business news in context, analysis with attitude

by Kevin Coupe

An MNB user passed along an Eye-Opener from the MIT Sloan Management Review, in which management consultant Don Peppers, who suggests that there is one possible way for retailers to ”make a profit when your customers know everything about your costs and pricing and have more or less instant access to your strongest competitors, anywhere in the physical world.”

Charge admission.

There is some evidence that this can work, he says. Costco does it. Sam’s Club does it. Some bookstores, Peppers suggests, charge admission for readings and book signings by big-name authors.

“It isn’t hard to imagine a retailer charging customers a one-time fee for entry, and refunding that fee against any product bought within, say, 48 hours,” Peppers says.

Maybe it is because I’m not as smart as Don Peppers, or because I don’t have as vivid an imagination. But I’m not sure that in today’s competitive environment this really makes a lot of sense, except as consultant-speak.

But it strikes me that Peppers really is using hyperbole to make a bigger point - that price and accessibility simply are not differentiators anymore, because anybody can underprice you, and anybody can be more accessible. Enlightened marketers instead have to focus on the value of the product, the values behind the product, and the ultimate utility of the product in a person’s life.

That, to me, makes sense. And is the real Eye-Opener.
KC's View: