As it turns out, “the customer rarely buys what the Company thinks it is selling”, says Management Expert Peter Drucker.
Nearing Christmas, many seasonal opportunities spring up. In 2013, twenty-five thousand people would go to watch the Cantata over five days at Watoto Church in Kampala. My friend John Mwesigwa and I rented a stall to sell popcorn and juices. On day one, we realized that other sellers had the same products at a much lower prices, they were near the entrance so they beat us hands down.
The flipside to that loss was that we learnt our lessons quickly and pivoted. As we debriefed that evening, we realized that we had a weak Customer Value proposition (how a Company creates Value for a given set of Customers at a given Price);
- We hadn’t decided on what type of customer we were going for.
- The emotional, functional social benefits were not clear to the selling team.
- We had poorly communicated the Customer value proposition.
- We had not thought through our offer to establish the profit formula.
At around 11:00pm on a cold night we decided to a change approach by doing the following;
- Choose a set of customers: You can’t be all things to all people. Lawrence who was heading our sales mentioned his observation of many mothers walk in with children and they were given first priority to pass through the security checks. From day two onwards we were to majorly focus on the young mother with her kid(s) coming to watch Cantanta.
- Define what jobs the mother was trying to accomplish: Customers are poor at articulating what they need. Henry Ford who made the automobile a mass product once said, “if we had asked people what they wanted, they would have said a faster horse” From our observations on day one, we narrowed down all the jobs the mothers were trying to get done and grouped them as follows;
| “I want |
have a park like experience”
| “I want |
my kids and I to be refreshed”
|Next time I come back to church I want my kids to talk about this show with their friends. I want to talk about the show with my friends.|
When crafting our offer, we had to ask ourselves, How can we create a park-like experience for mothers coming to watch Cantanta with the kids, keep both sets refreshed and get them excited about the show?
Our solution was: Hire a face painter who would paint all our faces, we put balloons around our stall and were playful although our selling. Our sales people were stationed at the entrance to welcome mothers and kids strictly and lead them to our stall. We offered popcorn, juice for kids and healthy option juice for the mother. We also took turns to watch the show to let them know what they would look out for during the show.
A typical conversation would sound like this “Welcome! I am excited you made it, the kids are going to love this. This year’s show is……… (we picked one point that would excite them) The waiting area is over there but as you wait I can take……(mention) the child’s name to get his or her face painted, he/she will get some popcorn and we have………………(mention the health option juice to them). We got faces painted, sold popcorns, juices and ultimately, we centered around creating a park like -experience to the best we knew how.
Define the profit formula to match our CVP: We kept our prices high hence going for a High-margins on popcorn and juices and low margins on face painting. We also targeted high turnover our stock (i.e. there were three shows per day but we aimed at selling 90% of our stock before the second show ended) With this profit formula we made achieved our set targets, made record sales and of course profits.
Articulating your CVP will you be chosen over other providers. Go through the process and see the difference clarity makes.