Before Changing Your Business Model, Consult a Direct Marketer
Who Is—And Is Not—Testing
* Digital Photography. Nikon, Kodak and Minolta have all announced that they will cease selling traditional film cameras. No tests needed here. Digital cameras had been tested successfully, rolled out and became the core business. Film was vestigial. Kodak caught heat from diehards when it went out of the Super 8mm film business. But in the wake of three quarterly losses in a row and the elimination of 11,000 jobs, hard choices had to be made.
* Dunkin’ Donuts. From Janet Adamy’s April 8, 2006 story in The Wall Street Journal:
Dunkin’ Donuts last year paid dozens of faithful customers in Phoenix, Chicago and Charlotte, N.C., $100 a week to buy coffee at Starbucks instead. At the same time, the no-frills coffee chain paid Starbucks customers to make the opposite switch. When it later debriefed the two groups, Dunkin’ says it found them so polarized that company researchers dubbed them “tribes”—each of whom loathed the very things that made the other tribe loyal to their coffee shop. Dunkin’ fans viewed Starbucks as pretentious and trendy, while Starbucks loyalists saw Dunkin’ as austere and unoriginal.
Having gotten inside the customers’ heads to see how they think and what they feel, Dunkin’ Donuts—with an infusion of new capital—is going to take on Starbucks by upgrading its current 5,000 stores during the coming three years and opening 15,000 more. The chain knows what it is doing.
* Escolania of Montserrat, the oldest boy’s choir in Europe, was founded in the thirteenth century. The musical education—voice plus two instruments as well regular academic subjects—is superb. As well as performing daily, in 2005, the choir also performed 15 full-blown concerts in Montserrat, Barcelona and Bilbao, and has an impressive discography. However, since the death of Franco, the inclusion of Spain in the EU, Spain’s booming economy and with a more secular Europe, parents and children have become loath to commit to a medieval regimen. As a result, applications have tanked. The business model is being changed to include a more modern repertoire, weekend visits home and, in the near future, (Gasp!) girls! No testing possible here. It was either change or go out of business.