Cut the Crap: Dilution, Rubbish, Quality
What is the most popular business strategy in world for enhancing profit? Dilution. Taking a good product and diluting it in hopefully ways the customer won’t notice.
Often referred to at ‘cutting’, as in ‘cutting a heroin with sugar’. Or also, ‘cutting corners’.
- Enterprise Software – Winning apps CUT with bundled bits that no one wants or uses.
- Management Consultants – Business pitching gurus CUT with over-worked, novice recent grads.
- Mass market Food – Quality recipes CUT lower cost ingredients and additives to extend the shelf-life.
- Restaurants – Meal specials, deals and promos are CUT with over priced drinks.
A colleague of mine at used to call it the ‘Lancome Goodie Bag’…free with every purchase, a bunch of stuff you really don’t need or want but makes the deal seem better.
What does this have to do with 70-20-10? Well, I crudely posit that…
- 70% Dilution – Businesses pursuing profit through some sort of bundling crap-with-quality dilution.
- 20% Crap – Businesses just selling crap (and getting away with it for loads of reasons or duly go out of business) – see above.
- 10% Quality – Businesses just selling pure quality.
I would put Apple, Starbucks, Piero, and any high-integrity artisan product into this elite 10%.