144: Relearning How to Fish for Auction Buyers (and Sellers)
H-E-B is the largest privately-held grocery chain in the United States. Last year, Forbes ranked the company as the fifteenth largest privately held company of any kind in America. If you talk to someone who has emigrated from Texas, H-E-B is one of the things they miss most about the Lone Star State.
I spent some time with a former vice president of the company, while he was working as a consultant where I live. On a weekend road trip with him, he told me about his unique and impressive career path and what he learned from his time at the company. (He has since moved onto Fortune 500 consulting, media ownership, and other successful entrepreneurial ventures.)
One of the things he attributes to H-E-B’s growth and success was how it decided what to put on the shelves and where. Apparently, the grocery industry used to include a lot of supplier lobbying. Food companies would wine, dine, and all but bribe grocery chains to put their items on the shelves, especially on end caps and other prominent positions. Early into the barcode era, H-E-B started tracking what customers actually purchased. They learned what varieties and brands sold more than others, what size packaging outperformed other configurations, and what price points created the most transactions.
Then, they adjusted their store layouts and product lineups accordingly.
Store and chain managers may not have enjoyed the same gifts and junkets, but they soon benefitted from higher sales volumes. Joe said a little store named Walmart adhered early to the same track-and-adjust strategy. It seems to have worked out well for them, too.
I would imagine that sales analytics are standard practice now for major retailers—and far more comprehensive than what H-E-B and Walmart first used. They got to those trends early, if not first; and it has led to market share domination.
The auction industry is at a similar place as the grocery industry was in the 1980’s. Most auction companies keep marketing the way they have for decades, just with more media expenditures. As a graphic designer, I like it, because it means more work for me. As a consultant, it scares me, because there’s only so much I can help a company without analytical data.
Relatively few auction companies are leveraging the tools available for actionable data. Not even the free tools, let alone the $10-per-year ones. I know this because I ask. As the industry evolves and transitions online, we have the potential for even more data points that will offer even better strategic intelligence.
Like a 1980’s food supplier, I currently benefit in the short term from my clients’ ignorance. It frees me from adapting, from changing my skill sets and value propositions. If I want to sell more volume with more longevity, though, I’ll need to adapt to my clients’ customer’s patterns.
Here’s the rub: I can’t get that knowledge for them, and I can’t get it without them. That’s why I’m educating myself with instructional videos, online seminars, and offline courses like the Auction Marketing Management curriculum. I’m hoping that soon I’ll be able to teach my clients how to fish, even if that might mean fewer fish heading my way.
In the current marketplace, there’s no excuse for relying on instinct. Our marketing mix should include more experimentation but less guesswork. Our customers on the aggregate are telling us how and where and when to advertise and conduct transactions. The buying public is always right, whether we like it or not; and they’re generating the data to prove it.
American statistician and author, W. Edward Demings, said it best: “In God we trust. All others must bring data.”
Image from this source.