Breaking the Rules Can Be Very Profitable
Newsletters April 8, 2024 Chuck Wall Imagine a business in the where customers pay for the privilege of having someone purposely turn his or her back to you. That only begins to describe the problems that symphonies around the world have faced over the past thirty years. Classical music has been a victim of a generational split around the world. As other music genres from rock to rap have captivated younger fans, the allure of the symphony has faded. To put it bluntly: what do you do when your audience is gradually dying off? In Europe, where the symphony was born, it’s been a tough sell to entice younger people to purchase a ticket. Look at the obstacles. If you were to consider going, you must pick a performance from obscurely named symphonies from composers deceased for hundreds of years. Even if you know of a particular symphony you would like to attend, there’s little chance that your local symphony will be playing it when you would like to go, as they often develop their programs a year or more in advance. In the event you decide to attend a performance a series of obstacles face you. You’ll need to proper attire because that’s the tradition. That can mean renting a gown or a tuxedo. Since most European halls are in the center of the city, you will need to hire a car because parking is very difficult. Once there, you will have little familiarity with the music, the composer, the conductor, or any of the members of the symphony. This situation is in sharp contrast to attending a rock concert where you probably know intimate details about every member of the band. At intermission, you will often be surrounded by much older ‘symphony snobs’ who speak in hushed tones about various details of the performance. Worst of all, the overall performance is usually long and boring. This is not a winning formula; going to the symphony is expensive, unfamiliar, and boring. As the entire classical music industry saw despair, one man saw an opportunity. Dutch classical violinist Andre Rieu has built what he calls his Johann Strauss Orchestra into a multi-million-dollar global empire including sold out stadium performances, CD’s, videos, and television. Rieu is so popular that he is ranked as the number one male touring artist in the world of all music genres. The odds are that you have never heard of him. In fact, his own staff refers to him as “the most popular unknown artist in the world.” Instead of rock star, Rieu is a waltz star. With a warm smile, magnetic stage presence and flowing long hair he has disrupted an entire industry by letting people break all the rules of the symphony. He performs at outdoor stadiums to sellout crowds up to 40,000 per concert. That’s a long way from a typical symphony hall that might seat a maximum of 2,000. Instead of the boring symphony atmosphere, Rieu has created a spectacle full of thousands of falling balloons and beautiful flowers. His concerts often feature the unorthodox: a hundred bagpipers outfitted in kilts playing Amazing Grace, horse drawn Cinderella style coaches, skating rinks and sets that look like genuine castles. A typical Andre Rieu performance features over 250 total performers including a 50-member orchestra. The production requires 250 support staff, 80 truckloads of sets and 12 tons of sound equipment. This is not your grandfather’s symphony. Imagine taking a virtually dead genre and reinventing it into something entertaining and fun. That’s what people come for: to be part of an epic experience, where thousands of strangers can share a joy filled evening of music, color, humor, and entertainment. From a business point of view, Rieu carefully crafts his offering. He features much more familiar—and shorter—musical pieces, mixing well-known waltzes, pop, and movie themes or as he says, anything that touches the heart. His audiences are very casually dressed which removes the stuffy symphony environment. The large venues are an opportunity for audience participation with sing-alongs, swaying and dancing. Rieu said, “I want to give classical music back to the people, where it belongs. Mozart composed his music not for the elite, but for everybody. He was a fantastic, lively guy; he was drinking and having fun in life and being a genius at the same time. But now you see people playing Mozart with faces as if they are already dead. Why?” But why the waltz? Rieu said, “The waltz is a very important part of my life. It’s a very important way for me to express my positiveness, bringing humor to the world. The waltz can be sad and at the same time uplifting. You must see life from both sides, and the waltz encapsulates that. If you’re in my audience, you give yourself to me and the waltz will grab you.” Rieu is also the consummate showman who connects with his audience on a one-to-one basis. “That’s what I do every single night on stage: I communicate.” Many classical music purists and critics are not big fans of Rieu’s formula. I have used his story as a case study in workshops for several years showing how even obscure industries can be turned around by gaining fresh insight from potential customers. Numerous people have complained that he doesn’t understand the authentic classical music experience and that he is ruining the industry. Rieu’s response is to just smile and cry all the way to the bank. It is estimated that the Rieu enterprise sells over one million tickets a year, grossing over $100 million in the process. He sells hundreds of thousands of concert CD’s and DVDs on top of that, plus merchandise. It seems that giving people a way to break the rules can be extremely profitable. 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The Power of Me
