It’s December. For those of us who make our living in any form of consumer business, that usually means two things:
- We have made it through Black Friday and Cyber Monday, with our projections now being evaluated against actuals.
- In less than a month it will be a new year, where we can either make the same mistakes again or invent new ones.
That leads to two takeaways I would like you to consider before the year ends:
- Customer behavior tells us almost everything we need to know to be successful in business, particularly when we study data and benchmark assumptions against metrics.
- We ignore the realities of customer behavior at our own peril, but darn it all if we don’t come up with really good reasons to flagrantly repeat our mistakes with passion and conviction.
How does our eye come off the ball precisely when it is crossing the plate and our bat is in swinging position?
It all begins with three wretched words:
BUT WE’VE ALWAYS.
Perhaps you’ve heard a few of these pronouncements before:
I know our customers complain when we send them too many emails, but we’ve always sent them at least four offers on Thanksgiving Day.
I know our customers don’t trust our pricing, but we’ve always jacked up our regular prices in the weeks before Christmas so we can mark them “50% off.”
I know it’s irrational to cover the cost of free expedited shipping and lose money on every sale, but we’ve always managed to convince our boss that losing money is the only way we can compete with Amazon.
I know our brand promise is what matters most to our company, but we’ve always managed to slip in a few low-quality products with our best inventory to even out our margins.
I know we believe our customers are loyal and have a lifetime value, but we’ve always cut our customer service costs to force our bottom line into compliance with our budget.
Yep, we know what we are doing is wrong, but we’ve always found a way to justify our shortcomings, weak logic, or poor decision-making because we’re out of time, out of patience, or out of energy to argue for doing what’s right.
Earlier this year I attended the third-annual ShopTalk conference in Las Vegas. It had grown 50% over 2017 with more than 8400 attendees. Ecommerce remains an escalating magic buzz word. There were two types of presentations:
- “People may think our proud, established, vastly well capitalized legacy brand can’t adapt to new technology, but we’ve always been a customer favorite and there’s no reason anyone should bet against us.”
- “We’re a new brand and will lose our jobs if we don’t succeed, but our investors are betting that if we brainstorm new experiments and focus on customer behavior, the results will tell us what works and what doesn’t.”
Which bet would you place with your own money?
Let me restate the choice:
- “We’ve been around more than fifty years, we know exactly what we’re doing having coined a business model for hard-won success, we’re a household name, and we’ll still be a household name fifty years from now.”
- “We have no idea if we’re going to be around in two years, but we’ll take whatever runway we have to figure out how to do what’s never worked successfully before.”
Don’t bother answering—it’s a trick question. The truth is you need some of both to win the long game, some of the newbies and some of the dinosaurs. Yet too many people convince themselves there’s little downside to a buy-and-hold strategy with “forever” companies like GE or GM. They won’t invest in a risky start-up with a funny name and an unproven business model like Amazon or Apple until it’s a fully valued blue chip.
No one knows what companies are going to win in the future, whether cemented or emerging. They all have unpredictable choices to make. It’s supposed to be that way. It’s how new companies are born and old companies die, or old companies are reborn through reinvention. It’s called creative destruction.
My point has nothing to do with improving your stock portfolio. My point has everything to do with recognizing the death knell of an established brand and bringing life or invigoration to a challenger brand.
It can be a fair fight. An established brand can be a challenger brand when it acts like an underdog—when it stomps out the status quo and humbly looks to customers for confirmation or rejection of any working thesis.
I am willing to bet few employees at Amazon or Apple wander the halls uttering the words “but we’ve always” as a response to why they aren’t trying something new. Who knows, maybe I’m wrong, maybe they are becoming slow, cynical, and comfortable that they know what they are doing. I doubt it, but if they are, an opportunity for a challenger brand is out there for the taking.
I’ll bet they said “but we’ve always” a lot at Sears.
I’ll bet they said “but we’ve always” a lot at Toys ‘R’ Us.
When was the last time you said it? Still feeling good about that?
This year’s holiday shopping strategy is already behind us. There’s nothing we can do with history except study and learn from it.
The new year awaits all big ideas, particularly those focused on truly delighting customers with a sustainable business model and a resonating brand promise.
My advice going forward in whatever you are doing?
Eliminate the phrase BUT WE’VE ALWAYS from your company’s vocabulary before it eliminates you.
Erase those three words entirely from all conversation.
BUT WE’VE ALWAYS is defensive, uninspiring, and telling.
Try something instead that hasn’t worked, something that you think might work because you have reason to believe in a thesis. Measure the results. If there’s promise, hone it with precision. If it starts to work, stay humble. Stay inquisitive. Question the potential interpretation of every collected data point. Remember that every successful idea has a life cycle, and a bad idea yesterday might be reformed under changing market forces as a good idea tomorrow.
When an idea works dependably and someone questions it in a future review, just don’t say BUT WE’VE ALWAYS done it that way. You haven’t always done it that way. It had a beginning. It can have an end. What can’t end is innovation.
Originally published on Corporate Intelligence Radio
You might like Ken Goldstein’s book, Endless Encores
Repeating Success Through People, Products and Profits
From Nothing: A Novel of Bar Music, Technology and Redemption
This is Rage: A Novel of Silicon Valley and Other Madness
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