The People Ruining Your Business

Your business is a participant in an ecosystem which has become very efficient at creating a market and value for certain, let’s say, opportunistic groups.

I had a meeting back in Palm Springs last winter with a CEO of an online retailer who was extremely smart obviously but was struggling with two forces on his business: affiliate programs and discounting. Now, you might say these are common practices in online (and offline in the case of discounting) retailing. And, you’d be right. But, usually companies are so far down the hole with both of these things, they can’t pull the plug or make any sudden movements.

That wasn’t the case with the executive I spoke with, he was ready to make a change. He didn’t know how to get the most out of offering discounts, and this was made worse by the affiliates who were claiming an awful lot of attribution, so much in fact that he knew this couldn’t be true. This is made even worse by conditioning people to always look for a discount (and search for “xxxxxx coupon codes”) before making a purchase. Affiliate sites, and ecommerce sites that offer a “Coupon Code” input box have created this behavior (check this out, over 3 year years old, but this is still a common practice).

Essentially in this ecosystem, there are two of these opportunistic forces working against you. For dramatic purposes, we’ll call them Whores and Trolls. These are the words that the CEO I spoke with spit out after talking through this scenario: “You mean there are Whores and Trolls and I need to sort this whole thing out” – something to that effect anyway.

The “Whores” are the customers that will go anywhere for the lowest price…they will scour the web for the best daily deal site, coupon code, or other source of lowest cost or lowest cost alternative. They have no loyalty and are only driven by price – then, they will blog about it so their friends can follow in their footsteps. It’s better if you don’t cater to them, because this will surely be a race to bottom to compete for a group that, in the end, will have no loyalty to you.

The “Trolls” are the people or companies that seek to obscure the relationship you have with your end customer. We’re talking about sites that list thousands of coupon codes that could encourage people to create new profiles each time to get a “new customer” discount or any other site that wants to build their own channel loyalty while “referring” business to your site.

There are a lot of services that add value to the buying process because the retailer or service provider has ignored them or done a poor job serving them. This is not aimed at them…to be clear. For years the hotel industry ignored the online booking process – didn’t adapt quickly enough, and online travel agents (such as Expedia or Priceline) popped up and happily took on the task (and created a lot of value for shoppers in the process). The hotel industry has since woken up and wants those relationships for themselves now.

So, these Whores and Trolls are searching the web for the cheapest way to buy, driving your prices  (and margins) down and you just might think “well, this is what it is in today’s world” – it can be, if thats what we let happen.

Instead though, what if we build meaningful relationships with our customers? What if we provided them with the best possible experience? What if we we’re totally committed to improving these things and understood that there are no short cuts?

The fact is, overly aggressive (and harmful) discounting and third-parties who insert themselves into your customer experience do so because people in business aren’t really committed to “getting better” – everyone is looking for quick wins and a quick buck.

Today, anyone can actually build fantastic relationships with their customers (assuming your product/service is a good one that people actually want/need). The only question is are you committed to doing what it takes?

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