Why You Shouldn't Cut Corners to Raise Profits It's important to think about what customers want, how you can empower them, and ensure future success
By Kylee Collings •
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When launching a new business, some entrepreneurs look at what other brands are doing and decide to replicate their offering - but do it cheaper, by cutting corners and sourcing poorer quality ingredients, appointing less scrupulous suppliers, or going with a delivery partner which costs less, but is unreliable. This method is always doomed to fail. Eventually, customers realize they're being short-changed and that the only one winning is the entrepreneur. And they'll look elsewhere.
Brand loyalty is not something that can be relied on - if a customer has one bad experience, they'll move on. In fact, a recent survey found that 63% of consumers said "it only takes one unsatisfactory shopping experience" to make them stop shopping your brand*.
It sounds simple, but giving customers what they want will keep them coming back. Yet many brands confuse what they want with what their target market wants. Researching your key target market and identifying what drives their purchasing decisions is essential for your success, even if it seems on the face of it that you're giving the customer too much control. Sometimes we can be so personally invested in our service or product, we become clouded and forget what the market wants.
Look at the founder of SWEAT, Kayla Itsines. Her value proposition works on volume, keeping her subscription cost low, she makes her service so compelling that people don't go elsewhere. Her "fitness community' is in essence driven by an app that provides workouts and meal plans on people's phones. She's essentially empowering her audience to use her expertise, but apply it to their own lives, in a time that suits them, rather than being locked into a gym class with its strict timetable and inflexible hours.
One could argue that once people have tried out her workouts, they'll unsubscribe and do it themselves. But by creating a service that really connects with her global target audience, they don't want to do it themselves, they want to be part of the community, she's become an international star, reportedly worth $46 million.
Another Australian business that is thriving is Canva, the online graphic design tool that allows non-professionals to create high quality looking assets for print and online. At the entry point, it is free of charge, meaning you can access the basic resources and tools without giving the business a cent. Whilst there are no doubt millions of users who will never contribute to founder Melanie Perkins' bottom line, there are thousands who pay the very affordable monthly subscription of $10 per month for the "Pro' version. This volume has built the company to be valued at over $4 billion.
As many retailers in Australia struggle to compete, with recent high street names such as Jeanswest, Bardot and Roger David going into administration, it's important to understand what it is that consumers want and how to package it for them. Sometimes what doesn't make sense from an immediate profit perspective can, in fact, be a real earner. Empowering customers and giving them control will help them to feel that they are getting a good deal and keep them coming back for more.
