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Tim Peter

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February 3, 2010

Does your business depend on your customers' stupidity?

February 3, 2010 | By | No Comments

Are you treating your customers like they're stupid image from cogdogblog on FlickrI’m in the middle of reading Ken Auletta’s fascinating book Googled: The End of the World As We Know It. And one of the more eye-opening stories is one in which then-CBS CEO Mel Karmazin is quoted as telling Sergey Brin and Larry Page, “You’re [screwing] with the magic.” Except, y’know, he didn’t say “screwing.”

“The magic,” in this case, was the ability of companies like CBS to get advertisers to throw away their money. Karmazin says,

“…you [the customer] buy a commercial in the Super Bowl and, at that time, you paid two-and-a-half million dollars for a spot and had no idea if it worked. I mean, you had no idea if it sold product… did any good… I loved that model! That was a great model! And why …if I can get away with that model… if I’m in the business where I can sell advertising that way, why wouldn’t I want to do it?

No return on investment. And you know how everybody looks for return on investment? We had a a business model that didn’t worry about return on investment and then here comes Google. They screwed it up. They went to all these advertisers and said, we’ll let you know exactly what it is.”

Amazingly, years later, he stands by the sentiment.

He’s not alone, of course. Companies of all sorts have been doing this for years, loving the model that depended on your customer having “…no idea if [what you did] worked.”

Now, don’t get me wrong. Most customers hire most companies for the expertise those companies bring. No matter how much my dad tried to teach me about cars, I’m not about to go climbing under the hood of my Honda every time I need to change my oil or fix my flux capacitor. I bet the same is true for many of your customers and the products and services you offer.

But, don’t confuse ignorance (a lack of knowledge), or convenience (a lack of time), or some other factor your customer lacks, with stupidity. If the Internet can expose something customers can – and would be willing to – do without you, don’t be surprised when they choose to do just that.

Google created a market that exposed ad performance, hurting traditional advertising sales – and screwing with Mr. Karmazin’s magic. Amazon got cute with price discrimination and got busted for it. VC’s are looking to disintermediate advertising agencies. The Internet is always going to expose the snake oil salesmen eventually, the ones who depend on keeping their customers in the dark.

Treat your customers like they’re intelligent and they’ll keep treating you with their business. Offer them convenience. Or education. Or differentiated knowledge. Or price. Or something.

Of course, if you’re still convinced banking your business on your customers’ “stupidity,” the best evidence that you’re right might be that they hired you. But, don’t worry. They’ll figure it out soon enough.



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Image credit: cogdogblog via Flickr using Attribution 2.0 Generic.

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