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How solving one customer problem can blind you to a bigger problem

Stashed in: Product Inspiration, 106 Miles, Business Advice, Alcohol!, Awesome, Customers!

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Makers Mark recently announced and then quickly retracted a strategic decision to water down their bourbon from 90 to 84 proof. Their CEO's statement is interesting because it's clear that he genuinely wanted to solve a problem for his customer -- low supply and high demand, leading to inability to make shipments and presumably higher prices at retail. In addition, it was obviously very important for the brand that the taste of the product did not change.

But in doing do, he totally ignored the fact that his customers were attached to the HISTORY of the bourbon... which had always been sold in the US at 90 proof. Also, although the taste change was imperceptible even to experts, the strength of the concoction was reduced perceptibly. Especially for a luxury item like bourbon, which is invariably described as "old", the history and "bang for the buck" are probably very important to consumers.

Net-net, I think the CEO (who only ascended to his office in 2011) pitted the interests of new or future customers -- presumably mostly in overseas markets, given that bourbon is still more popular in the US than any other country -- with those of existing or old customers, presumably mostly in the US.

It's a good lesson for every product person: that you can easily get tunnel-vision about solving a problem for customer A without realizing you are creating a bigger problem for customer B.

Business Advice: Every product design decision will have trade offs.

You can't please all of the people all of the time.  

By the way, Makers Mark is now claiming their use of social media has made this a win:

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