Every Guru has his prophecy (some have more than one). The one cure all we must adopt because it and it alone can help our sorry state of affairs. We are told to focus on
- remarkable products
- astonishing stories
- impeccable service
- 0 defections,
- customer engagement
It is hard not to fall in love with these claims because they sound so acceptable and plausible. Even if there are no benefits in the short run we are told that these have long term effect on stocks.
There are at least three major fallacies in all such broad recommendations (these are my nomenclatures)
Infinite Resources or Zero Opportunity Cost Fallacy: We only have limited resources but have many demands on these. If not, we do not need to make any choices. Any benefit from a method ignores that the resources invested on this method have alternative uses. For instance, what is the cost of striving for 0% customer defection? Could you be investing it in new product or new market development?
Infinite Marginal Benefit Fallacy: Any action you take can only deliver limited marginal benefit. Depending on where your business is and the market you play in you may see no benefit at all. Proponents of popular recommendations overestimate the benefits from their methods. They predict infinite benefit from doing just more of this one action regardless of where your business is.
Isolation Fallacy: You are not the only player, there are many other players in the game and their moves are not taken into consideration. The claims ignore that the same methods are available to all the players and even so they need not play by any of your assumptions or model of the world.
For instance, BestBuy has been the darling of customer service and social media Gurus. It had twelpforce, engaged its customers with online reviews, provides truly great service. All those methods came to naught when it guessed wrong about the product mix, pricing and consumer behavior. Their customers, quite rationally, went to the store to learn about the products and ordered online, right from the store.
This is not to say there is no marginal benefit to adopting any such recommended practices but you need to be aware of these fallacies before investing your product and marketing dollars.
Verifying the obvious may show it isn’t true.
Do you practice evidence based management?