well mary this is incredibly helpful. points out things that people really should look out for. thanks for coming on. still to come, turning

social media followers into customers. and outsourcing your sales force. and sean wycliff whose upending the movie ticket business talks about the importance of innovation and risk taking. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does.

how do you get an emotional connection with a customer, besides the most important business between build-a-bear workshop and any other store in the mall. it starts with the connection with your stuffed animal and that alone is probably more than just when you buy a sweater or a pair of pants or your mom buys you a new outfit. it's something that you picked out, that you personalized that you connected with, but it is so important to make a connection, because that's lasting. the next time you pay full price to go see a movie, well, you may want to think twice about that. a couple of years ago, sean wycliff launched a company called deal clicks. basically, priceline for movie tickets. they sell the empty seats at a discount, which is a win for both the theater, and of course the consumer. sean had an interesting story himself, as well. he's a serial entrepreneur who's seen some highs and admittedly he's seen some hard times. i caught up with this disrupter last month at the south by southwest festival in austin. can you explain what your

company does? >> sure, yeah. so deal flicks is priceline for movie tickets. right now 88% of movie theater seats are empty. the theaters will give us their empty seats and often popcorn and soda and we'll sell them on our iphone app. >> it's still early stages? >> we launched a year and a half ago in july 2012 so we're still growing and going but things are going really well. >> you launched in an incubator in silicon valley. >> yes. >> does that give you a leg up as you're moving forward? >> gave us two legs up i would say. it was very helpful. we were able to meet investors and get on the map. we were able to get some press, learn a lot about marketing and we were able to track talent. so those four things were huge for us. >> really interested in this idea of marketing. because your technology company, right, so you are connecting these empty seats with consumers who want to buy them, theaters, consumers. so the technology, but marketing is how you get people in. so, which is more important for you, technology, marketing, which i include design in the marketing, too. >> yeah, absolutely. all those things are important. so design is obviously really important or else people aren't

going to want to interact with our app and know what to do. and marketing is great because we need to go out and get the word out. but also the tech is important, because if you don't have a product that works, it's not going to do that well. >> but talk to me about design. >> yeah. >> because i read somewhere that you spent a lot of time working on the design, and some people might think, you have a really great functional website, or app. why is design so important? why should we be spending time and money on that? >> it's truly important because a lot of people get confused in terms of user experience and the flow. and a lot of people might drop off the conversions. people might not understand exactly what you have to offer, and the value that you can give them. even knowing what movies are out there and what deals and the way of explaining that so we have a great designer tailor that's been able to build a great experience on our iphone and website. >> you launched your app here at south by southwest last year. it's gotten great traction. it was featured in the app store. how did you decide we did a story on this show recently how did you decide how to determine where to put your resources on the web or in mobile?

>> that's a really great question. so my co-founder jafoun-founder involved with a lot of that. we started with web first. our understanding was we could iterate quickly on the web. on the web you can update things immediately. and so the decision was, let's start with the web, and then figure things out, iterate very, very quickly and once we found out things that are quickly we can push them through the iphone app and android app. >> are you paying less attention to the web? you're still new. you have limited resources so where do you spend your time and money? >> dack's team will focus a lot of time and effort on the web to get things out and test them. and then they'll push things out to the iphone, or also to the android app as they're ready. >> got it. now, you, you're a serial entrepreneur. you had started a company when you were in college. very successful. you bought yourself a ferrari, and then it failed. how has that influenced how you're running this company? >> yeah, that's -- that's a great story. i definitely failed, and had

some success, moderate to success. but i think when it cams to deal flicks the way that it's affecting me here is to appreciate everything 7 especially the money that comes in and the money that we raise and the people that i'm working with. because i used to just think money was easy and i took it for granted and would blow money on things like you mentioned the ferrari. my brother and i bought this house and all of these things. nowadays i live a pretty frugal life. i live in a small apartment and drive a camry around for most pardon of the time. >> and the money is going into the company to build the company. >> yes, absolutely. >> you have a van right now that's going around the country signing up theaters. is it -- we live so much in the digital age, we can do so much on e-mail, et cetera, really getting out there and meeting people that's how you're making your zeals? >> this is my co-founder kevin's idea. during the first six months he looked back and found, you know, most of our theaters require some face time to get a deal done. he decided to trade his acura in for a minivan and go on a road trip and then they decided to live in the back of the van because it was more convenient.

so they'd actually drive in the day, sleep at night in the back of the van and take a shower, so they not only got more done but they got in pretty good shape. >> and you're signing up all these theaters that way? >> they're going around the country doing that. they're here in austin right now and they're going to be going around the east coast next month. >> good-bye ferraris and acuras, hello minivans. >> i know you're looking for some money so best of luck to you. >> it's time now to answer some of your business questions. let's get our board of directors in here to help. mike michalowicz is the ceo of pro-vendous group a cutting group that helps clients grow their bottom line. he is a best-selling author and he has a book coming out later this year called profit first. and steve strauss is the senior small business columnist at "usa today." great to see both of you guys. >> good to see you. >> great to be here. >> 4r09s of books between you two.

