“All businesses need to be young forever. If your customer base ages with you, you’re Woolworth’s,” added Bezos, who created the world’s leading online retailer. “The number one rule has to be: Don’t be boring.”
—
Jeff Bezos while speaking about the Washington Post.
Jeff Bezos while speaking about the Washington Post.
Ahmad Masrahi
on 05 Sep 13“In the 1970s and 1980s, Cadillac had some of the most loyal customers in the industry. To an entire generation of car buyers, the name “Cadillac” defined American luxury. Cadillac’s share of the luxury car market reached a whopping 51 percent in 1976. Based on market share and sales, the brand’s future looked rosy. However, measures of customer equity would have painted a bleaker picture. Cadillac customers were getting older (average age 60) and average customer lifetime value was falling. Many Cadillac buyers were on their last car. Thus, although Cadillac’s market share was good, its customer equity was not. Compare this with BMW. Its more youthful and vigorous image didn’t win BMW the early market share war. However, it did win BMW younger customers with higher customer lifetime values. The result: In the years that followed, BMW’s market share and profits soared while Cadillac’s fortunes eroded badly. Thus, market share is not the answer. We should care not just about current sales but also about future sales. Customer lifetime value and customer equity are the name of the game. Recognizing this, in recent years, Cadillac has attempted to make the Caddy cool again by targeting a younger generation of consumers with new high-performance models and more vibrant advertising. The average consumer aspiring to own a Cadillac is now about 36 years old.” - Marketing, An Introduction. Global Edition, Tenth Edition. By Gary Armstrong & Philip Kotler (Page 50).
Customer lifetime value: The value of the entire stream of purchases that the customer would make over a lifetime of patronage. Customer equity: The total combined customer lifetime values of all of the company’s current and potential customers.
I guess school is good for me after all. Though I would say the number one rule shouldn’t be: Don’t be boring, rather: Be cool. O yeah and you all just got schooled. Class dismissed.
P.S. Jason, thank you for the recommendation for the 11-inch MacBook Air. “I’m loving it”. P.P.S. I think 37signals is the coolest thing ever to happen to business. So, you’re fine; At least from my end.
jmetcher
on 05 Sep 13“Don’t be boring” comes ahead of “provide value”? This is one of those moments when the mask slips and customer service is exposed for the empty rhetoric it so often is. Consumer-facing business becomes a matter of flogging novelty to the easily bored, while those of us with longer attention spans find it nigh impossible to build a personal ecosystem that fits and works for any length of time.
But innovation is easier to hype than stability, and hype, bizarrely, remains easy to monetize.
GregT
on 06 Sep 13Maybe he meant it specifically in the context of a newspaper for whom it must be hard to provide value if you’re boring. If you’re an electric utility, it’s hard not to be boring ;)
@GregT
on 07 Sep 13If your an electric utility, its also hard to not have customers.
Alex
on 09 Sep 13Thanks for sharing this, Jason. It’s a great reminder for all of us.
This discussion is closed.