Monday, January 10, 2011

Your Customers Are Like Water

Lots of businesses put terms and conditions, access signups/restrictions and other things in place to ensure that their customers purchase or use their products and services in a particular way. Sometimes this is completely justified and the average consumer doesn’t mind if it is clearly explained to them why certain arrangements are in place. and how it will add value to them.

In contrast, I call anything that makes the transaction/relationship more difficult than the customer perceives it needs to be and/or doesn’t add value, a “rock”. It is even worse when they put rocks in place that are designed to manipulate the market (or rip customers off).

I call them rocks because … well … imagine your customers are a river. Moving along at a fast pace, getting on with their lives. Then there is you, a business, on the banks, hoping to grab their attention as they speed past. Sometimes they will slow down and interact with you. Sometimes they keep going.

Your standing on the bank, frustrated at the volume of water passing you by. So you throw a great big dirty arse rock in the middle of the river. It hits the bottom but is big enough that you can still see half the rock above the water.

What happens? Does the river slow down? Of course not, the water just goes right around it. Carries on. Doesn’t care about your feeble rock. Loser.

While you can dam it up completely, this isn’t usually a viable option for one person (business) standing on the side of the river with a pile of rocks. Even if you throw heaps of rocks in and manage to block it up pretty good the water won’t stop at your rocks. It’ll just find a path of lesser resistance and it will carry on.

Mostly it is only governments and really large industries/companies that can truly re-route or dam a river.

The point is, if you put rocks in place, and the customers don’t see the value or the point, or worse still hey think it is unfair, they will find a way around it or they will go somewhere else.

Take the iTunes and Beetles scenario at the moment.

Australian music fans are forging foreign iTunes accounts to make big savings on their purchases. The practice, which is a direct breach to iTunes terms and conditions, has exposed the inflated price that Australians pay to access songs off the popular music and entertainment site. By creating an American iTunes account through the use of a US credit card or gift card, users are saving up to 80c per song and $7 per album. The recently released Beatles box set collection can be bought with a saving of more than $100. Deals offered on the internet also include $US50 vouchers on sale for $US40, increasing the savings even further for music buyers.Not only limited to music, the same price differences can be applied across movies, television series and audiobooks — even titles that are not available to buy in Australia. Read the full story here>>

iTunes ripoff

While the practice might be a direct breach to iTunes terms and conditions, consumers don’t care because they are being clearly ripped of by the rocks iTunes tries to put in place.

Another example is a website I visited recently to download some management templates. The templates are free, everyone in the industry uses them and loads of other websites provide them free as well. To download them you don’t have to complete a registration form or anything. However, the site says “If you wish to use the templates for anything other than for your own personal use, for example for your organisations internal use, to distribute copies to the public, or to re-use content from the templates etc, then you will need to apply for a PSI Licence from OPSI. Further information and instructions on applying for the PSI licence are contained in the following link”

Ummm, why the hell would anyone want management templates for personal use? Of course they are going to use them for work. Do you think many people apply for a licences? Of course not. They either ignore the rock or find a site where there are no rocks.

Why do companies even bother? Why don’t they just focus on great value and customer service?

What weak arse rocks does your company put in place because it gives senior managers a false sense of control/security? Or do you have any examples of weak arse rocks that companies have in place?