>> how do i turn my social media followers in to loyal customers? >> i love this question, mike, because you can spend all of this time getting this question. you can spend all this time getting followers, but if they're not customers, what's the point? >> you have to recognize the vast majority of people following you are just free loaders, coming through and going by. you have to pick out the ones who are loyal customers. first of all, you have to identify who they are. the trick is give your group a name. jimmy buffet did it with parrot heads. those are the people who loved his stuff the most. once you give them a name and they start using it, that's your local group of customers. second, ask their permission to market to them. get their e-mail address, address, phone numbers. and third, give them exclusive offers, stuff specific to them that they can get that no one

else can get. >> steve, you have anything else to add? >> as you know, i started my own new start up called the self employed we have an active facebook page, we hit 25,000 likes yesterday. thank you very much. >> congratulations. >> thank you. it's an issue we faced. the facebook page is active but getting there is another thing. you want posts that link to the page on your website that has the call to action, or create a special tab. second, have call to action within your social media. for example, on twitter your background wallpaper could have a special deal. if you go to hostgators twitter page, the background page says 20% off with a coupon code. within your social media, you're having a call to action. the last thing is people might want to check out something called pop shops, these are cool tools that you can add to social

media, take your online store and post it as opposed to your facebook page. it will say special on our sweaters, 2 for 20, click here, it goes right through, and you can buy. you can be selling on your facebook page with something called pop shops. >> great ideas. let's move up to the next question, it's about the importance of a team. >> in the very beginning of a start up, when you're trying to get together a team, most people are looking for cash or money to live off of. so how do you get people to come on board your team, join your team, in order to gather attention from investors who want to see a team together before they invest. >> i like how he says most people need cash or money to live off of. i would say the vast majority of people. when you don't have a lot of money to pay, how do you recruit a good team so you can go out and get the money? >> that's a great question. i would use the acronym ceo.

culture. create a great culture within your organization where it's fun, interesting, you are giving people valuable work. that will attract quality talent. e is equity. if you're not going to pay cash, you have to pay equity. give some equity. o is opportunity. you want to show people there's room for advancement within the organization and that your business is going somewhere. if you can show those things, people will hop on and hopefully figure out how to deal with the cash some other way until things get moving. >> those are great ideas. yet sometimes it's hard to go that when you're very knew. >> i think it's putting the cart before the horse. investors want to invest strategically and want a return. the first thing is not build the team, the first thing is build the concept. a lot of people do the perfunctory stuff, they try to get names on the table, show investors and say look at these great names. the investors aren't stupid. they know they don't have their skin in the game and will leave.

take your time to add people, sharing equity, whatever is necessary to build a strong, healthy company overtime. then seek investors. don't seek investors from the get-go. that's a trip. th >> this is a question about an outsourced sales force. >> i was interested in whether the group has information on an outsourced sales solution. >> great question. i've heard great things and bad things about outsourcing your things. >> if you have a physical product, you want to go to the reps who have a relationship already. for me to get to walmart, forget it. if i go to a rep who has a relationship with walmart, they'll get me in. sometimes you have to build that inhouse. >> how do you go about find going sales reps and how do you

figure out how to compensate them? >> like anything else, to find a good sales rep or attorney or partner, networking is best. social media again is really good for that. and i would really encourage people to remember that you have to think about who these sales reps are. these are independent sales representatives. they are independent for a reason because they like it they are entrepreneurial as well, and they often represent more than one company. you have to appreciate that they like their independence, they like a commission structure that allows them to be entrepreneurial and then be able to offer them training, so that -- and tools so they can do their job well. they have the choice of many different companies to go to. if you're going to hire an outside independent sales rep, you have to show why your company will give them the opportunity and advantage to get where they want to go, make the money, have the fun, go on the road, whatever they like to do being an independent sales rep. >> thanks, you guys. love picking your brain.

we are always finding great small business advice on twitter, let's see what's trending. entrepreneur paul brunson states if you believe you're drivering something of value, stick to your guns with your pricing. social media trainers social fresh tweeted out why aren't more brands prioritizing instagram as a platform of choice. and dave anderson with great advice, culture tip, a mission statement is not a formality. it unites teams behind a common purpose that makes them unstoppable. >> thank you for joining us today. if you wanted to learn more about today's show, go to our website.

coming up next week, versatility. >> the fun here is what happens when you get those different disciplines, people kogt in the same room brainstorming, you come up with stuff that you would never get with 100 of the smartest people in one field all locked together in a room. >> find out how this water design company in southern california has stayed on top by making sure everyone knows each other's job. until then, i'm j.j. ramberg. remember, we make your business our business. >> announcer: brought to you by american express open. visit openforum.com for ideas to help you grow your business. ed s ed s my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up.

be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. striking back at the nra. we have a lot of news to get to this easter morning including evidence of a new interview conducted by the christie administration's legal team after the mastro report was released. also word out of south korea at this hour that more bodies have been recovered from that passenger ferry which capsized with hundreds of people on board. confirmed death toll is now above 50 people. divers have finally been able to find a way