Are You Willing To Pay For The Change You’re Demanding?

Change. We all want it. Even the things we love, we don’t love 100%. There’s an old phrase that I love to bring out every once again, that an old boss shared with me: that’s like pointing out the pimple on Miss America. The point being, we can find fault with anything, if we look hard enough.

Let me be the first person to say, I’m woefully guilty of this. I’m the guy who found problem after problem with the iPad. I pointed out all the things it wasn’t, instead of enjoying all the things it was. It’s easy to critique. It’s easy to demand that something be thinner, lighter, faster, longer lasting, come in more colors, etc. I say it’s easy, because asking for something requires no significant time, effort, R&D, dollars, or risk.

Over the past few years, with the rise of digital publishing and social media, we’ve all been given megaphones and platforms to amplify our voice. As a ritchesou web, we love to point to examples of how as a “community” we can create change. The number of times I’ve seen the Bank of America debit card fee situation referenced as an example of the power of the internet, is uncountable. There are other examples, no doubt. There’s a line though…a very fine line between “community” and “mob.” Michael Arrington, does a fantastic job of talking about the situation companies are in because the web is training is to “apologize because it’s pointless to have a conversation with a mob.” His post is worth your time and thought.

So let’s make this a bit more real for a second. Let’s say, the late Steve Jobs, had called me up after reading my post about the iPad.  This wouldn’t be that crazy, considering the number of people Jobs emailed directly based on emails sent to him. In our scenario, lets say Jobs said to me, Adam, we heard your feedback. We want to give you exactly what you want. In fact, we’re going to throw out all of the research we’ve done, we’re going to dismiss what our internal experts have advised, and we’re going to value YOUR opinion above all others. A new version of the iPad is coming out…the Kmiec Edition (aka iPad 3). It will have everything you wanted. But, here’s the catch, it’s going to cost $1,300.00. In other words, nearly double what I paid for an iPad 1.

Now, perhaps if I was in the upper echelon of the 1%, I’d say yes. Great! Of course in doing so, the majority of other customers would be priced out of owning an iPad 3. Let’s set that aside for a second. Not being in the upper echelon of the 1%, I’d of course say, sorry Steve, but I can’t afford that.

I realize the above situation is unlikely. But, that’s what it often looks like from the outside when I observe requests…no…the demand of the customers. But, it makes for an interesting concept.

Would you be willing to pay for the change you’re demanding?

It’s not like it’s easy to implement change. It’s hard. Take for example Joe Retailer. He has 10,000 store locations. Jill Customer demands he upgrade his point of sale system so that it accepts near field communication technology. Joe says, great, will do. He has 10 registers in each store, so he needs 100,000 new POS systems. For simplicity sake, let’s say the cost for the implementation of each POS system is $100 (it’s much higher). So he needs $10,000,000 in capital to do that. Well the $10M needs to come from somewhere. He can’t simply maintain the current pricing structure but invest $10M. And he can’t lower the prices. So what does he do? He raises prices by X% to cover the cost of the new infrastructure. But, what happens next? Yes, you guessed it. The “community” takes Joe Retailer to task for increasing his prices.

What we have is a no win situation. If you listen to Jill Customer, but don’t raise prices or cut costs/services elsewhere, Joe Retailer will be out of business in no time flat. But, if he raises the prices, he risks the backlash from customers.

Now, this paradox, is not universal. There’s a segment of customers who have no problem paying more for getting more. If you’ve shopped at Whole Foods you know exactly what I’m talking about. The price of groceries at Whole Foods relative to other typical grocery stores is astronomically higher. This has been proven time and time again. But, the Whole Foods shopper…the core Whole Foods shopper will keep shopping even as their prices raise. But, as prices increase, Whole Foods starts to price out more and more shoppers. This isn’t specific to Whole Foods. This is applicable to any business.

However, it doesn’t change the questions or the situation at hand: Would you be willing to pay for the change you’re demanding?