In 2017, I wrote my Business Rule #1.
Here’s a more complete list.
#1: Have what customers want. Corollary: They don’t know what they want.
#2: Have it where they want it.
#3: Have it when they want it.
They sound simple. Most laugh when they hear them.
But, businesses too often violate these rules.
Sometimes they violate these rules because they miscalculated.
Coke’s New Coke disaster is a ‘classic’ example of that. A key mistake Coke managers made was to assume the results of blind taste tests represented how customers would behave in the real world. One difference, for example, was that while a sweeter drink fared better without food, lots of folks preferred Coke Classic with food.
Sometimes it’s a conscious trade-off.
The chef in the linked post closes the kitchen in her restaurant when the last person who’d like to eat there finishes ordering. Most other restaurants, however, make the conscious trade-off to close the kitchen at a set time every night, because keeping it open later doesn’t pay off. They don’t get enough extra customers after that time to make it worth their while or cover their costs.
Sometimes they simply don’t understand what their customers want. There’s a shocking number of folks in business in this camp.
In the early 2000s, Walmart became so singularly focused on low prices — what they thought their customers wanted — that they let the client experience slip. Stores got sloppy and checkout lines were long as they tightly managed their cashier labor.
Even price sensitive customers, like myself, got turned off and discovered that you ‘get what you pay for.’ I found myself frequenting Target more. The prices were higher, but the stores were well kept and the checkout lines were short.
It turns out that while price matters, so does convenience and experience.
To Walmart’s credit, they noticed and responded by investing in client experience by cleaning up their stores and shortening the checkout lines, just as they are now responding to the new conveniences innovated by Amazon.
The best businesses over the long haul tend to do the best job at developing a deep understanding of these simple rules.
I should mention that when I discuss these rules, folks tend to agree and say it’s as simple as asking customers what they want.
That’s where the corollary to the first rule comes into play. Customers really don’t know what they want.
Most don’t or can’t articulate it well. If they could business would be easy.
Finding out what customers want is more of an iterative, trial-and-error discovery process than a task to be completed.