business writers without a clue

19 July 2013

Overrated: Articles By Business Experts Who Have Never Run A Business

by Freddy Tran Nager, Founder of Atomic Tango + Guy Who Doesn’t Know Everything But At Least He’s Gotten His Hands Dirty; photo by Nathan Dumlao on Unsplash

Anyone who teaches or writes about business should have actually run a business, or at least worked in one. Makes sense, right? Would you study surgery with a professor who had never performed one? Or learn a language from a linguist who’s never spoken it? Or copy hamburger recipes from a lifelong vegetarian?

Yet in business schools — and on the Internet — lack of experience is the NORM.

I’ve ranted against inexperienced “experts” frequently, starting when I had to endure classes taught by wonks so out of touch with reality, they’d struggle to sell fudge brownies to potheads. My MBA “Marketing Strategy” class was a running gag of ill-thought formulas that never added up.

These days, whenever I miss business school (which is about as often as I miss the last Bush presidency), I gravitate to the Harvard Business Review blog, where you’ll find more posers than in the fashion spreads of Vogue magazine. I’ve mocked HBR on a few occasions:

And sorry, I can’t help it, I have to comment on another.

This article, “How Pinterest Puts People In Stores,” isn’t the worst HBR article ever — it actually does contain some interesting insights on Pinterest. But at the beginning of this article, one statement threw me so far off, it took me an hour just to get back to my computer. Here it is — can you see what’s so annoying about it?

“‘Showrooming’ — a phenomenon whereby shoppers visit stores to examine merchandise in person before buying the items online — is viewed as a huge threat to brick-and-mortar retailing. The problem is thought to be so bad that at least one merchant has started charging people to browse in its stores. Our research suggests that the threat is overrated. We asked nearly 3,000 social media users in North America and the UK about their shopping habits, and only 26% reported regularly engaging in showrooming.”

OK, STOP. If you run a business, how big a number is 26%? It might sound small to some Harvard Business Review bloggers, but let’s imagine that you actually run a store, and out of every 4 people who walk in, at least 1 checks their phone for the price elsewhere. If you’re a teacher, imagine that 1 out of 4 students checks their phone for what’s happening at rival schools while you’re lecturing. Imagine that you’re dating, and 1 out of 4 of your dates checks their phone mid-date for other options. How does that make you feel? Pretty damn cheap right?

Now forget feelings — we all have ironclad hearts in the 21st Century — let’s talk MONEY. Let’s say 26% of those people in your store check out your competition, and let’s say 1/2 stick with you. Cool… but after wasting your time, the other half purchases elsewhere. If you’re a business, what does a 13% loss in revenue do to you? If you’re a worker, what would a 13% pay cut do to your life?

If you’re a large public corporation, losing 13% of your sales drives your stock so low you’re looking up to earthworms. If you run a small business, losing 13% of your sales may mean going out of business entirely. And if you’re a country, losing 13% of your GDP means you’re in a DEPRESSION.

So 26% of shoppers regularly showrooming is “overrated”?

We’re still in an economy where every sale matters. Look through the rest of Harvard Business Review, and you’ll likely find other articles claiming that EVERY customer matters, especially when individual customers today can obliterate you using the power of social media. (That’s not true, but hey, they’re saying it.)

And we’re not supposed to worry about 26% of our customers using our stores as showrooms for online competitors?

Now, this article goes on to explain how Pinterest actually drives sales… sometimes. But marketing is the art of perception, and that “overrated” statement made me perceive the writers as people who don’t know what they’re talking about.

So if I were a store-owner, rather than hope and pray that Pinterest might make up for all the people using me as a showroom, I’d start thinking about career alternatives. Instead of trying to survive in the brutal, low-margin world of retail, maybe I would start writing articles for the Harvard Business Review. After all, it doesn’t look like they require any experience.

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Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches graduate-level marketing communication courses at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.

4 Responses

  1. Of course often depending on location of purchase (physical or virtual) you end up with a completely different product that yes looks the same but is made elsewhere. And this affects the quality of the purchased object altogether.

  2. I would say that the sales staff’s performance also counts.

    Spending 2 hours in the shop, where the seller made a lesson on photography and use of a camera, and showed incredible love for that particular model would made me feel very bad to walk out to competition to save a few bucks. So while I got it at the same price as buying from competition, I would even pay him some more for his effort.

    And yes, I returned to that shop and buy accessories from him, knowing full well that other shops might be cheaper, as long as the difference wasn’t overwhelming.

    Totally opposite would have been in Hong Kong, for example, where I am sure if anyone made a research, would top the list of most hated places to do any shopping. A lot of staff are plain rude, unhelpful, misleading, cheating. They would absolutely deserve losing sales to the internet.

    Unfortunately that’s where loads of internet sales come from.

    So back to physical stores – they give some peace of mind – you have the real thing in your hand and can inspect it. With online store you really never know what you’re getting. Worst case it could be a rock inside the box, and with shipping costs often being a large chunk of total cost, you’d often just forget about refund.

    The likes of Amazon and eBay, like it or not, are eating away sales of traditional shops in the countries, where people are accustomed to online shopping and feel safe doing it.

    That said, online store is probably also the best place to deal with Honki shops. At least you don’t need to face the sellers in person.

  3. I would say that the same goes for securities analysts. One such analyst that follows my sector for a major US bank came in for a chat one day. I worked for at least one company she analyses and know someone who works or has worked for most other companies she follows. She even had things to say about one privately-held company, as well, even though she has never worked there, or any of the listed companies and the sector on which she is supposedly an expert.

    I noticed about halfway through the meeting that she couldn’t stop shifting around in her chair, looking rather uncomfortable whilst she was rambling on about this or that company. And then I realised that I probably had the ‘you’re so full of shit’ look on my face whilst I was quietly tolerating her monologue… People make investment decisions based on what these clueless people say. Fascinating stuff.

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