Mad, Stack it deep, and Sell it Cheap
Devon MacGregor, know to his many friends as "Mac," jokes about being true to his Scottish heritage when he opened his warehouse style store selling odd lots and large quantities of basic household staples. Mac and his partner, Donnie Antonio, talked for many hours as they planned the new company launch. Donnie felt they would be better off setting up a more traditional retail store with attractive merchandise displays, lighting, and a "classier" looking place. Both men had recently graduated from State University and were committed to building a successful retail store, but they needed to get agreement on the focus of their business.
"It's all about value proposition, Donnie," Mac said. "If we try to be all things to all people, er'll be competing with all the big boys. We can't be a Walmart or a Target. We're little guys. We need to give people something different, and the best way to do that is to give great deals. Our customers are cost-conscious. Let's stick with out stack 'it deep, sell it cheap' philosophy." After considerable discussion, Donnie came to agree that is the direction they needed to take.
Probes
1) If Mac and Donnie stick with this value proposition, how might that affect customer service? What are the pros and cons from the customer perspective?
2) What expectations would you have as you went to shop at their store? Be specific---what would you expect it to like?
3) How can they best stick to their value proposition? What should they avoid?
4) Is customer service in such a low cost operation less important than it would be in a full service retailer? Defend your answer.
5) How could Mac and Donnie best avoid customer turnoffs? Exceed customer expectations?
This is Chapter 6 from Customer Service: Career Success through Customer Loyalty, 6/e, by Timm.
Case 2
Back From the Future
Many of you readers will never see a telegram, but most are familiar with the history. In 2006 Western Union delivered its last telegram. The telegraph industry's life was taken, definitely and brutally by technological change. For more than 150 years, the telegram stood for immediacy and importance. It was an icon for urgency. But now, Western Union has closed down it telegraph service around the world. Email, instant messaging, and faxes are the new technologies the telegram could not survive. So, Western Union has reconfigured itself int0 a business primarily dedicated to wiring money.
The shift from teletype and telegram to the new technologies represents one aspect of what some business consultants term a "paradigm shift"---a discontinuity in the otherwise steady march of business progress. There are many examples of a lesser scale. Think about the music business. Some people alive today can remember the advent of radio and TV. Many have seen the evolution from vinyl records to 8-track tapes, to cassettes, to CD's, and now to MO# and i-Pods. Once thriving music shops specializing in those odd antiques---records!
While once a hot business, "video" stores are virtually gone. Having made the transition from videotape movies to DVD's, they continue to face the competition of Red Box-type vending machines and other delivery systems that allow customer to access movies without leaving the comfort of their homes such as on-demand movies through cable, satellite, and cellular phone systems.
Looking further back in history, the automobile was another discontinuity, one that radically transformed both the economy and society. When the automobile first appeared, it seemed to be merely a horseless version of the well known carriage. No one could have predicted the consequences of the automobile's introduction. Who would have imagined that a noisy, smelly, unreliable machine would eventually be responsible for the creation of suburbs; the fractionalization of families; and the growth of supermarkets, malls, and the interstate highway system? For that matter, who among us pictured the day when automobiles routinely included more electronics than the early spacecraft or when on-board electronic communications systems can call for help or open an accidentally locked door?
Probes
1) How has technology shifted in your adult lifetime? What are the most significant examples reflecting these kinds of paradigm shifts in recent years?
2) What future shifts do you envision? Be creative in describing possibilities.
This is Chapter 7 from Customer Service: Career Success through Customer Loyalty, 6/e, by Timm.