WalMart has a plan: sell more florescent light bulbs.
They expect to score public relations points by being seen as fighting global warming. Although more expensive than incandescent bulbs, florescent bulbs use far less energy and they last longer.
WalMart's management simply doesn't get it. You dance with the one what brung ya. WalMart didn't get where they are by selling anything. They got there by letting people buy. They have the DTs. It's not the "Delirium Tremens" syndrome that drunkards get when they are near death, but the "Doing (the wrong) Things" syndrome that businessmen get, that can cause a business's death.
I don't know how to define "small business". Neither does the Small Business Administration. In 1966, the SBA thought American Motors (with $1 billion in sales and 30,000 employees) qualified for small-business set-asides. I do know when when a business is too big, though: it's when they stop doing what made them a success.
In the 1960s, the McDonald's cashier would call out your order as "3, 4, 2 and 4" and in seconds, while he was still placing the change in your hand, someone else would be putting your order - 3 hamburgers, 4 cheeseburgers, 2 orders of french fries, and 4 Cokes - on the counter for you. These days, they cook frozen french fries, not fresh, in oil with trans fat instead of lard, they can't be bothered to toast your hamburger bun any more, and you wait and wait and wait for your food to be ready. Is it any wonder that McDonald's is no longer growing like crazy, and no longer extremely profitable?
But it's not just McDonald's that loses track of what made them succeed. You can't find a music video on MTV any more, either.
Ford became highly successful with a simple, inexpensive, fun car, the Model T. By the 1950s, they had lost their way, and brought out a barge called the Edsel. They recovered in 1966 when they once again brought out an inexpensive, simple, fun car called the Mustang. Slight forays can be forgiven; the original Thunderbird was expensive, but still simple and fun. When it stopped being simple and fun, though, it stopped being the Thunderbird, and started being the Albatross.
The "Hot New Thing" in software a couple of years ago was called CRM - Customer Relationship Management. It was software to manage the sales process. There were a number of companies that made minor fortunes, and individuals that made major fortunes, because they were telling businesses, "If you use our software, your salesmen can force your product down the customers' throats".
Of course, the advertising for CRM couched it in different terms. It was about making salesmen more efficient and more effective. The problem is how companies view salesmen. They think the job of a salesman is to grab a shovel and scoop up orders that will keep the company's furnaces warm, or perhaps as mongol hordes that will rape and pillage.
In fact, a good salesman recognizes that his job is to help the customer buy. You can lead a horse to water, but you can't make him drink. But leading the horse to water is often enough. If you don't do that, he suffers from dehydration, and you don't sell any water.
The wave to follow CRM will be VRM - Vendor Relationship Management. With VRM, the customer is in charge, not the seller.
Doc Searls figures there are three key elements to VRM:
- Data Independence
- Customer-Centricity
- Reputation, Intention, and Preference
He says "Data independence" because he's thinking in terms of computers, but it really means "not getting single-sourced". When you buy a car, you can buy your gas and oil, and your tires and batteries, from lots of different providers. If you buy a cellphone, you can't switch providers.
I sat next to Jake yesterday at the doctor's office. He has Part D Medicare, the prescription drug benefit. "They were OK the first year, and when they said they were going from $60 to $80, I decided I could live with that increase. The problem was, they didn't just change the price, they changed the plan. Instead of $20 for non-generic prescriptions, and $40 for non-formulary prescriptions, I pay $30 and $60."
I'd be inclined to look around, and switch plans. "The rules say you're stuck with the plan until the new calendar year. But that's only me. The insurance company can move any of my meds from the formulary, and charge me $60, not $30, in the middle of the year."
Health insurance has always been a pretty shady business. When my first wife was dying of an incurable illness, money was pretty tight. She needed an operation. We checked and found that there were only two doctors in the state that did it, and compared prices. We went with the cheaper one - but of the $8000 fee, the health insurer was only willing to cover 80% of $5000, because they said $5000 was the "usual, customary, and reasonable" fee for the operation.
As you might imagine, I squawked about it. If $5,000 is "usual", you should be able to name somebody who usually charges so little. If %5,000 is "customary", you should be able to name somebody who customarily charges so little. If it is "reasonable", you reasonably should show that the services are available for $5,000.
No, they said. They don't do things that way. And I said, "I guess I should have asked ahead of time, to find out what you will pay towards that procedure", and the adjuster said, "No, because we won't tell you." He said that if people knew what they were willing to pay, nobody would ever charge less than that. Yeah, like that is going to happen.
In the 1950s, door-to-door salesmen made money by asking one question, no matter who answered the door: "Young lady, is your mother at home?" Even if the woman who answered the door was 90, she would laugh and invite the fellow in for a sales call.
These days, they ask a different question, although they again ask it regardless of who they're talking to, "Wouldn't you like to lose all those excess pounds?" It seems that there are only 7 people in North America who don't think they are too fat.
And you can make a mint, talking to businessmen, asking, "Wouldn't you like to get all the sales you deserve?" And nobody really wants to admit that they deserve to have no sales at all.
But you know, when you wash your face and brush your teeth, there's going to be a face staring back at you. Do you really want to make your living by making people worse off for having known you?
We were practicing VRM before it had a name. We don't do it because it's the trendy thing to do. We do it because we're selfish. If we take care of our customers - and the customers are the only ones who can decide if we're doing that - then we will keep our customers, and they will send us their friends.
So when it comes to data independence, we use industry-standard software that doesn't hold customers' data hostage.
When it comes to customer-centricity, we hold customers in such high respect that we let them wake me, even at 3 AM, even on Christmas morning, to make requests.
Our reputation is good, allowing us to have a merchant account for credit cards. Those aren't easy to get, you know. We intend to give every customer more than he expects. Instead of telling someone in mid-January that he has to pay more for meds, the rest of the year, than he agreed to, we give him more web space, for free. And when it comes to preference, we make it easy for customers to choose the type of hosting they prefer, not just the amount of space they get.
But I thought I had better get in that claim for being a VRM-style business pretty quick, because these things have a way of going south. It won't be long before someone latches onto VRM and uses it for an excuse for flogging salesmen into coercing customers into buying what they don't need and don't want.
And for the record, I don't dislike fluorescent lighting. In fact, I've replaced most of the incandescent lighting in my home with fluorescent lighting. But that's my decision, not WalMart's.
I used to really like WalMart. They were the first discounter to serve rural America. Since Sam died, though, they don't act the same.
Their empty shelves cost me an hour of hassle, driving somewhere else to shop, but they balance 12c in markup against 15c in inventory costs, and think they're clever.
Their cashiers stopped addressing me by name within a month of Sam's death, but it wasn't just my hearing my name that mattered, it was their knowing my name: if you have a name, you're a person, and it's not quite as acceptable to be rude to someone you know.
WalMart global+warming fluorescent small+business McDonald's Ford Mustang Edsel MTV trans+fat toasted bun CRM VRM Harleysville+Insurance insurance fuller+brush door-to-door+salesmen chant Sam+Walton Doc+Searls Model+T hamburger