This could really have been a side note to a recent post where I related the story of a major department store that lost an easy gift certificate sale simply by making the buying process so difficult I didn’t stay around long enough to buy from them.
This is actually a good example of how the free market works, when it’s allowed to work. The owners of the establishment have a right to operate their business in any way they see fit. The consumer has a right to vote with their feet and wallet and “do or not do” (yes, Luke, there is still no “try”) 🙂 business with them as a result of the way they operate.
Should enough consumers voice their disapproval, or if the business loses enough money to begin to seek out the reasons why, store leadership will then decide if they want the business enough to adjust their operating procedures. That is their choice. As it should be in a free society.
This works. No government intervention needed (aside from protection against force or fraud, of course) and, so long as that store hasn’t bought special favors from congress in order to keep out competition (though not common knowledge, monopolies are only possible with the assistance of government force) or bought special favors from congress in order to provide a context where they can take horrible risks knowing that they will not be allowed to fail regardless of the results (Think: “banking fiasco” and understand that was not free-enterprise), the consumer will eventually and always have enough choices to make it worthwhile.
One reason this works and why government regulation (again, aside from protection from force or fraud) is typically not needed is because the market is truly the best regulator there is. After all, if the market is not forced to buy, then it behooves those who run the company to do whatever is possible to please the customer (the market).
While we’d like to think they would do that simply because it’s the right way to be…it isn’t necessary for that to be the case. And, hey; we cannot control other people’s motives. What we can control is where we buy. And that is enough to make even the most “hard-core, we-really-don’t-care-about-you-at-all” companies act in a manner that is pleasing to the customer.
Yes, Free Enterprise really does work; for the business owner, their employees and, most of all, the consumer. But it must be allowed to operate. And, over the past 80 or so years, this right has been gradually and continually usurped – elected politicians of both major parties being nearly equally guilty.
What are your thoughts? Do you have specific examples where the above rewarding of good/punishing of bad has played out either in your business or one you know of?
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Great post and great points Bob, “the market is truly the best regulator there is” and as one of my favorite people @Randy_Gage said “great that you are out in the space, keeping people in touch with reality” Grateful to both of you for doing that in different ways. Awareness would be one of the first steps to Success.
Preach it brother preach it! This message of letting the free market work is so important to keep getting out. There are so many misconceptions, myths and outright lies about the role of government in the economy. And as you point out, great lessons for savvy marketers. It’s great that you are out in the space, keeping people in touch with reality. Thanks, RG
A friend of mine was presenting at a business breakfast (BNI) that we attend – he’s the founder and President of a plumbing company with about 20 trucks and really is an innovator in the area of service. His company came up with the idea of having service workers wear cloth “booties” when they enter a home, but customers noted on surveys that this new habit wasn’t being followed. The workers earnestly disagreed – they said they had been wearing the booties, so my friend realized that the blue booties weren’t being noticed becuase they matched the blue uniforms. Now all the booties are bright red and yellow, and customers are delighted. This is one of the reasons he’s the number one company in the area and just secured a contract with Home Depot. Go Givers sometimes give transparently, but sometimes it’s good to allow your gifts to be seen! Thanks for bringing up this topic, Bob.
Absolutely Bob, right on the money! This is why our country is so great. The opportunity is out there and we the people as consumers, determine what stays and goes. With social media being so evident now than ever, its only gonna get a bigger voice. Reminded me of Apple’s ipod, which had some faulty batteries that only lasted a year I believe. And consumers were pissed that you couldn’t change it, but had to buy an entirely new one. The people retaliated and Apple had to bend and accommodate the outcry.
Flexibility is key to any great company. The ability to change according to the demands of the times.
Government unfortunately have been on the side of big corporate entities that have taken advantage of this thing we call Free Enterprise. This is evident in the whole real estate bust that we are experiencing.
We live with the good & bad, and its up to us, as consumers, as citizens to speak up and cry. So be aware of what you buy, who you support, who you vote for. Our decisions pave the future. “Do or do not, there is no try!” ~ Yoda Love that 🙂
Thank you all. I appreciate your kind feedback and support on this issue. I believe that those of us who understand the beauty of the (truly) free market need to keep educating people on this issue. As Randy said, it’s so misunderstood. Jonathan, regarding what you said about “sometimes it’s good to allow your gifts to be seen”, I’d say it’s *vital* that you allow your gifts to be seen. It’s called “communicating value” as opposed to *just* providing value. There is absolutely no conflict between that and being a Go-Giver. For example, in the case of your friend, the extra value he provided was not being properly and effectively communicated. That didn’t do his business or the customers any good. Only when he communicated what his team was doing did the customer place a value on that. Important to understand.
Thank you for this article Bob. Monopolies stifle creativity. I saw the rewarding of excellence working well in my field of new home design and building – when there was competition. Poor subcontractors didn’t get another turn. It’s when there is too much demand, and supply hasn’t caught up, that uncaring practice persists – the companies without a Go Giving philosophy don’t have a reason to perform. And they are still employed. Fortunately, in these cases, recession cometh…
And you make an interesting point about value, that being largely subjective, it isn’t created until it’s understood to be value by its audience. It makes a good argument for asking more questions. Only by really understanding what our clients want, can we target our value to meet those needs and explain or demonstrate how it helps them.