It’s all over the news…
Toys’R’Us is dying, it’s closing it’s doors.
Warren Buffet sold his shares in Wal-Mart betting against the American retail supergiant.
Target failed in it’s Canadian invasion.
Sears is out of business.
Futureshop went out of business in Canada, so did MEXX. There is a retail apocalypse going on and things are changing fast.
In nature, the biggest of anything dies, it gets too big to support it’s own weight.
In nature, things get bigger and bigger until they collapse.
Think of the dinosaurs, they got bigger and bigger until the brontosaurus and then they died off.
Think of the Titanic, the biggest ship of its kind, it sunk.
Or the Hindenburg, the biggest blimp, it blew up.
Whenever something gets too big, it’s the end.
Retail got too big, especially in the United States where they have 3x the retail square footage per person of Canada so there will be a major culling in the USA and a repurposing of malls and strip malls.
But what does this mean for you?
Customer experience is everything.
Amazon, Jeff Bezos, arguably richest man in the world has been doubling down for 20 years on his pet project amazon. He has ruthlessly been destroying businesses and sectors in the name of “one button shopping”. The idea is genius, the customer pushes one button and the item shows up at your home within two days, free shipping or even the same day.
Jeff Bezos is a genius for making his e-commerce site all about customer experience.
We live in a world today where you can get your amazon items faster than going to the store. I remember visiting New York City a few years ago and I wanted to buy some brand new Bose headphones. My friend had amazon prime and the headphones were delivered to my hotel the same day, faster than we could walk to an electronics store – The future is here.
The customer is always right and the customer is king.
Years ago when blockbuster was still around, they surveyed their customers to find out what they really wanted. The customers on the survey said 1) We like coming to the store to bump into our neighbor 2) we like coming to the store to eat popcorn and buy snacks 3) we like reading the back of the DVD cases (remember DVD’s?).
Blockbuster didn’t see Netflix as a threat because it didn’t have the in-store customer experience.
Blockbuster was wrong.
The customer lied, he didn’t want to eat popcorn with his neighbor at the store – fuck that!
Instead what the customer really wanted was 1) a low monthly fee that is the same price as renting one movie 2) no late fees 3) no returning of videos 4) no driving 5) one button movie watching 6) the ability to lie in bed naked with his naked wife and be covered in pizza while watching a movie and never having to leave the warmth of his bedsheets.
No matter how hard Blockbuster tried, it can never deliver the naked-pizza-bed experience that Netflix brings. They can’t compete on pricing and can’t compete on one button delivery. Plus, Netflix made late fees impossible, something that everyone hated.
Netflix made their service all about the customer experience, and at $7.99 a month (or whatever I pay, I haven’t looked at my bill in years) it’s so cheap that I can’t even think of cancelling even if I don’t watch it.
The customer experience is king, Blockbuster is dead, it’s gone. They could have bought Netflix for a few million dollars, but they couldn’t see the future.
The same goes for big box stores, for retail. How is visiting a retail store contributing to the customer experience?
Recently I made a choice to eliminate seminars from my education company. I was thinking of customer experience again. How do people experience Stefan Aarnio?
Do they want to come to Marriott hotel basement, sit in a stinky room with a bunch of other stinky people and hear a seminar with a pitch at the end? Do they want to sit there for two days? Do they want to drive their car and leave their family while I educate and pitch them? Could seminars in a hotel basement be the old Blockbuster experience?
Blockbuster is gone.
In the seminar world there are a few giants, maybe too big to function – Rich dad, Fortune Builders, Zurixx, Keyspire, and others. These are big companies, some of them doing hundreds of millions of dollars of revenue each year. But strangely:
- Fortune Builders is not operating in Canada right now
- Rich dad closed it’s Canadian office
- Zurixx is scaling back in Canada
The trend is declining from the Blockbuster experience of seminars.
So where is the money going? People still buy things, they still want things, it’s true across the board. Toys r Us is closing, but people still buy toys, Futureshop closed, but people still buy electronics, people still buy, so how are their buying habits changing?
I went to 10x Growth Con by Grant Cardone in Las Vegas and they had 8000 people in an arena at the Mandalay Bay who paid $1000 to $15,000 USD to be there for the convention. Grant said on stage it cost him $6,000,000 to put the show on, but how did he fill the room? How did he sell the customer?
Grant Cardone did it with daily live streaming.
