“If I had asked people what they wanted, they would have said faster horses.” – this is what Henry Ford said long before consumer psychology became an important part of marketing and sales.
During the whole GDPR psychosis and all the other initiatives that should (supposedly) protect the customers, have we ever wondered do customers want to be protected?
If you asked them directly, they would probably say – YES.
But we keep forgetting that we’re not rational beings and that we can’t always expect to get an honest response to our questions. Customers are sometimes fine with the “status quo”, although there could be a better option for them. To prove this point, I will tell you one very interesting and a true business story.
HOW A “FAIR” STRATEGY ALMOST RUINED A BUSINESS?
The year 2011 a famous American retail chain JC Penney brought Ron Johnson to CEO position.
Before moving to JC Penney, Ron Johnson was a vice president of retail operations in Apple and a vice president for merchandising in Target. So, we’re not talking about an amateur, but a pretty experienced manager.
Ron wanted to do something innovative and he decided to offer the customers transparent and fair prices, by abandoning all the retail tricks that almost every retailer is using in order to make the offer more attractive. Ron’s vision was to create a business without coupons, without false savings, without promotions and discounts – he wanted to simply offer a fair price to his customers right away.
How customers reacted to Ron’s fair policy? Terribly… The revenue has dropped so dramatically that even today this event is considered as one of the biggest strategic failures in the history of retail industry. IC Penney’s stocks have dropped for 51% and Ron got fired…
IT’S NOT GOOD TO EXAGGERATE IN ANYTHING
Every parent loves their child and takes care of them. That care can sometimes be exaggerated so the child lives under a bell jar, unprepared for the interaction with the real world. Also, this care could be too mild and the child could be overexposed to the streets and the bad influences of the society.
Your customers are just like your children…
Behavioral marketing specialist, Google Growth Engine Ambassador (Adriatics) and founder of Promosapiens. Dalibor is a regular speaker at the international conferences: Shopper Brain (Netherlands), Dubai Lynx (UAE), Euroshop (Germany), Family Thinking Marketing Forum (Poland), Branding Conference (BiH), MEKST (Serbia), HOW Festival (Croatia), just to name a few… His lectures with the practical examples of behavioral marketing are regularly the highest rated among the audience.