The Value Equation

Costco succeeds because it has chosen to provide a lousy shopping experience.

The store has zero ambiance- it’s a warehouse.
The selection is horrid, often limited to one brand of a product, usually in one size.
You can only buy products in gigantic portions. A gallon of ketchup, anyone?
The checkout takes forever because they is only a skeleton crew.

But the prices are so cheap that you accept all of the limitations. Happily.

Businesses that succeed make a similar calculation of what their customer’s priorities are. Costco shoppers will endure all of the downsides to save money. Neiman Marcus shoppers value quality goods and insane service over price.

What part of business is your company choosing to do badly in order to deliver great value in another?


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