Magician or Charlatan

Guard your reputation. Never give customers reason to question your integrity. It’s too easy to make simple errors. Poor communications, veiled decisions, failure to accept responsibility, hidden risks? Any action you take – or fail to take – that even hints at exploiting your customer can crash your reputation.

Don’t accidentally join the other oldest profession

&snake oil salesman bw

Does your product or service raise red flags?

Misrepresenting wares is an ancient game. Hucksters and charlatans have taken advantage of naifs in every era. By the early 1500s a neo-Latin term was coined to caution buyers against cheats.  “Caveat emptor” – “let the buyer beware”.

Today wary buyers tussle with every kind of dubious seller – from used car dealers to Ponzi schemers, Nigerian princes and failed banks deemed too big to fail.

Simple indicators mean a lot. Product labeling has become a bogie man, for example. Consumers have grown wise to hidden transfats, sugars and sodium in processed foods – and antibiotics and GMOs in meats. Pharmaceuticals exploit small print and fast-talking ads to veil side effects. And we all remember how those collatoralized debt (read junk mortgage) instruments tragically torched home owners’ most sacred investment.

In most of the world’s jurisdictions, the burden is placed on the buyer to verify the truth of product claims. Sure China might execute some flagrant executives after their buildings have collapsed. But buyers across every category have learned to guard themselves against misrepresented offerings.

Serve customers first

Great companies serve their customers’ interests as a first principle. This applies to every one of the nine types of strategy. However most of these issues arise at the Offering level – the bottom row of this matrix.

&9 Strategy Matrix

Too many executives mistakenly view their primary responsibility to owners. Public company practices and disclosures reinforce this problem. Well-meaning HR functions and labor unions argue to put employees first. Community activists defend the public interest.

&constituent equation

How do you balance these constituencies? Who looks after each one, starting with the customer? Who looks after your customer?

Serve owners best by serving them last

With great leadership – or lucky circumstances – companies balance all four constituencies. Serve the customer well. Invest in your employees. Respect your communities. Reward investors. Do the first three and the last shows up all by itself.

Consider how you should serve customers as your first priority in each of the three Offering strategies.

offering strategies

Position your product relative to alternatives

Consider the market space of your competitors, as we saw in the “strategy canvas” from Renée Mauborgne and W. Chan Kim in an earlier post. In that case, Cirque du Soleil positioned a new circus offering to differentiate from the legacy model by acting on different key features that consumers care about.

&circus chart

&7 positionWhat does your market position look like if you map it to consumer desires as shown here? How have you positioned your offering relative to the competition. Can consumers differentiate you from the crowd?

Emphasize your unique attributes. Set yourself apart in the sales channel. When you look at the relative value of your offering vs the competition, consider what you might include or exclude to set your offering apart.

Communicate the right message to the right audience

Amazingly, even terrible products win devoted followings when effectively positioned and promoted to the right target audience. Consider these direct-to-consumer television products – innovations that were positioned to solve problems you barely knew you had – like sofa surfing under a flammable blanket, or cutting your hair with a vacuum cleaner.


&8 communicationYet sure enough, both the Snuggie and the Flowbee and countless other wacky offerings became cultural icons, even if ironically for their questionable taste. Their makers laugh all the way to the bank.

They worked because they were able to reach their target customers with a clear message. The product did a single, simple job as advertised. It wasn’t great, but it stood alone in the market and produced an experience that matched the pitch. In other words, the Snuggie doesn’t promise much. But it doesn’t make promises it can’t keep.

Distill your value proposition into a memorable brand

Odine Bonthrone, the founder of Velo, challenges her clients to pinpoint the singular phrase that captures the essence of the brand. She often starts by asking executives to see if they can identify the one word representing familiar brands.

Amazon’s endless catalog and growing set of services literally offers everything from A to Z. Virgin thumbs its nose at every industry category it enters, upending conventions with playful irreverence. And Disney, whether appealing to you or your toddler, reminds us that no matter how jaded we may become, life always allows for a little bit of magic.

&9 brandGreat brands appeal to our senses with an authentic representation that never wavers. It should make a distinct impression on the mind of the observer. And it should leverage the underlying assets of the brand – meaning a Disney film or theme park is more valuable than competitors’ because we really believe we can expect that little bit of magic to come through.

Great brands command higher asset value if and only if they always live up to their promise.

When they don’t, great brands fall farther, faster.

Do the right thing

It seems some companies think the way to protect their brand is to “not get caught.” The better policy would be to avoid doing things that suggest the risk of getting caught.

Volkswagen shareholders and workers learned the cost of market deceptions when years of falsified diesel emissions data were revealed. You can lose your good name overnight.

&VW emissions poster

In September 2015 – Volkswagen’s executives confessed to their “Diesel Dupe”. The US EPA discovered hidden code in engine software rigged to enhance exhaust performance only during emissions testing.

There are few things worse than to find your company on the front page, recast in the role of snake oil salesman.

Confess your sins

It’s one thing to sell snake oil as a cure-all. You know you’re making claims you can’t defend. It’s another to unconsciously alienate your customers by inadvertently making claims that fail to deliver.

Toyota’s airbag recall serves as a contrast to the Volkswagen case. Discovering after the fact that your product fails differs from consciously concocting or hiding that failure. You remain liable for your product, but you can win back trust with quick action and complete transparency.


Protect your customers as you would your own family.

Free markets punish misplaced loyalties.

When customers abandon you, nothing can save jobs or share prices short of fraud. Pollute the commons and pay the price. Torture employees and live with picket lines. Short change investors and find a new job.

It’s a choice. Take the high road.

Make Better

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