could 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. something many small business owners may want to take a shot at, coming up next on "your business." small businesses 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 jj ramberg. welcome to "your business." data, for any one who is not into crunching it sounds like a scary word and sounds like something for big companies with big budgets. you know what, it is not. we all have information hidden in the data we're collecting on customers and it's a matter of figuring out how to look at it and what to do with it. we found a corner bar in san diego that has done a great job at both collecting data and then acting on what they learned. just a little research has resulted in a big increase in revenue. >> here in san diego's famous gas lamp quarter is a bar called the tipsy crow. >> we bring a lot of people in

here and all we focus on is hospitality and people having 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 re-creating the wheel with what we sell, we're selling the same products that next door sells and down the street sells. if you're in new york or chicago, everybody has bud lite, everybody has maker's mark or a jack daniels. >> the world of marketing today is really all about creating that ongoing relationship for better customer experience. >> tyler douglas, an expert on using marketing data to increase profit. he says for any size 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. >> that's exactly how frank sees

it from behind the bar. keep customers engaged he says makes all the difference. >> the deference between somebody buying one drink, buying any drinks or five or six or coming back. >> frank install add bar game at the tipsy kro that uses sales data to change the price. it's called the drink exchange. it works like the stock market where high demand causes prices to rise, and low demand causes prices to drop. >> so if you walk in the bar you see these bright red down arrows, and you see hey, this drink went down 50 cents, 75 cents, a dollar. >> los angeles-based todd schram is the creator and distributor of the drink exchange. >> what that means is the drink prices change based on real time demand. >> if people are buying a lot of bud light, coors light goes down. people buy acca, bourbon goes

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

determined by algorithms tied into the bar's point of sale system. >> the point of sale system is a data collection system. what the 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 real time sales data driving price changes, the game often leaves customers to choose the bargain drinks who. >> it may drop the price of a tequila shot. so all of a sudden people start buying so we created a system for bar owners to get the most out of the products. >> and that is not the only way this game can influence customer choices. after examining the first few months of sales records, todd and frank discovered something odd. >> patrons tend to purchase items part of the drink exchange and ignore everything else. >> whether it's miller lite or bud light or whoever.

it's almost 50% of a difference between you are on the exchange men yu versus when you're not. >> the sales for the items part of the drink exchange were so much higher than anything else that their liquor distributor caught word and wanted to feature some items to make sure they were being sold. >> brilliant. it's a great example of rethinking the data that you have available to you. and how you might use that. in this case to make more money. >> as more distributors asked to have theirs listed on the exchange, frank and todd started to see the game in a new light. >> we found you can pretty much drive a competitor out of the market in that bar. if you are, for example, miller lite, and there's some other beer 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 that's possible 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 to suppliers, it's knowing what people drink, 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. data is one tool small businesses can use to get a leg up and get job done. we recently asked some of our small business viewers to share with us what online tools and app they are using to give them that entrepreneurial edge. >> we use an app called tally which tracks all of mif expenses. all my travel. so at the end of the trip when i get back all of my receipts i have pictures of them, my

partner dennis gets them 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 had a lot of success working with is invoice ea. through the tools and the ui 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. >> great app that we're using is called mock-ups. it's a great way to build a wire frame with little and no development, background. it allows you to understand the flow and to basically create a website within seconds. and get approval from your teammates to see if it's capturing the right audience that you need. >> one app 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. it really has saved me a lot of time because i'm always on the move. >> very good website is odisk. it helps you find people all over, you can find good contractors who can work at the fraction of the cost and provide good quality work. this is a very helpful tool for our company. >> we use a capability set called trela. a tool that helps our development team stay aligned on the different tasks going on and move tasks between developers, we find it very useful for helping people understand what's going on and making sure they are 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 are five ways to incorporate technology and minimize costs. >> one, capitalize on cloud computing.

having all your files on the cloud allows everyone to be on the same page in real time. two, deploy rugged devices. if your business operates in the field or requires travel, make sure your data is properly protected. condition using rugged tech tools that ensure your work force can take on any environments. three, embrace online invoicing. four, use customer portals. a more interactive experience for customers will take the pressure off growing teams. customers can submit support issueses are, complete transactions and receive highly personalized 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 to you communicate with consumers and partners at a fraction of the

cost. although business owners know that it's important to use copyrights or patents there are a lot of misconceptions about intellectual property. in attempt to set the record straight our guests will highlight some of the most common ip mistakes she encountered. mary is the founder of track light, a site that provides entrepreneurs with the tools they need to identify and protect their intellectual property. so great to see you. >> nice to see you. >> we get so many questions about intellectual property so i'm 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 for tech companies. >> 100% of 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 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 patent, then forget trademarks and then you created your product name, a little branding and spent a lot of money on packaging, that you're going to have to throw away because you might be infringing. >> if you don't have a tech company, consult a lawyer, look on line, figure out what kind you have. also you say that people think that trade secrets are easy to protect. >> trade secrets, a bit of the unsung hero in that people think patents but you can protect with trade secrets. you don't have to register them, pay an attorney or do it yourself using the united states patent and trade mark office but you have to take the steps to protect the trade secrets. >> explain what trade secret, i have a t-shirt company, what might a trade secret be? >> might be as simple as your customer list. you worked hard to find these customers and you hire somebody, they come in and work with you, you don't tell them that list is

