Telecom & Technology Consulting
1960 may seem like a long time ago, but an article written by Theodore Levitt that year still influences almost every business on earth. Levitt, who was a professor of marketing at the Harvard Business School, wrote the piece “Marketing Myopia”, which can be summed up like this: Companies can get too focused on production when they need to spend more time understanding customer needs. Failure occurs when they focus too much on selling and not enough on marketing.
In lectures Levitt told his students, “People don’t want a quarter-inch drill. They want a quarter-inch hole.” And he famously pointed out that railroads (at the time) were failing not because trains lost relevance, but because company executives thought they were in the railroad business rather than the transportation business. Their myopia came in the belief that they were selling a service, when in fact their real business was serving people who needed to go from point A to point B.
The cure for retail myopia
Fifty-eight years after the publication of Levitt’s article, retail executives would be wise reacquaint themselves with his prescient words. This is because some retail companies have acquired their own case of myopia. In this instance, they believe that the Internet and mobile apps destroyed their market share, when in reality it was because they didn’t adapt to new customer demands. Specifically, they haven’t put in the effort to understand how 21st century customers want to interact with their favorite brands. They blame technology for changing customer behavior when they need to adapt to better serve those customers.
But one-time changes don’t go far enough. To compete for the long-term, retailers need to implement a culture of ongoing change. For example, while it’s smart to have the best CRM possible, that technology will not do much good without having the best possible understanding of your customers. How can you create better relationships with them? How can you help them find the products and services they truly need, not the ones you’re trying to sell? How can you create more efficient, more fulfilling experiences?
Much of the solution has to do with a technology that was developed millions of years ago: Our ability to listen. Accordingly, retailers must create opportunities for customers to share what’s on their mind. They will happily tell you what they like, what can be improved, and what they abhor about a product, a service, your shopping cart system, any other facets of your business. They will tell you why they bought a certain food processor from your competitor instead of you. Most critically, their opinions and ideas won’t just provide insight, they will also open doors to solutions you haven’t even considered.
Gathering customer insight helps you to establish a culture of ongoing change. The culture then flourishes with data collection technology that allows you to analyze this information. Rather than pushing your offerings based on internal beliefs or sales quotas, you are reacting to what people actually care about. And as their desires and demands change, so can you.
Online shopping changed retail in both how companies sell and how consumers buy. But the retailers who have best captured hearts, minds, and market share are the ones who did more than build slick web sites. They did more than hire the best UX, UI, and SEO professionals. They changed their perspective and implemented a culture of ongoing change.
