Blockbuster on the block: "STORE CLOSING ~ ENTIRE STORE ON SALE ~THIS LOCATION ONLY"
The problem? It's not "this location only." One by one, Blockbuster stores in Tucson are closing. And it's not just Tucson...
A Consumer Shift
September 22, 2010: WSJ's Mike Spector writes "Blockbuster Inc. is in the final stages of preparing a long-awaited bankruptcy-court filing, marking a milestone in consumers' shift away from brick-and-mortar video stores to films delivered by mail and the Internet."
Blockbuster filed bankruptcy the next day. Chances are very good that you helped put them in the tank. "Me?" you say. Yes, you! ...and me, and your neighbors, even company employees who signed up with Netflix.
That's the nature of a consumer shift in preference for product delivery. A new method of delivery makes it easier and/or less expensive to buy the product. Early adopters try it out, find that it works, and they tell their friends. Their friends try it, like it, and a shift in customer habits creates a groundswell. The old delivery method withers and dies.
It's not about loyalty to the brand
Early in the life of Netflix (my customer when I was Product Specialist for OPEX Business Machines Corporation) Blockbuster studied the upstart Netflix.
Someone at Blockbuster came to the conclusion that the alternative business model (originally mailing DVDs through the mail) was not a significant threat because Blockbuster had achieved such significant brand loyalty. What they failed to see was that technology was changing and evolving, and that Netflix, with its huge database of current customers, was in a superior position to make use of that technology.
(Blockbuster had a huge database too, but it focused on payment processing and late fee collections. Blockbuster's use of technology revolved around making things easier and more profitable for Blockbuster Inc., not for the customer.)
Consumers weren't loyal to the Blockbuster brand. They were loyal to their favorite movies! They were loyal to convenience. They were loyal to their pocketbooks and their couches, and this is the lesson for Real Estate Agents and Mortgage Lenders.
It's about convenience, predictability, reliability ...and finally, price
Convenience: We're a nation of very busy couch potatoes. We work hard to keep and maintain the lifestyle we want, and we've come to expect that businesses we patronize will make things easy for us.
Predictability: We've come to expect that things will work right the first time.
Reliability: We've come to expect that things will work right every time.
Price: Price point is not the beginning of the business success equation. If you're a REALTOR, you know that! FSBOs (For Sale By Owner) list their homes with realty companies something like 70% of the time after 60 days of not getting what they want ~ the sale of their house.
Let's look at technology as a benefit for our customer or client, and see how we can innovate for them. Let's realize that technology is changing more than our marketing strategy. It's changing the way we deliver our services.
If your company hasn't realized this, if it hasn't taken steps to make the delivery of services convenient, predictable, reliable and less expensive, you might want to start looking for a company who is headed down that road.
Your company may be headed down a dead end street.
I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender.
SUNSTREET MORTGAGE llc ~ Correspondent Mortgage Bank
Offices (AZ) Mesa, Tucson, Sierra Vista, Nogales, and Albuquerque, NM.