a trade secret. you haven't taken the steps. that person leaves and steals your trade secret. >> so i have to be careful telling the employees, partners, et cetera, these are proprietary. >> yes. >> next, i can copy anything without a copyright. not true. >> not true. and very common. people think if you think of a bike, you know, 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 with copyright. if you don't have that c it doesn't mean 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 sued. you don't want to as a small company with your blog use a picture from a big image company and receive a letter. >> that happens all the time. people really think images online, those are free, i can take them. that is absolutely not true. >> okay. then finally, i find this

interesting. if you pay for it you own it. so, i hire someone let's 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-ups can't afford employees so they hire a contractor. unless you are specific 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 paid for somebody to do photography for your website, they retain the rights to the photos and you don't own them. >> i heard cases of people paid through a contractor to build their website. that contractor buys the due main name and then you, the company, you don't own the due main name because you didn't make it clear. which is crazy. >> it is. >> well mary, this is helpful and points out things that people should look out for. thanks for coming on.

social media followers into customers and shawn's company up ending 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.

having emotional connection with your customer is the most important connection. because it starts with that connection with your stuffed animal. in that alone is probably more than when you buy a sweater or pair of pants. it's something that you pinged 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 see a movie you may want to think twice. a couple years ago shawn launched deal flicks, the price line for movie tickets. they sell the empty seats at a discount which is a win for the theater and of course the consumer. shawn has an interesting story himself as well. he is a serial entrepreneur who has seen highs and admittedly some hard times. i caught up with this disrupter last month at the south by southwest fess i value in austin. >> can you explain what your

company does. >> sure. deal flicks is price line for movie tickets. we'll partner with theaters, ge thif us seats and we'll sell them on our app for up to 60% off. >> and you are early stages, right. it's two years, year and a half. >> we launched a year and a half ago so we're still growing and going but things are going well. >> you launched in an incubator d. that give you a leg up? >> it gave us two legs up. it was helpful. we were able to meet investors and get on the map, get some press, lern about marketing and attract talent. >> the marketing, you are a technology company so you are connecting empty seats with consumers, theaters, consumers. so it's 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 are important. so design is obviously important or people aren't going to want to interact with our app and

know what to do. marketing is great because we need to go out and get the word out. but also the tech is important. if you don't have a product that works it's not going to do that well. >> talk to me about design. because i read 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 spend time and money on that? >> it's extremely important. a lot of people get confused in terms of the user experience and flow and people might drop off with conversions. people might not understand exactly what you have to offer and the value you can give them. even knowing what movies are out there and deals and a way of displaying that. we have a great designer. >> you launched your app here last year and it's gotten great traction. it was featured in the app store. how did you decide? we did a story recently, how did you decide how to determine where to put your resource, on the web or mobile? >> that's a great question. so my co-founder zach, our cto,

he is involved with a lot of that. we started with web first. our understanding was we can iter rate quickly on the web. you push a new update to the iphone, app store, it takes maybe two weeks to go through so it's harder to update. on the web you can update immediately so the decision was let's start with the web and then we can figure things out and once we find out things that work push them through the iphone app and android app. >> you're still new, you have limited resources so where do you spend your time and money? >> zach's team, they focus a lot of time and effort on the web to get things out and test things. >> you still do that. >> exactly. then push things out to the iphone or also to the android app as they are ready. >> got it. you are a serial entrepreneur. you started a company when you were in college, you got yourself a ferrari and then it failed. how has that influenced how you are running this company? >> yeah, that's a great story. i definitely failed and add some

success but i think when it came to deal flicks the way it affected me is appreciate everything especially the money and the people that i'm working with. i used to think money was easy and took it for granted and blow money. my brother and i bought this million dollar house. i live a pretty frugal life, in a small apartment and drive a camry. >> the money is going in to build the company. >> absolutely. >> you have a van going around the country signing up theaters. we live so much in the digital age we can do so much on e-mail, but really getting out there and meeting people, that's how you are making deals? >> this is my co-founder's idea. he is in charge of theaters. he found that most of our theaters were in face time. he decided to trade in for a minivan and go on a road trip. then they decided to live in the back of the van. so they would drive during the

day, sleep at night in the back and take a shower and go on. they not only got more done but in pretty good shape. >> you are signing up a theaters. >> they are going around the country doing that. they are here in austin now and they are going to go around the east coast. >> hello minivans. so great to talk to you. good luck with everything. i know you are out looking for more money so best of luck to you. >> thanks. it's time to answer some of your business questions. let's get our board of directors in to help. mike is the ceo, a consulting firm that helps clients grow their bottom line. he is also a best-selling author and has a book coming out later called "profit first." and steve strauss is a columnist at "usa today," a best-selling author of 16 books. great to see both of you guys. >> great to be here. >> lots of books between you two. i hope to get a lot of good information out of you. the first question is about