The new mega giants are:
- Gary Vee who is supposedly doing $200 M of sales right now
- Grant Cardone who is doing $100 M of sales
- Tai Lopez who is doing ?? M of sales, but I would estimate at least $30M a year of information sales, he has spent over $600M on ads between himself and his business partner.
What do those men have in common? They are all doing daily live stream and bringing the Netflix experience to the customer and have moved away from the blockbuster experience.
It’s fast, it’s easy to see them on YouTube, Instagram, Facebook, livestreaming, podcast, etc. and you see them every day multiple times a day.
Where the big brands are now, is also about where they are not. Gary Vee, Grant Cardone and Tai Lopez are not pandering to you in the basement of the local Marriott, giving you the blockbuster experience where you have to get dressed and drive over to see them.
They are not flying commercial air lines from city to city to win your business.
Instead, they are in the infinitely scalable model of media. Seminars have evolved into media, social media and they run more like media companies than seminar companies.
Blockbuster needed to move from retail into media like Netflix. Infinitely scalable and easier to deliver to the customer for cheaper.
When the dinosaurs get too big, they die out.
When blockbuster got too big, it died out, it couldn’t change fast enough or be nimble enough to see the trend and see the change.
The seminar companies like Rich Dad, and Fortune Builders are in a dying sector. They are offering a customer experience that is becoming less relevant. Will it always be around? Sure, just like the horse and buggy is still around today, same with newspapers still being around, but media is the key to the future.
Your buyer wants to be able to lie in bed naked, with his wife naked, covered in pizza and do one click shopping.
The easier it is for him to buy, the more money you will make.
Deliver the naked-pizza experience to him and you will have entered the new world of Netflix and left the Blockbuster world behind.
The other dimension of the blockbuster vs. Netflix dynamic is that when your customer sees you everyday on media and sees you frequently, the trust level is much higher, people buy easier.
When you have the Blockbuster experience, or the buy-or-die seminar, the customer doesn’t trust the seminar world because of past bad experiences. Think of the late fees that Blockbuster used to charge – these were negative customer experiences but they happened anyways. Blockbuster kept charging late fees even though the customer hated it. They could have moved to a subscription model and let you keep the video at home, but they kept doing what the customer hated.
Seminars are the same, the customer hates to be sold, but he still wants to buy. Why cram a bunch of people you barely know into a room and ask them to buy?
When you look at the seminar model or Blockbuster model in dating terms it makes no sense.
Imagine you asked out a beautiful woman on a date and said “meet me in the basement of the Marriott hotel” and after 2 hours you sexually expose yourself to her hoping for a transaction aka a sale. That is called sexual assault and you will maybe be accused of rape.
Imagine the second date is “Meet me at the same Marriott hotel basement for three days this time” and at the end of the date you try to go “all-the-way” with her. Again, you will be called a rapist. Hedley a Canadian pop singer just got accused of rape for just that, he invited a 26 year old girl to his hotel room (who he met on tinder – a hookup app) and bought her a plane ticket to fly her from Ottawa to Toronto (she states she knew she was going to have sex with him) and at the end he was accused of rape and now his career is over. She wanted to buy, Hedley wanted to sell, but she didn’t want to buy in the way he was selling. The girl and Hedley both met up to have sex, they both knew it was happening, but the way the sex was sold made her feel bad and now Hedley’s career is over, his life is ruined, his brand is wrecked.
The customer experience is everything, the customer not only wants to buy, but they want to buy in the way they want – not the way you want. The same goes for the seminar customer, he wants to buy, but not in the Marriott basement.
A much better way to court the customer would be “hey, can I buy you a book?”
Then we talk on the phone a few times, you see some of my videos, my social media, my YouTube, maybe we meet up at some point, maybe a relationship happens, but it happens more naturally rather than a Marriott basement experience.
The challenge with being human is that everyone wants to buy but no one wants to be sold. People are still buying all the same things they used to, they just buy them in different ways.
The “why people buy” stayed the same, the “what people buy” stayed the same, the “how” people purchase has changed. Everything else is the same.
In your business, focus on the customer experience, think about the customer. How can you deliver him a naked-pizza experience?
How can you be the Netflix and not the blockbuster?
How can you court the customer in a way that she wants to be courted?
How can you make this a real relationship?
Answer those questions and the fortune of the future is yours.
Respect The Grind,