The founder and CEO of a multimilliondollar company was looking out of the window of his cabin from the top floor of a multi-storeyed building. It was lunch time and the street below was active. A poor man crossed the street, came to a water dispensing machine, dranked water to his full and went away satisfied. It was a routine the CEO had watched almost every day. But that day it struck him something – why did the poor man always drank water from the same machine?He thought about it, and boiled down to three pts –

  • There was always water in the tap.
  • The water was of quality that he was satisfied with.
  • The water was available at a price that he was willing to pay (or at no price at all).

Ridiculously obvious points, yet overlooked by majority. The founder then formulated the strategy of his company on these lines – the product should always be available to the customer (should be within easy reach, never out of stock or booking-on-order), the product should satisfy the expectations of the customer with regard to quality and performance, and finally, it should be made available at a price that the customer is willing to pay easily. Executing on this strategy, his company shot into prominence, gained market share and became a household name for decades to come.

That was 1932, the founder and CEO was Konosuke Matsushita, and the company was Panasonic.

I am no Matsushita, and don’t see a poor guy drinking water, and we are not yet Panasonic – but I believe his mantra still holds true. Few months back, when we were groppling with our southwards sales, we applied his seemingly obvious conclusions to our retail business. And if results are anything to go by, it simply means that his findings as true today as they were seventy years earlier. We had two ingredients right – the quality of the product (or service in our case) and the price (we are the best discounters here). What was missing was the availablity. When customers walked into our stores, they were never sure whether what they want to buy will be on stock or out-of-inventory. That was a killer. Over the last two months that has changed dramatically.
Lesson for us?
Remember – There should always be water in the tap. It should be of good quality and affordable. Satiate your customers, hold them, bind them to yourself – don’t let them go.