When I go into any store, I like to know what things cost. That sounds common sense enough, right?
Well, it wasn’t to a national retail chain (not automotive). This certain retail chain had four — FOUR — prices on almost every product. There was a price for this membership level, a regular guy price, some other price and a fourth, yet-to-be-understood price. So you could imagine the confusion created when someone went into this store and actually tried to buy something.
To make matters worse, the checkout process was S-L-O-W. How slow? So slow that whenever I entered this retail store, I thought to myself:
Why am I doing this to myself?
How long will it take this time?
I’m never coming in here again.
I’m serious this time.
The chain has recently radically revamped its pricing structure to “fix the glitch.”
But as it turns out, they’re not the only ones making it difficult for people to buy from them.
A friend of mine recently told me about a discount brand name clothing store. You know the kind, where you have no idea what kind of clothing gold lies amongst its aisles and for ridiculously low prices?
I go in recently to gaze upon all the incredible price-to-amazement ratios. What did I find? Jackets, for example, that were — yes — 50 percent off the MSRP. But the MSRP was $500 to begin with. I peruse the aisles, look at all the relatively high prices and promptly walk out, thinking, “Hey, I gave it a shot.”
I text my buddy. “Hey, buddy. These clothes ain’t that cheap!”
His reply: “No, the price is 60 percent off that price. They don’t tell you that.”
What? They don’t tell you that? We go from four prices to one price that isn’t actually the price?
How on earth do these sorts of things happen? I’m glad you asked. Complication. The opposite of simplification. Complications are fantastic on timepieces, but they are business killers.
In their new book, Simplify: How the Best Businesses in the World Succeed, entrepreneur Richard Koch and venture capitalist Greg Lockwood reveal what makes the most successful businesses in the world successful: They simplify. They simplify on either price — a budget airline that strips away all the extras, or “proposition simplifiers,” whose products consumers are eager to pay a premium for because they’re so easy to use.
Consider it another way, could someone outside the automotive aftermarket understand your value proposition, pricing and offerings in 10 seconds or less?