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I recently read an interesting article titled "Fat Profits" written by Joe Keohane about the fast food industry in portfolio.com. The article summarizes a few significant lessons for business owners. These lessons can and should be applied to your real estate sales businesses.
Let me start by quoting from the article:
"During the past few years, CKE Restaurants, the parent company of Carl’s Jr. and Hardee’s, has employed an audacious go-for-bloat approach that defies just about everything you’ve come to assume about the business of modern fast food. (See nutrition data for CKE franchises and other fast-food chains.) In an age when other chains have been forced to at least pretend that they care about the health of their customers and have started offering packets of apples and things sprinkled with walnuts and yogurt, Hardee’s and Carl’s Jr. are purposely running in the opposite direction, unapologetically creating an arsenal of higher-priced, high-fat, high-calorie monstrosities—pioneering avant-garde concepts such as "meat as a condiment" and "fast-food porn"—and putting the message out to increasingly receptive consumers with ads that are often as controversial as the burgers themselves."
I underlined two important statements. Here they are:
1) …purposely running in the opposite direction
2) …putting the message out to increasingly receptive consumers with ads that are often as controversial as the burgers themselves.
These two statements actually present three business lessons. First, do the opposite of what everyone else is doing. This shouldn’t be a new strategy for you, if you have been paying attention to this blog. It is nice to see it in play in other industries. Second, give your customers what they want. Don’t listen to the so called critics, and/or experts (ex: manager/broker). Only listen to the people who give you money – your clients. What do your clients really want. Third, use controversial marketing to attract attention.
Let me add to the quote above from the article…
"…and judging by the growth of both chains, it’s working extraordinarily well. Since 2000, CKE’s average sales per store have increased by 31 percent, a rate greater than any other burger chain’s, save for the nostalgia-mongering Sonic drive-ins, with which CKE is tied. And its stock soared, from about $2 in 2001 to more than $22 last June, before slipping back to around $15 at the end of the year."
Is this proof that doing the opposite of what your competition is doing may actually be more profitable? I think it is. Most of the well known fast food restaurants have gone the other way with their menus. They have tried to offer healthier burgers, fruit and salads. Not CKE.
Read on from the article to see what CKE learned about their customers…
"For all the buzz created by snack wraps and yogurt parfaits, burgers and fries remain the two most frequently ordered items in American restaurants, according to industry research group NPD Foodworld. In fact, the addition of salads at McDonald’s and other chains is partly aimed at drawing more burger-eating men by placating wives and girlfriends who would otherwise veto the restaurant choice. "What people say they want and what they do don’t match up," says Darren Tristano, an executive vice president at Technomic, a food-industry research and consulting firm. "If they say, ‘I’m gonna order more salads,’ they’re going to order more french fries." CKE marketing head Brad Haley, who looks a bit like a golfer with his short-sleeve shirt, goatee, and nascent paunch, echoes the sentiment. "People say what makes them feel better about themselves in surveys"
CKE learned this by watching what their customers actually do, not listening to what they say. We should do the same thing with our customers. What do your customers actually do? What do they really want? Do you know? If you don’t, your business is in trouble.
Read the article to see how they have used the negative publicity about their big burgers to their advantage. It’s genius. I actually laughed when I read it. CKE actually learned how to turn a negative situation into a fantastic marketing opportunity. Right now, real estate in the States is receiving tons of negative publicity. How can you use this negative publicity to your advantage?
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