The Costco Phenomenon

Cosco_CinammonThis morning marked a glorious milestone in my life; I am almost finished with my Costco (Kirkland) Cinnamon. The date stamp on the bottom reads, "best if used by 12/2011", and I am guessing that I bought it in early 2011 - so, it has taken close to four years to get rid of this bad boy. While you're surely thinking, "if this is what excites you, you need a life", I would ask for (an Infomercial indulgence) "but wait, there's more" for one more minute.

The cinnamon giant was stored on a lazy-Susan type kitchen cabinet; it fell on my head numerous times, landed on a hot bowl of oatmeal and continuously blocked my view of other, equally important, smaller spices. But, since "they say that Cinnamon is good for you", I stuck with it.

Full disclosure: This is not a rant about Costco, I love them, really; great value, awesome customer service. And the best thing? The greatest way I know of how to test your "impulse-buy control". I will continue to shop at Costco until I can finally beat my own record: "Let's see if I can leave here today spending less than $16.99." (Hint: it doesn't count unless you walk the entire store).

So here's the marketing take away from this (unexciting) experience: There is no better way to improve your marketing than learn from your own behavior. We're all consumers, customers or clients and while we have our own "wants and needs" we can, and should, learn from our behavior and decision making.

When Costco (or other mega clubs like BJs) opened,  many of us needed two shopping carts and spent a lot of time stuffing boxes into the car. In my case, on a few occasions we had to decide, "are we fitting the giant Special K boxes or leaving one child behind?". While it may "take a village to raise a child" it takes Costco to give one up (you know I'm kidding, right? )

Over the years we manage to tame the Costco beast and learn how to maximize our return on investment; we realized that while boxes appear huge and tempting, the price isn't always the most competitive. We narrowed our purchases to what made sense to us based on how we consumed stuff. For example, I love to buy my wife flowers at Costco; for $17 I can shop practically every week for the equivalent of buying a dozen roses at a local flower shop. BTW, I "so tried" on numerous occasions to just "run in and buy flowers"; never happened and that's why my Costco Challenge stands at $16.99; I have yet to control my impulses.

Now years later, our definition of "value" has changed: it takes time to shop at Costco, we only buy what we'll use and avoid anything that can fall on my head.  We continue to shop because Costco fills a void that others don't, and the experience of shopping is actually quite pleasant (except for the long lines which are predictable too).

In order for your business, any business, to drive consistent and long term growth, it must provide a simple combination of value and experience. You don't have to solve all of the problems in your niche but whatever you offer must meet the test of consistent value and shopping experience.

Contrary to the common belief, size does not matter; it didn't take us long to get over the "oh look, two giant Special K's for $7.99" - it wasn't a deliberate decision-making, or family meeting, that got us to adjust our purchases; it was our own needs and behavior that turned us into smart Costco shoppers.

And, the same applies to all other business. While you may lure a client with a hook; a discount, giveaway, the real question is: Will she come back even if the offer is no longer available? Promos are a quick-fix solution and everyone has one. Costco doesn't have your typical sales or promotions; they don't need to, they've figured it out; low markup and happy employees (who get paid very well).

Costco has something for everyone. We'll keep shopping there because they offer our kind of value and we enjoy the experience.

Where else can you buy detergent, sample free food, buy a car and plan a vacation all in one visit? Tempting isn't it?

Here's a novel idea: Costco Drive Thru. Call ahead, buy only one thing and it has to fit through the driver's window. Nah, too much work. I'll use the Amazon Drone instead.