Ryan Mathews, best selling author
of The Myth of Excellence gives
members of the Retail Consortium
for Management Education
a reality check.
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Futurist Ryan Mathews gave members of the Retail Consortium for Management Education a reality check.
“You simply can’t be the best at everything,” he says. “In America, children are taught to be good at everything. How many of you got basically good grades but maybe one low grade in one subject? And what did mom say? ‘Bring up that F’ or ‘bring up that C!’
“In the business world, what are we told? ‘Offer the best product at the lowest price at the friendliest place.’ And guess what? You can’t do it,” says the founder and CEO of Black Monk Consulting.
Mathews is widely regarded as an expert on consumers and their relationship to brands, products, and services. He says that the notion of being all things to all people is wrong on two counts - “you can’t be all things, and you don’t want all people.”
With co-author Fred Crawford, Mathews surveyed 40,000 consumers in the U.S. and nine European countries and published the findings in The Myth of Excellence: Why Great Companies Never Try to be the Best at Everything.
“What we really have here is a model of how people in advanced industrial economies think about retailing. The interesting thing is that whether it’s Paris, Texas or Paris, France—the response is the same.”
Mathews discussed the five attributes of commercial transactions and what consumers want:
Access. Consumers say ‘Our problems start when we get into the store. We can’t find anything.’ It has to do with psychological navigation.
RCME attendees review points
by Ryan Mathews
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Experience. Like the Boy Scout oath, what consumers want is courtesy and respect. They want retailers to be fair, honest, and trustworthy.
Price. Consumers want fair and honest prices, real savings, lower prices. They don’t believe the pricing model, because they know better. (“We have trained an entire country to shop after a holiday. We have trained consumers to beat the system,” says Mathews.)
Product. Consumers want a range of consistently good products. They say, ‘Stores are consistently out of stock. I need a good second choice.’ What they want is not to have to go someplace else, which might also be out of stock. This is a consumer trained to believe in the inherent inefficiency of the system.
Service. The key to service is not just the policy, but the execution of the policy. Consumers say, ‘Can you customize something for me?’
Mathews also offered participants a stern challenge: “You should be really great at one thing. Dominate on one of these attributes. Differentiate on a second attribute. And meet the competition on the other three.”
He advises retailers to solve the customer’s problem, not their own. “Get out of the office. Shop the stores. Walk around and talk to folks. Watch how they buy. Know your customers, and focus on a highly targeted customer: one who is loyal, profitable over time and buys a lot of volume.”
He described a strategy that reflects no real knowledge of the consumer: discounting the new Harry Potter book.
“(It) should never need to be discounted one nickel because every kid will make their parents buy this book. They could charge 50 bucks for that book and it would sell. And already they’re offering it for 40 percent off—a completely ridiculous move. My daughter would literally have me pay $4,000 for this book.”
People are value starved, he says. The solution is redefining your understanding of how value is created.
“Recognize where their critical sweet spots are and hit those spots time and time and time again. You don’t get to those value spots by measuring transactions per hour. The measurements and methods we use are industrial methods. These are great methods if you’re building automobiles.
“We’re in trouble today because people are different, and our methods are the same. We need a fluid model,” he says. “You need
a new way of thinking about the relationship with the consumer.”
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