Newsletters April 8, 2024 Chuck Wall Seinfeld was revolutionary in television entertainment because there were no happy endings each week. The producers held a fast rule of “no hugging, no learning”. From the beginning of the sitcom genre in the late 1940’s with shows like I Love Lucy, it was mandatory that there was always a happy ending. Every character conflict was neatly wrapped up in a bow by the end of the half hour episode. But Seinfeld and his co-creator Larry David decided to go a different way. They portrayed people much more like they really were. And the audience loved it because every week they got a small glimpse of themselves. Seinfeld brilliantly captured the essence of the Power of Me. It’s all about moi. What matters the most is what I think. My opinion matters more than yours. My self-interest is at the root of my daily decisions in virtually every area of life. I’m in charge. I worship myself and I expect you to do it, too. If you want my business, you will listen to me. The Power of Me is rooted in the simple fact that these customers have the need to exert control over some aspect of their lives. Who to better want to boss around than companies they choose to give their money to? This sense of control can quickly grow out of control and become dictatorial. No doubt, an entitlement mentality drives some of this phenomenon. But here’s the thing: these self-obsessed people also can broadcast their opinions about the companies with which they deal. The Customer CEO owns devices loaded with social media tools that give them the ability to amplify their individual voice into a movement overnight. They can and will do it when you least expect it. Social media uprisings are now common when organizations lose their way. Crazy Customers How should a company think about this Power of Me? Unfortunately, far too often, I see an attitude of “our customers are crazy”. Recently, a Chief Marketing Officer of a large insurance company told me that their “consumers” were “certifiably insane.” He based his conclusions upon a recent customer satisfaction survey in which his company had performed quite poorly. He meant it. “They don’t even understand how their policies work,” he sniffed. Since his company distributes their products through independent agents, he only sees the sales force as his real customers. Those pesky drivers, horrible homeowners and lousy life insurance policyholders just consume. They pay their little premiums and file their petty claims. Sadly, his attitude is not that unusual. It reflects the attitude often held in the c-suite of every size of enterprise. Rather than see it as an opportunity to teach their customers, it was just easier to dismiss them. Of course, they have no problem cashing their premium checks every month. I believe the word “consumer” demeans the people who choose to do business with your brand or anyone representing your brand like an agent. Consumer in its original meaning was someone who squandered or wasted, hardly a respectful way to describe a mutually beneficial relationship. Customer is the more honorable word, acknowledging that the person had a choice of which company to deal with. In today’s world, choice is an understatement. If you think of your customers like the insurance guy, you are making a big mistake. Simply put, a customer is the person who writes the check, debits an account, or barters a chicken. They are the me. Let’s return to George Costanza. In one memorable episode, he needed to read “Breakfast at Tiffany’s” for a book club he joined. But in typical George fashion, reading the book required too much effort. He decided to watch the movie version but learned the video store’s only copy had been checked out. He invited himself to the people’s home and convinced them to let him watch the movie with them. As an uninvited guest, George felt he was entitled to something to “nosh”, like popcorn. George Costanza was, no doubt, everyone’s customer from hell. He attempted to cheat at every opportunity. I lost count of the number of restaurants and stores George was thrown out of over the entirety of the series. Do customers like George deserve our respect or our wrath? Here’s the interactive part of the newsletter. Let’s do a quick exercise I call The George Quiz. Get two pieces of paper. I want you to write down on the first page what you really think of your customers. No, I mean really think of them. Picture George (or whomever comes to mind) and list everything you despise about him (or her). Feel free to take a few minutes to get this off your chest. Completely. Go ahead and vent. Write down every adjective and phrase that comes to mind. Feel better? Okay, now that you have done that, I want you to set that aside and write down what you think your customers really think of you on the other page. On your worst days. What poisonous things have they texted, tweeted, or reviewed? I bet that was a much shorter list. That’s because we are programmed to not hear genuinely negative feedback. I understand how easy it can be to fall into the trap of blaming the customer. The increased stress most executives feel is daunting. Between unrelenting technology, increased competition, and more pressure than ever for positive financial performance, someone is bound to get the blame. The easiest target is George Costanza, the demanding, unreasonable customer hardly worthy of our valuable time. Wisdom tells us that they are the customer, they have the money, and we probably need to look in the mirror about our own performance before we point fingers back at them. Subscribe × Submit your email to sign up for our newsletter: Business Wiser Close
Things either work or they don’t.
