I was watching the news this morning, when the ever predictable financial reports came in from so-called experts. This is normally the point at which my wife is telling me to calm down because I am yelling at these experts professing my disgust at their insights. This morning though, what they were saying took the cake. The whole cake.
They talked about how consumers needed to start trusting in businesses more, as to lift both consumer sentiment, as well as business sentiment. They want consumers to change their behaviours in order to help business.
Mind your business!
Financial and market experts are often overthinking the simplest equations. In this example, they are looking for ways for businesses to succeed without changing. Of course, in typical traditional business-speak, they end up with the concept that everyone around them must change because what they are doing is perfect. In this extraordinarily arrogant stance, they have forgotten the fundamental purpose for their existence in the first place; delivery of products and services that consumers want. Of course, if they are focusing on that purpose, they are achieving other cool side-effects like making a profit, growing, and and satisfying a whole bunch of people in the process.
Most organisations have no idea about this simple fact of existence. Instead they chase profits through attempts at manipulation of the public through divisive marketing practices, or downsize their internal operations processes in an attempt to increase their profits and organisational savings, or maybe even things like flipping bad investments. All of these actions have absolutely nothing to do with achieving the purpose of their existence.
We hear of businesses all the time coming to idealistic realisations around focusing on their core business, going back to basics, or remembering their roots. The trouble is that most of the time, they are never really able to get back there. Laden with the additional weight of massive structure built over the years, it’s nearly impossible to escape the shackles of traditional corporate burdens. Bold leadership is needed to break the chains and reimagine the business as it should be, free of weight, and focused on customer purpose.
The customer is actually right
Customers always know what they want. It’s just that most of the time, they don’t know how to ask for it. So what companies try and do is preempt what customers ask for. They create packages of services, pre-boxing the most common requests into little bundles ready for people to consume. Product managers often like to use an 80/20 rule when they ‘design’ a product. Assumptions are made that if they can deliver most of what most customers want, it will be good enough. They try and fit an average, a peak in their bell-curve.
Interesting thing about averages; they don’t really exist. The US Air Force actually worked this out back in the 50’s (Toronto Star), and yet for some reason, businesses all around the world allow product managers tell us that 80/20 is ‘good enough’. They actively teach accomodating for most, as opposed to all, in many design schools!
As you grow that business though, if you’re only accomodating most, and not all, that 20% of unfilled demands becomes a massive thorn. There becomes needs to fill that gap by fielding unhappy customer’s phone calls, missing sales opportunities, and leaving many customers dissatisfied with what they are getting. It can also become a massive gap in your bottom line… imagine, having 20% more customers paying for services, simply because you did exactly what they wanted, how they wanted, when they wanted. Wow.
The only thing required to achieve it is to actually believe that the customer is right. Then to start doing what it is that they actually want.
Holding onto our legacies is great. History is a wonderful thing, and everything we have ever learned in our past, through and up to this point has made us who we are. The same is also true for businesses – history leads to learned behaviour. Now that we are aware of that though, we can make meaningful changes in the way we allow those legacy actions to drive current and future ones.
Continuing to do things the old way, because that is the way we have always done it, shows that we are not willing to learn, evolve or change. Customer demand does not remain static, so businesses should not either. This behaviour flows through everything that they do.
Many businesses cry about downturns in the market, or consumers not interested in their products or services. Yet, they stay the course: “Consumers will come back to us”, “It’s just a rough time to be in this business”. Sorry businesses, what you’re trying to say is it’s not us, it’s you… and forgetting that it’s you that needs to create and provide a product and/or service that people might want in the first place.
Myer in Australia is a great current and timely example.
The retailer has taken stock downgrade after stock downgrade, blaming market downturns and poor trading for their current predicament. They aren’t willing to change or listen to their customers… it’s the customers that need to come and buy their stuff, the way they want to sell it. Riiight. It couldn’t have anything to do with the consumers, changing the way in which they are consuming services. Online being the way most people are looking to buy things nowadays, and the doors of trade opening up around the world… and the retailer not willing to compete on a global scale.
Change your business, not your customers
All businesses change. The oldest business in the world, the Hudson Bay Trading Company in Canada, started off hundreds of years ago sending fur pelts back to Britain. They aren’t doing that anymore, clearly… and in the face of that, they have learned the hard way that they needed to transform or die. They have reinvented themselves countless times, and are a shadow of their former selves.
Consumers will always buy things; this is life in a capitalistic market. In order to make sure we are able to sell to as many consumers as possible, we have to provide them what they want in the first place. Customer is number one. Putting them first will allow the business to prosper. Putting the business first invalidates the need for the business completely.