Quote:
Originally posted by JR@Jan 27 2005, 10:28 AM
Quality always comes first. Even if the short term costs are greater, the long term benefits are exponentially greater.
in summary - i would say value first and quantity to the extent that you can grow without undermining value.
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The gym example is perfect - I think the business model of all gym's is to get as much quantity as possible and only worry about the quality for those few that show up.
Bally's just did a better job of it than their competition ...
Isn't our porn model the same? We try to get a huge volume of signups, give them practically nothing and hope like hell a large percentage forgets to cancel or is too embarrassed to chargeback?
Gym's are a classic example of the good old 'but it clearly states in the terms .....' - I'm sure we copied their model in some way!!
My last gym membership ended with me abusing a woman on the phone who insisted I come into the gym in person to cancel ... I only dragged my ass there a few times a month when I WANTED to work out, as if I was going to go there in person to admit my lack of commitment. (Funnily enough, I exercise more than ever now without ANY kind of memberships to anything!!)
JR, you talked about in your post what will happen when the business model bottoms out - when people get so used to how poor Bally's service is that they stop buying memberships. Do you think this means failure to the company though?
All Bally's has to do is create a new identity, pretend the new identity has 'bought out' Bally's, and use some of the money Bally's fucked out of their customers to launch a marketing campaign that appears to *fix* all the problems consumers have with the Bally's brand .... in fact, Bally's could be 1 big experiment in market research for the next big gym business.
Recently one of our major gym companies did the same - they got all new equipment, changed name to 'zest', did some funky branding about how cool the new look was and whammo, people fall for the same shit all over again with only a *slightly* higher quality but a big emphasis on perception of value.
The point I'm trying to make with the article is that providing quality is not necessarily a key to business success, its a personal choice for most of us to try to provide our customer with value for money. If we only cared about turning profits, we wouldn't still be in this business, because haven't we milked it for all the high volume/low quality profits that's available?