Design & All Things Web

There are a number of things businesses do that aren’t in the best interest of the consumer. A lot of them are unavoidable offshoots of wanting to maximize profit, but some of them can be shortsighted, lazy, or even dangerous. While I’d never say some of these practices can’t be extremely successful, I would certainly argue there’s a good chance you’re sacrificing long term equity for immediate gain.

1) Trying to Prey on Fear

Plenty of companies thrive on using a consumer’s fear of missing out on the product they’re after by using a manufactured scarcity to push people over the buying threshold. Suddenly the car that’s been sitting on the lot for six months has “several other potential buyers” as soon as you express some interest. Similarly, Gamestop insists you pre-order your games despite the fact that they’ll have dozens of additional copies laying around the store, and has even gone as far as refusing to sell these extras to customers in an effort to instill the value of pre-ordering.

While this strategy might be successful in the short term, it commoditizes the sale and reduces or eliminates customer loyalty. By manufacturing scarcity you encourage your customers to snatch up the product they want as soon as they find it, and it’s likely your competitors will be the beneficiaries.

I was recently in the market for a new bike, and as such, completely expected a certain amount of “used car type sales tactics” that would eventually culminate in someone asking me, “What can I do to get you on this bike today?” Shockingly, I was met with the total opposite, and the sales force practically bent over backwards to prevent me from making a hasty decision. They made some recommendations, helped me narrow it down to two, and then said they’d hold both of them for me so I could come back when it was sunny out and take them both on a “proper ride.” No pressure, no mention of possibly selling the bike I wanted while I was mulling over my decision. The end result is I now have a stronger allegiance to that particular retailer than I probably should…and a sweet new bike.

2) The Perpetual “Ending Soon” Sale

Every city seems to have a furniture store that has been going out of business for the past three years. The commercial shouts about how you better “hurry in this weekend, because everything must go!” The logic is sound enough. Everyone loves a good deal, so if you make people think you’re having an incredible sale for a “limited time only” they will come running. The only problem is, after two-plus-years of the same ploy the sale means absolutely nothing. Not only that, it has now devalued everything in the store to the point where if it’s not on sale, there is no reason anyone would want to buy it.

Allposters.com is a prime example of the perpetual sale. Here’s the last six months worth of sales offers I’ve received:

While the constant barrage of emails have (arguably) kept them “top of mind,” the offers are pretty meaningless and eventually just turn into noise.

Contrast this with Active.com’s considerably more intermittent–and product specific–offers that still maintain some “top of mind” value but don’t give me the expectation that anything I purchase through them should always be at a discounted price.

Granted, the immediate response to any individual offer will probably be less for the second example. However, the long term results will be more items sold at full retail and higher conversions during times when there is no sale being offered.

3) Arbitrary Product Release Dates

Small tech companies seem to be the biggest offender of this particular consumer letdown. Although premiering your latest product at a conference or having a usable demo ready for a board meeting is good in theory, it’s still useful to remember there’s a lot of truth in the whole “one chance at a first impression” philosophy. Ask cuil. Although balancing the strains of needing to drive profits with the need to deliver a quality product is always going to be a challenge, it’s hard to recover from an underwhelming product launch or an application that was hurried into production and doesn’t deliver on the vision you promised.

At a previous company I witnessed firsthand an incredibly disappointing product launch resulting from decisions to start selling something that simply wasn’t ready for consumers. Without going into too much detail, I will say the decision to rush to market had a lot to do with VC funding and a desire to show dramatic revenue growth over the previous year. However, after watching the product devolve from its original scope into a neutered version that could “be ready by January,” it became abundantly clear that none of this was for the benefit of customers.

The end result of this major product launch was an underwhelming amount of sales, a continued retooling of the product that resulting in halting all sales efforts for a one month period, and a number of dissatisfied customers that had been sold a product failing to live up to its initial value proposition.

Obviously it’s ridiculous to think you can keep moving something back indefinitely while you fine tune it to perfection (unless you’re Blizzard). However, if you’re honest about the reasons for your “drop-dead” release date, it might just be better to cope with some internal disappointment upfront to avoid a public disappointment when you launch.

4) Strict Adherence to “Corporate Policy”

While having policies and best practices in place is always a sound idea, failing to allow for some old-fashioned common sense and good judgment can be a huge mistake. Sure, it can be easier to hide behind a generic policy, but when it’s taken too far you’re left with instances like Jo-Ann Fabrics’ refusal to let a customer use the bathroom, or Bed Bath and Beyond not letting a customer use a phone to dial 9-1-1.

This seems like a head smackingly obvious statement, but by filling your organization with quality employees who are empowered to sidestep “company policy” when all common sense and human decency is telling them to do so, you’re sending a much stronger signal to your customers.

Like I said earlier, there are plenty of successful businesses that do some (or all) of these things, and I’m not saying these can’t be profitable (the first three at least). However, as a long-term strategy, and in an increasingly competitive environment, taking a step back every once in a while and making sure your customers’ best interests are aligned with your own isn’t a bad way to do business.