Tuesday, December 29, 2015

The Nebulous Customer Value Proposition (Tradecraft)

A recent blog comment was basically this: I shop at a brick and mortar game store. I spend a lot of money there. I use the game space and have a great time. What is my duty to support this store? When does supporting the store become charity? What do you, as a store owner, expect from customers like me?

The answer is: I don't know.

This is a taboo subject amongst retailers. It's taboo because we're insecure in our belief that we provide a UVP, Unique Value Proposition. We're not sure we offer enough value to customers, so we tend to tread lightly in the area of customer expectations. We try light guilt, subtle suggestion, and the promise of a social good to make the sale. We'll take your card sleeve purchases, even though you bought that $100 board game online (for $60). It's good my friend; no worries. We won't say anything during the Magic pre release when the quarterly pre-release customer, who we only see this one day, sneers in a way that begrudges our existence. It's cool.

We'll take all comers. We're even afraid to offend when being abused. The abused retailer is a common theme in retailer forums. The buy nothing D&D behemoths who comes in with their 2-liter soda bottles and wreck the bathrooms. I mean, that guy might buy a set of dice one day, right? Lets not offend him. Yes, they violate the "no outside drinks" sign, but his buddy, the DM, buys books sometimes!

We're not really sure how many customers are rational actors and how many are acting charitably, possibly against their own interests.  Price is obviously what we're talking about, since our three legged stool of price, service and convenience is a bit wobbly on that first leg. We don't compete there because we can't, yet we fail to properly monetize the services that make us special, because we believe game store customers won't pay for that value. They'll spend $15 for a movie ticket, but many will balk at a nominal fee to use your space. It costs me about $250/day to have game space. Will customers pay for that? The answer for us is they will, to a limited degree. The answer for many stores is probably not. $5/week to some people is a hardship. I say stay the hell home if a fiver is gonna wreck you. The other store owner is afraid of losing them as a customer.

It's also fairly true that we, a) make gamers by introducing them to new games and talking with them about the hobby, and b) many veteran gamers graduate from brick and mortar stores and no longer need us. Somewhere between "a" and "b" are many customers who aren't quite sure they value our unique proposition. As a retailer, this ambiguity is maddening.

I've talked with staff about my magic Wand of GFY. Imagine you're in a relationship where your partner isn't quite sure they want to be with you still. They liked you initially. You had a lot to offer. You're certain they'll leave you eventually. They always do. But you just don't know when. That in between zone is a horrible psychological burden. Heck, going from relationship to relationship like this is pretty much the definition of dysfunctional. Wouldn't you sometimes want to wave a wand to make them decide?

The Wand of Go Fuck Yourself is the retailer fantasy of waving that wand. Customers who see your Unique Value Proposition will stay. Those that are wobbly will leave. Now, nobody is doing you any favors. Everybody is certain about what everyone is offering. The amazing advantage would be we could talk to all those who value us and better tailor our business to satisfy their needs. Customers assume we already know how to do this, but we don't. We do a lot of predictive guesswork.

We wouldn't wave the Wand of GFY out of anger or hatred. We would wave it to better serve customers who value us. To save the village, we must destroy it.  Unfortunately, the number of leaving people would be anywhere from 1-100%. We're uncertain exactly how much charity and how much unique value customers are perceiving.

It's also unlikely customers accurately know how they feel. If you think customers and consumerism is rational, you know nothing about why people buy. That guy on the Internet, who can't fathom why people don't buy everything online? He's a moron. He can't understand because he doesn't understand human behavior.

As retailers, we barely understand people, which is why we'll never wave the Wand of GFY. We simply don't know who would be left, if anyone. But sometimes I want to watch that bridge burn. I'm certain I could build a better bridge, if I only had better design requirements. I'm pretty sure it involves roasting my own beans.

EditRetail is basically two steps forward one step back. It's building a satisfied customer base faster than you lose customers from the many variables that cause attrition. Wanting to wave a magic wand is wanting to clear away all the two steps back in the mistaken fantasy that you could somehow freeze reality to serve the one step forwards. You can't stop the process. But wouldn't it be amazing?

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