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Why your house is the consumer and not you (or what I learned from the music industry)
Fri, 27th Jan 2023
FYI, this story is more than a year old

If you buy dog food, who is the consumer? You or the dog? If you said you, I am afraid you are part of the vast majority of companies who think that because someone foots the bill, it has a say in the purchase. In other words, companies that mix consumer and buyer.

For if your dog does not eat the food you purchased, there is nothing you can do except change brand. In other words, you have absolutely no say in the matter. And many other cases can be thought of, too, to the point of being forced to accept that your house is the "consumer" of nails, as if its walls are too hard for the nails you purchased, again, you will have to change brand.

The consequences of this go much further than initially expected, and the reason why 85% of the 30 thousand new products pushed on the US market per year fail. They mix buyer with consumer, and thus, all depend on sales data instead of consumption data. That is as silly as depending on production data to predict sales.

In other words, the fact I produced one million bags of dog food only implies that I will sell them, it does not create a dependency or obligation. Likewise, the fact I sold one million bags of dog food only implies they will be consumed, it does not create a dependency or obligation.

So what happens if I did sell one million bags and no dog liked my food? Well, I will be part of that 85%, as I mistakenly used the wrong data (sales) to predict the next batch and will find out that I do not sell a single unit.

The problem is that in both production and sales, I depend somehow on my abilities to produce and sell, respectively, so I know where I stand. But in the case of the consumption, I depend entirely on a third party (my customer), and in the case of the dog food example, that goes even further, as he also depends on his dog. This means that in the case of production and sales, I have good dependable data as they only depend on me, but not in the case of consumption, which depends on others. At the most, I can have some feedback if I implement one of those 0800 numbers for customer satisfaction (that no one ever uses as they keep you waiting forever) or some AI-powered script analysing social media posts on my brand.

So, we have good data on the production and sales of our products but almost nothing regarding their actual consumption. This is rather silly if we consider that the consumption is the most important part of a product's life: the moment when a consumer will decide whether he plans to start buying the product, or if it was a one sale only.

In this, I learned a valuable lesson from my time working as a music producer: the importance of the fan. In the music industry, that is what we ultimately look for: people who love the music of our musicians and are always waiting for their next album. People who are ultimately repeat buyers: not consumers who buy one album and never come back. And to that end, we try to obtain as much data as possible on the relationship with our musicians: what did they like about the last songs, what feelings the lyrics brought up, if they liked the costumes worn by the band in their last show, etc. At the end, the music fans know not only the musicians but their label too and buy any new music coming from that label as they know it will fit their music tastes.

There is no concept of a "fan" in the consumer product industry: it basically doesn't care if the person comes back. It has this attitude of "I got paid, so what do I care?" which is the reason for the 85% failure I mentioned, as spending money producing stuff no one will buy is a sure way for that.

And it also explains products that end up in the gut of some whale after having been improperly disposed of, as the industry only puts a lousy "Recycle me" logo in its products and calls it a day. However, 62.5% of the Gen Z population (basically the consumers of the future) claim they will only consume from sustainable brands. This effectively rules out any brand that shows up on some TV news being the reason for the death of some marine critter. And it does not matter that it was customers Jimbo or Mary-Joe who disposed of that product improperly: it is the product's logo that still shows in all its glory.

So, it will be no wonder if some new brand captures a good chunk of the market for simply replacing that silly logo with something saying, "If you dispose of me using such and such, you will be rewarded". For nothing speaks louder than a reward for actual money spent. So nothing proves real ESG commitment more than that. The rest will still put out websites with pictures of pretty little girls blowing dandelions while speaking about its strict commitments to the environment: laughable greenwashing no one believes anymore.

The consumer product industry should copy the techniques used by the music industry to create a customer base that loves not only the products but the brand per se. And to that, it should join any scheme that provides with the consumer data that the music industry has been capturing for a long time. In a world where data has been dubbed "The new oil", not capturing it is unforgivable