You’re about to pay for your – frequently overpriced – latte at the counter of any one of a number of high street (or railway station) coffee bar chains and you’re asked “And would you like a Danish with that?”. Er, probably not, because otherwise you would have asked for it.
You’re about to pay for your magazine/newspaper/stationery at WHSmith and you’re asked “Would you like some chocolate at a special price?”, whilst being shown an outsize bar of chocolate. You stare at the giant piece of confectionery and wonder why you’re being offered such a bizarre accompaniment to a tube of glue.
You are buying stamps at the Post Office counter (having had to walk 50 yards down the aisle of a completely unrelated grocery shop) and you’re asked “Would you like to top up your mobile phone?” Well, no, but the availability of mobile top-ups could perhaps have been better advertised so you could have apprised yourself of the additional service whilst you queued for 10 minutes.
What is this all about? Where has it come from? Why do we feel so annoyed (or worse) at these gratuitous questions?
Getting it wrong and getting it right
Much like a great deal of poor direct marketing activity the episodes cited above appear to their authors to generate a worthwhile return if a small proportion of target customers respond. What these organizations presumably fail to measure, however, is the impact on the vast majority of recipients of the ‘offer’, who are not only not interested in it, but are offended by the irrelevant and time-wasting exchange.
A brand that asks you if you would like to buy something based upon an understanding of your previous purchasing behaviour is regarded favourably because it has made the effort to get to know about you. It could be your local butcher or the online brand that you regularly buy from. Many (many) years ago I was fascinated that in Toronto you could not only get a pizza brought to your apartment at 3am, when in the UK at the time pizza houses closed at 11pm and would not deliver at any time of day, still less the middle of the night. More impressively still though, the pizza parlour would request your phone number and then ask if you wanted the extra anchovies (like last time). This is customer-focused brand-building, which creates goodwill, loyalty and ultimately greater profits.
The impact of short-termism
The facile questions asked by the businesses cited earlier result in a growing feeling of resentment towards those brands, which lack respect for the customer. Equally short-sighted is the lack of respect for the brands’ own staff, who are trained to make these intrusive and unasked-for offers. Time and again poor customer service has been shown to be the single biggest reason for customers to leave brands: unhappy and demotivated staff, often only too aware of customer resentment, create poor customer service.
Too many businesses are now driven purely by a search for short-term revenue and cost-cutting, rather than an understanding that successful and profitable businesses take a long-term view that recognises the criticality of creating brands which customers trust and return to again and again. Supermarket chains are creating huge numbers of frustrated customers every week, forced to use self-service tills because of the shrinking number of manned tills and subsequent long queues: ‘unexpected item in the bagging area’ has become a short-hand for an indifferent cost-focused culture. Recessions provide no excuse or hiding place in the long-run for the myopic and incompetent, however.
Businesses losing their way
The financial sector, amongst all its other abuses, is of course notorious for its lack of customer focus and short-termism. For example, interest rate reductions are commonly not – or poorly – communicated, and customers are rarely informed that they would be better off switching to a more appropriate product or account from the one with the higher premium or atrophied interest rate. Most of the high street fashion outlets have never really understood the core marketing concept of responding to customer needs: “we’re due another delivery next week” (which is always next week) is the usual response to a request for an out-of-stock size or colour.
These executional issues reflect the more fundamental values and ethos of a business. Many major brands have gone backwards. Mark Ritson devastatingly describes the endless short-term focus of Barclays Bank over a long period of time and its seeming inability to return to the values and culture that drove its initial success.
Boots, too, has seemingly lost some of the ethical foundation it was once proud of and respected for. Not only do many of its stores now contain empty spaces and lack excitement, but its pharmacy counters have been pushed to the back. Why is this significant? Because in years gone by, whilst the potential incremental sales benefit of dragging customers through the store to get a prescription filled was recognised, its ethical stance dictated that the pharmacy should be sited at the front of the store to aid the elderly, pregnant, those with young children and disabled customers who make up a high proportion of pharmacy visitors. Similarly, as Boots retail buyers we were instructed that we should never use suppliers as a source of cheap credit and that the smaller the supplier the quicker they should be paid.
Why it’s important
What does this all have to do with sustainability? In the earlier – marketing and business-focused meaning of the term – it is about building brands, through creating a great customer experience, that will ensure their success and longevity. In the newer – but closely related – incarnation of the term, it is about behaving in an ethical way, which is also socially responsible. Focusing on the short-term does not fulfil the criteria for achieving either element of sustainability.
What are your experiences of short-termism?