Most organisations make lethal mistake in understanding customers, hurt revenue

“Bum on chairs and backs on beds is the way to more revenue.” That’s a common saying in the hospitality and tourism industry. Empty chairs at food joints or unoccupied rooms in hotels are killers of revenue generations. Long ago, Switzerland understood that a safe country, ease of transport and good food will create a parallel economy of travellers. And free independent traveller (FIT) slowly became the global norm. People who would like to backpack albeit with luxury, and many free-spirited people who despise big group travelling are now one of the biggest source of revenue in the industry.

“There are a million holes in money’s pipeline,” goes an old Chinese proverb. True that. Most organisations make a lethal mistake in understanding customers. They sell what they think will work. Does it work? Is market intelligence just a few “put words in mouth surveys?” No, it’s selling and repackaging an existing product, if necessary. 

In 1989, Santoor soap was launched and marketed as a promise of younger looking skin. The visibly young girl continued to dazzle old parents of a son for a possible match making until her school-going daughter jumps in shouting mummy. No one cared if there was any haldi chandan (turmeric-sandal) in it. Nothing new in the ingredient, you see. Vicco Turmeric always had that as the sales pitch. What clicked was the way Santoor understood the mindset of mothers of toddlers and school going children. A fear of lost youth in those women was the biggest sales tool. 
Over a period that woman has evolved, she takes up dance classes and jobs in corporates yet the crave of younger looking skin remained and made the brand as third largest soap brand in India in 2016.

How a customer and consumer thinks about a product is totally dependent on how that product makes one feel. Consumer behaviour becomes volatile if the perception of product changes. Those who bought Oats Maggi in truckloads were first to jump off the bandwagon post the lead crisis that happened to Maggi. So, understand your customers beyond marketing surveys and shift focus to needs. Arun Kumar, author of Consumer behaviour says that it is crucial to understand the following. 

Who: your real consumer is? For example, infants toiletries are a huge business but the consumer is not the customer. Only a feeling of softness and comfort can sell those products. 

Why: should people buy the product or service? Why do they believe in your offering and will they be loyal to it? Thumbs up has such loyal customers and despite its always in short supply, it’s in demand. ‘Thanda matlab Coca Cola’ was catchy yet not catchy enough to buy those customers.

What: are their beliefs on the brand? What do they think of core competitors of the same offering? Timeshare concept in India was introduced in 1986 by Sterling Holiday resorts limited who has added 29 resorts until now. Mahindra Holidays and Resorts India Ltd came in 1996 and added 50 plus resorts and counting. Its organisations’ job is to make the customer feel differently. 

Where: do they use the product? Is it a home use or office use? Regular interval or is it an aspirational buying like a car?

How: did they hear about you? Which marketing source? Was it social media or print media? Part of a promotional event? That helps in mapping the environment the customer comes from. Usually, it is termed as socio-economic.

In the end, only those organisations or brands have stayed in the game who grew with time and evolved. Customer evolves with every passing year now. So even if the offering remains the same, the repackage and relaunch does make sense.

As Steve Jobs famously quoted, “ We don’t tell them what our machines can do for them, we tell them, what they can get with our machines.” 

By: Rama Moondra
(The writer is a strategic advisor and premium educator with Harvard Business Publishing)

Source: DNA Money