2+1 ¢ : A Full Cent More on Customer Insights

My brother started playing guitar since he was 12 and he was pretty good at some points. My family all felt pretty surprised that he became an engineer not a musician. According to him, one of the reasons he didn’t even try to make music his career was the guitar he likes is too expensive and mixers are costly too. In fact, he wanted a Martin Guitar, one of the finest guitars that money can buy. Celebrities, from Paul Simon, Willie Nelson, and Johnny Cash to Eric Clapton and Dave Matthews Band all own one the this babe and performed with it. Special edition’s MSRP is up to 25 thousands Dollars a piece, and even the more affordable models cost $2000. Despite all that, Martin Guitar is still considered a highly valuable investment and most of all, it does not depreciate.

So how did Martin Guitar do it? In my opinion, first, the celebrity endorsement marketing approach works quite well in the music industry. Second, the company creates a remarkable product that the right people seek out. Then, the company can charge high premium to the customers who crave for the products. Their manufacturing capacity is always full with more demands increasing every year. Our class has been doing exactly the same practice: identifying the target segment, gaining insights and finally developing products. This weekend, I spent most of the time making a product prototype of 'recessed shower caddy' and I was wondering: Seriously! If I was the VC, will I invest on this piece of "art" out of my own pocket?

Obviously, it will require more work and time to complete such task in the real life. For example, we will have to choose an appropriate pricing model to stay competitive and also profitable. Even though the idea of product is not new and customization products are usually more expensive, we designed the product knowing it serve the customer’s needs to make bathroom clean and more organized. If we understand the customers better than they understand themselves, we are able to provide a higher value proposition than the modular piece-together fixes and up-sell the customers with a more complete solution for bathroom organization. Gaining customer insights is like getting a pass code to their bank account; marketers will do little wrong with whatever they are going to sell.