It is harder to think like your customer than you think.
In the 1970’s when my uncle started his photography business, his job was to make things look good. With film and expensive processing, every shot mattered. Today anyone with an iPhone can take 500 shots of a product and get one pretty good one. As the market became more saturated, buying habits changed. More importantly we began to tune out the noise of marketing. Too many ads were polluting our landscape.
The movie “Field of Dreams” makes an interesting statement, and it is about half right. If you build what a customer wants, where they want it, they will come. The first three rules of real estate is of course “Location, Location and Location”. McDonalds has an amazing ability to find locations that will pay off. The real estate many of their restaurants sit on is more valuable than the restaurant itself, and it wasn’t when they bought it.f
This is true of all businesses to some extent. If you build in the wrong location, your customers won’t come. A surf shop in Fargo North Dakota isn’t likely to be the town hang out. Stop by any of the surf shops on Main Street in Huntington Beach or along Waikiki Beach and there are plenty of customers. Even during a lockdown.
One think about location is the internet. While not technically a location, it is like real estate. Being in a location that is easy to find and access isn’t easy or cheap. Selling online has become a very expensive proposition. Local stores are now competing head to head with Amazon, NewEgg and WalMart online. Once upon a time Wal-Mart was the bad guy for putting small shops out of business. Amazon is changing the game completely.
The biggest issue today is price competition and online service. Just this week I wanted some hangers for my garage. I use Flow-Wall for just about everything. I didn’t want to wait three to five days for the right parts online so I ran to Home Depot to buy a Gladiator basic kit. It worked perfectly and they price matched Amazon. Think like your customer and can you survive on Amazon pricing?
Steve Jobs gave an iconic speech the day he introduced the iPhone. He told the world they had a problem that they didn’t even know about and he was going to solve it for them. He was thinking like the customer and proving it. To bad he didn’t have Fan2Stage to hear the applause of the world.
As my Uncle approached retirement, his son, had the opportunity to take over the business. He thought product photography was dead and there fore there was no need for the business. He was right in a way. As I said before, anyone with an iPhone can take a descent photo of a product and put it in an online catalog. Oddly, the direct mail industry is still one of the largest industries for advertising spending. The business changed, and video is a key player now. In addition to creating online, print and direct mail ads we make a lot of videos for clients. A photo of the iPhone introduction speech would not have the same impact. That speech was important not only because of how Steve Jobs delivered it in person, but in how he delivered it to the world. Video has impact. It is the new product photography.
One thing that hasn’t changed throughout history is that we like to do business with people we like. You can force all the rules you want, but we still have the freedom to decide who to work with. When you go to the other side of the table and sit in your customers chair, do you like what you see?
After spending what should have been my first two years of college in the military, I became very dull. I wanted to get in, get the job done and leave. While I quickly became one of the top engineers in the budding field of networking, my business only succeeded because the demand way outpaced supply. Today that isn’t true and if I walked into a client with that same military no-nonsense style, I would lose 90% of my work.
As a business owner, you become the guardian of your customer. Even if you are selling them donuts, you are their guardian. If your donuts let them down they won’t be back. Some businesses still make a profit in spite of themselves. This happens when the demand for the product or service is far greater than the ability of businesses to supply it. Over time though, equilibrium will occur or worse. Sometimes the profits are so high in the beginning that too many people join the market and it crashes.
In 2006 the home entertainment systems market began a three year tumble to the bottom. Every day I walked into the office another brand was demanding that I buy more demo gear. It didn’t take long to realize they were just cleaning house before closing the doors. One of my favorite companies went bankrupt and resurrected twice before being acquired. Another never truly recovered because technology changed. In 2009 almost 70% of all the high end home entertainment brands were gone.
The biggest problem the home entertainment system industry had was a lack of angels. The business grew so fast starting in 1993 that the business didn’t act like the guardians of their customers. When that happens, the customers are not your Angels. You need Angels to be the evangelists for your business. The most expensive customer is a new customer. The best customer is a free referral customer from an Angel.
Our business provides technology and marketing services to other businesses. Our job is to think like your customer, and provide you with the technology you need to get the job done and the marketing services to help your customers find you. It sounds easy, and I can tell you after 20 years in the family business, it is a lot of very rewarding work.