Sell Something People Want
Those of you who live in Australia might be aware of a fascinating battle going on for one of our most famous department stores.
Myer, which was once a thriving icon and blue-chop stock, has since entered Dinosaur territory, and you know how I feel about that.
Their largest shareholder, Solomon Lew, is publicly calling them out and demanding change, this week outlining their seven step plan for turning the company around.
What I found particularly interesting is point 3: start selling product customers want.
They are correct, it’s a major problem within the business.
What’s frightening is that it needs to be suggested, although it’s a common flaw amongst new social enterprises too.
Think of it this way: what reasons could there be for NOT selling something people want?
Myer’s main threat, Jeff Bezos, famously said:
“Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great.
Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.
No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.”
Does a company ever deliberately design something unpopular?
Generally not, it’s usually a byproduct of a faulty system.
There are two types of reason for a company unintentionally selling something that nobody wants; ignorance and ego.
This is when a company believes they are doing the right thing by their customer, but it’s because they either haven’t asked the right questions, or misinterpreted their behaviour.
Maybe the company didn’t do any testing.
Maybe they tested with their friends.
Maybe they tested with the only 20 people who wanted that particular good or service.
Maybe the company forgot to consider their direct and indirect substitutes.
Maybe they didn’t look at their Business Model Environment.
Maybe their offer has already been integrated into a rival’s product.
These are innocent mistakes, but that doesn’t mean they’re acceptable.
By misinterpreting your market’s signals, you invest in inventory that won’t move, and waste good opportunities to create your initial fan base.
Realising your mistakes will be painful, but it’s better to address the real problem rather than pretend that it will magically get better on it’s own.
Most major brand failures have stemmed from the arrogance of its leadership, who decide that they no longer need to compete on quality.
The famous examples include Kodak, Blockbuster and Taxis – each of whom could have lifted their game but instead let rivals outpace them.
This comes from an unfounded confidence, that customers are captive and/or loyal.
Yes, people are loyal to the best offer, and give their favourite brands some leeway.
But when it’s easy to switch and draw direct comparisons, most customers dump mediocre brands without hesitation.
The jury is out on Apple’s move to dump the headphone jack and add a touchbar to their computers – innovations that nobody asked for.
Apple have made a bet that this is in the customer’s long term interest, but the market has yet to prove them right.
Whether that’s ego or genius will be determined in hindsight.
Unfortunately, there’s a subset of the Ego category with a noble veneer – social mission.
Entrepreneurs believe that because they are working for a good cause, they are allowed to under-deliver and have customers say “thank you”.
This manifests itself in several ways:
Slow delivery times
High price points
Poorly designed websites
Lower quality control
I’ve seen it play out time and time again.
The entrepreneur cites the cause as being a reason for customers to buy, when in fact the social story is a sweetener, not a dealbreaker.
Your social story can attract customers, but it can’t fool them.
If you’re not selling something they want, they won’t stick around.
In which case, you need to either become brilliant at acquiring new prospects, or start selling something popular.
I can tell you which one is easier, and apparently so can Solomon Lew.
If Amazon is going to win, it won’t be because of anything unfair.
It’ll be because they made customers an enticing offer.
If a business is too slow to see this coming, and needs to be reminded to sell things people actually want, maybe we won’t be losing anything too valuable after all.