Newsletters April 8, 2024 Chuck Wall For customers there really is no middle ground. The question is why there are so many products that don’t. In theory, it seems simple enough. The Balridge Performance Excellence Program is dedicated to improving the competitiveness and performance of U.S. organizations. They define product performance as “performance relative to measures and indicators of product and service characteristics important to customers. Examples include product reliability, on-time delivery, customer-experienced defect levels, and service response time.” Yet, most experts agree that over 90% of most new products fail. Sometimes the product is poorly marketed. Other times, it is a brand extension that is so far afield of the root brand that potential buyers are confused. But usually, it is just because the product doesn’t do what the customer needed it to do in the first place. Fail There’s a place where products that just didn’t perform end up. It’s kind of the graveyard for product flops. Aptly called The Museum of Failed Products in Ann Arbor, Michigan, the museum houses thousands of losers, many from some of the biggest enterprises in the world. In his book, The Antidote: Happiness For People Who Can’t Stand Positive Thinking, Oliver Burkeman explains why he believes so many failed products line the shelves at the museum. “Each one must have made it through a series of meetings at which nobody realized that the product was doomed. Perhaps nobody wanted to contemplate the prospect of failure; perhaps someone did but didn’t want to bring it up for discussion. Even if they realize where things are headed, there’s a perverse incentive for marketers to plough more money into a lemon: that way, they can force some sales and preserve their dignity. By the time the truth becomes obvious, the original developers will have moved to other products, or other firms. Little energy will have been invested in discovering what went wrong; everyone involved will have conspired, perhaps without realizing what they’re doing, never to speak of it again.” It seems that many of these products made it through their company R&D pipeline with little thought, much less consultation with actual potential customers. Who could forget classic brand mash ups like Ben Gay Aspirin? Clairol’s Touch of Yogurt Shampoo? Coors Rocky Mountain Spring Water? Bic Underwear? In hindsight, these are colossally bad, even foolish ideas for products. Is the idea of shampooing with yogurt any better than if we had something called Shell Oil Cologne? (To my knowledge, no such product exists.) Thankfully, the marketplace put these pathetic products out of their misery without much fanfare. I’ve studied many of these dud’s overs the years. My favorite failure is still Colgate Kitchen Entrees. Yes, what a perfectly delightful combination; toothpaste and dinner! Some geniuses at Colgate Palmolive decided the world needed yet another line of frozen meals. Kitchen Entrees set a new low for brand extensions. The product was a complete disaster because customers could see no valid connection. How Does This Happen? What drove management forward on these incredibly bad product ideas? Were they dreamed up in some kind of stream of consciousness brainstorming session? Someone in authority had to approve the idea, fork out the money for testing, prototyping, production, and marketing. How does this happen? “Hardly a day goes by that we don’t see an announcement for some new product or technology that is going to make our lives easier, solve some or all of our problems, or simply make the world a better place,” designer Bill Buxton writes in his book, Sketching User Experience. “Few of these products survive, much less deliver on their typically over-hyped promise.” Buxton, and great designers like him, believe that there is no design context. “To design a tool, we must understand the larger physical, social, and psychological context in which it will be used. And that’s something designers are trained to do,” he says. This means simply that when companies ignore the human side of product performance, they are setting themselves up for failure. Customer focused design is the key to performance. What’s the point of creating bizarre new product combinations or adding meaningless bells and whistles if the ultimate buyer could care less? If they are happy with the products they are currently using, it’s doubtful they will suddenly be struck by lightning to switch to a new product. In fact, most companies, even conservative ones, wildly overestimate the success their new offering will have in the market. It’s clear that companies need to have a clearer path to understand what performance criteria their customers expect. Better design must be present in products, services, and experiences. Subscribe × Submit your email to sign up for our newsletter: Business Wiser Close
