Coming from a marketing MBA and former P&G brand manager, this headline is borderline heretical. During my formative professional years, I was incessantly schooled on how the "customer is king" and how one must hang on to every verbal and non-verbal cue that emanates from her royal self.
I recall a jarring moment in those years when I went with my father to a local sweet shop in India, only to find a long, snaking queue in front of it. Customers were waiting for their turn to buy the freshly made sweet snacks. I told my dad with all my newly-minted MBA indignation, "This is rubbish! This guy needs to know that the customer is king!" My dad replied, "Whoever can make you wait in line is king."
Think about it. That's the kind of business you want to have - one where the customer is NOT the king, but rather the guy who waits in line, money in hand, only too happy to have the chance to part with it and lay his hands on your product. Sounds like a lurid fantasy? Think again.
As customers, we actually feel grateful when the best doctor in town agrees to accept a huge fee from us and gives us an appointment weeks away. We feel lucky when the best school accepts our kids and gives us permission to deposit their exorbitant fee. Same goes for the fanciest club or restaurant in town and for the hottest movie or concert. Of course, the queues that waited overnight to buy the new iPhone are the stuff of marketing folklore. Truth is - for the most outrageously successful businesses in the world, the customer is NOT the king - the product is!
The best doctor does not spend his hours wooing his patients, the best chef does not spend his time direct mailing his customers, the best school spends nothing on marketing itself and Steve Jobs at Apple famously held all market research in disdainful scorn!
Instead, they all focus intensely on creating the best product or service that can possibly exist. In doing so, they set their standards much higher than what the customer knows to expect and create an element of awe in their value proposition. This is the secret sauce in their outrageous success.
This literally "awe-some" product or experience then goes viral via word-of-mouth rather than by pushy sales or broadcast marketing tactics and all of a sudden, everyone wants it. (Of course, nothing goes viral just by itself, but that's the subject of another post, not this one).
As their awe-some product goes viral and starts scaling, great businesses obstinately refuse to dilute their proposition in the pursuit of rapid growth or profit, rather preferring to expand supply at their own pace. This often results in a real or perceived scarcity that adds to the aura of exclusivity and uncompromising quality that surrounds the product. Harvard could treble their enrolment whenever they wanted to, but they refuse to dilute their brand. The best law firms, clubs and luxury products routinely forgo profits to keep their branded exclusivity. Even the small sweet shop where I learnt this lesson did not expand outlets or add new chefs to make a quick buck.
This potent combination of...
- a product or experience which evokes an element of awe which makes everyone want to have it or be associated with it; and
- an aura of exclusivity and real or perceived scarcity which means not everyone can get it (at least, not immediately)
... changes the power equation between the buyer and the seller. After all, the reason "customer is king" is considered marketing gospel is because of the implicit assumption of a competitive market, where the customer has all the choice in the world. The supply is much more than the demand, and the power is in the hands of the customer. The best businesses create products or experiences that are so awe-some and exclusive that their supply is less than their demand - they are sought after. That's what makes customers queue up for them and feel grateful and lucky to be able to buy them!
For extraordinary success, businesses should focus on creating a core value proposition (simply put, a "product") so powerful that it has an element of awe in it (by setting their standards so high that they deliver something customers don't know to expect) and then maintain an aura of exclusivity, scarcity and uncompromising quality around that product, while going viral with subtle marketing techniques.
Think "customer is king" if you want to spend your time chasing customers, think "product is king" if you want to make them wait in line.