making online contacts clients. >> how do i turn my social media followers into customers. >> i love this. you can spend all of this time getting followers, if they are not customers what's the point? >> yeah. you have to recognize that the vast majority of people following you on social media are just freeloaders, coming through and going by. so you got to pick out the ones who are the loyal customers. it's three steps. first of all you have to identify who they are and the trick is give your group a name. jimmy buffet did with it parrot heads. once you give them a name they start using it that is your group of loyal customers. ask their permission to market to them. get their e-mail address, mailing address, phone number so you can communicate to them. third, give them exclusive offers, stuff specific to them. stuff that they can get that no one else can get. >> got it. steve, anything to add? >> couple things.

as you know jj i started my own start-up called the self employed, we have an active facebook page. we hit 25,000 likes yesterday. thank you very much. and it's great to have a facebook page that is active but getting them to the website is another thing. this's a couple things. one, have posts and of course link to the page on your website that has the call to action. or create a special tab, something like that in your social media. second you want to have call to action within your social media. so for example, on twitter your background wall paper could have a special deal. the page says 20% off with a coupon code. within your social media you are having a call to action. and then the last thing i would suggest is people might want to check out pop shops. these are really cool tools that you can add to your social media especially facebook and take your online store and post it as

a post. it will say special on sweaters, click here so you can be selling on your facebook page. >> great ideas. i love that host gator one too. 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 to your team, join your team, in order to gather attention from investors who want to see a team together before they actually invest. >> i like how he says most people need cash or money to live off of. i would say the vast majority. when you don't have a lot of money to pay, how do you kree ute a good team so that then you can get the money? >> that's a great question. i would use the acronym ceo. culture, you have to create a good culture in your new organization where it's fun and

interesting and giving people valuable work and that's going to attract some quality talent. e is equity. if you are not going to pay cash you have to pay equity. so give equity. then o is opportunity. show people that there is room for advancement both within the organization and that your business is going somewhere. if you can show those things people are going to hop on and hopefully figure out how to deal with the cash some other way until things get moving. >> sometimes it's hard to do that when you are very new. >> yeah, i think it's putting the cart before the horse. you have to understand investors want to get a return, they want it from a healthy strong company so the first thing isn't build a team. build the concept. you may have to do it yourself. they try to get names on the table, show investors look at these great names. the investors know they don't have their skin in the game they are going to leave. start building a strong concept, strategically take time to add people, sharing equity or

whatever is necessary to build a strong healthy company over time and then seek investors. do not start by seeking invest terse from the start. >> this is a question about an outsourced sales force. >> i was interested to hear if the group had experience with developing an outsource sales solution and what kind of compensation you have seen. >> great question. i've heard good things and bad things about outsourcing sales force. how do you think about it? >> depends on the interesting. manufacture reps, if you sale physical product you want to go to reps that have the relationship with the retailers. for me to get to walmart, forget it f. i go through a rep, somebody that has an established relationship they will get me in. if i'm in a service industry, there is no established outside sales reps i can think of, you have to build that in house. >> how do you go about finding good sales reps and how to

compensate them? >> well, it's like anything else, to find a good sales rep or attorney or partner, networking is best and social media again is 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 and they are independent for a reason because they like it. they are entrepreneurial as well and often represent more than one company. so you have to appreciate that they like their independence, they like a commission structure that allows them to be entrepreneurial and then you want to 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 the you are going to hire outside independent sales rep. you have to show why your company is going to give the advantage to get to where they want to go and make the money and have the fun or whatever it is they like to do being independent sales rep. >> thanks you guys. love picking your brain. great to see you guys. we're always finding great small

business advice on twitter so let's see what is trending. entrepreneur and "huffington post" blogger states if you really believe you are delivering 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 the inspirational dave anderson with great advice. culture tip, a mission statement isn't a formality. it unites teams behind a common purpose that makes them unstoppable. thank you everyone so much for joining us today. if you want to learn more about today's show all you have to do is go to our website. it's open forum.com/your business. plus we have web exclusive content with more information to help your business grow. you can also follow us on twitter, it's @msnbc your biz. coming up next week the

masterminds behind the world's most well known water displays reveal their secrets. versatility. >> and the fun here is what happens when you get those different disciplines, people together in the same room brain storming and you come up with stuff that you would never get with 100 of the smartest people in one field all locked 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. till then i'm jj ramberg and remember, we make your business our business. 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. there there are 435 members of the u. sft house of representatives. yeah, sure some of them have been there a long time and they're famous, but honestly there's more than 400 of them. most of them you couldn't pick out of a lineup. this guy you could pick up out of a lineup. you will remember this guy. >> congressman michael grim does not want to talk about some of the allegations concerning his campaign finances. we wanted to get him on camera but he as you saw refused to talk about that. back to you. what? i