Lionization — reversing the house edge in favor of the customer

assume every customer is the Lion — and your job is to increase the Lion’s Share

by Harry Edwards

Hundreds of millions of people helped the casino and financial industries generate over a $100 billion in the USA last year alone. With the global array of online gaming, trading markets, lotteries — the money lost taking risk on negative expectation situations — while huge is continuing to grow. The intent of this article is to outline how start-ups can make money by reversing the house edge in favor of customers looking for increased performance. Who isn’t?

To Lionize means to treat one with great interest or importance. The idea here is that a huge potential exist to increase the benefits of risk takers by giving them improved performance and quality services. The benefit to you of giving customers the lion’s share is it attracts and retains customers by providing them with better monetary results.

While tokens, rewards and recognition, games and similar treats might be a real turn on for social media and game audiences — the so-called gamification approach might be a sufficient motivator to increase customer retention. However, such features will fall short with a bottom line orientated audience looking to generate — real money.

Lion’s Share

The lion’s share is an expression which develops from a number of fables ascribed to Aesop Fables with the basic situation of an animal dividing up a prey in such a way that it gains the greater part of it. A fox joins the lion and donkey in hunting. When the donkey divides their catch into three equal portions, the angry lion kills the donkey and eats him. Then the fox put everything into one pile, leaving just a tiny bit for herself, and told the lion to choose. When the lion asked her how she learned to share things this way, the fox replied, “From the donkey’s misfortune”. The source of the above story variation and art below is wikipedia.

Why?

Setting up a start up firm that helps investors, traders and risk takers make money gives you an opportunity to outperform the existing process used by current participants. While numerous inefficiencies and inequalities currently exist — few significant remedies are being offered to financial customers. Conflicts of interest exist that are similar to the donkey taking food out of the lion’s mouth. However, the lion is the customer putting up the money — while financial firms with the exception of casinos are offering to increase or maintain it.

If your start up designs a way to increase the lion’s share — you can attract and retain customers who are interested in increasing their return performance. And the best part is the existing risk taking fields are 1) very lucrative as demonstrated by hedge funds fees and 2) the increase you are going to use to deliver customers greater performance is the house advantage. Hence, you can increase the Lion’s share — out of pockets of your competitors — who are burdened with the belief that the best way to boost their own bottom line is cutting it out of the lion’s share.

How?

The idea behind Lionization is to create a really big edge — by boosting monetary performance. For example, a start up can do this by creating transparent remedies instead of tolerating customer dis-satisfactions with the financial industry. It does not matter whether the competition feels it is their job or not. Your job is to increase the Lion’s share.

Here’s how a football coach introduced a new remedy in the life insurance industry that turned into billions with the theme buy term and and invest the difference. There are plenty of opportunities left to introduce concepts that improve customer benefits that could have an even greater impact in the financial fields. Below are three concepts that can help to reverse the house edge in favor of the customer.

• Private sector insurance to provide safety of all investment / trading funds that extends beyond the limit’s of government insurance such as FDIC.

• Execution service — which lowers transaction cost, eliminates misuse of funds, restricts disclosure of positions, and uses deposits only for the customer’s interest.

• Introduce mechanisms that reverse the house edge in favor of the customer — using the advantage in a process similar to a casino to improve performance.

Maybe this combination of task is not currently in the job description of firms in the industry. Ask yourself — if you were an employer forced to choose between which of two employees to let go — which would it be; a) the employee that just told you — it’s not my job or b) the employee that did the job — he saw needed to be done. Just as employers are attracted to employees that do the jobs they recognize need to be done — customers are attracted to entrepreneurs who remove obstacles hurting their bottom line.

Lionization is based on the concept that increasing customer profitability will attract and retain customer loyalty faster than anything else. In a lucrative financial industry dis-satisfaction is at record level. The opportunity to benefit from from the donkey’s misfortune is ripe.

Lionization is a disruption tactic that trumps other game strategies because it offers more significant benefits to customers. Just as the lion — is at the top of the food chain — monetary issues are the #1 concern for customers.

This blog is part of a series that will outline the concept of lionization so that followers can understand how to create start ups that use it to increase market share. Details on how you can collaborate and use this concepts including mechanisms to deliver a house edge will follow.