Dear Rich Bastard

Trite statements such "businesses must know who their customers are" are easy to ignore. The importance of these types of statements become clearer, though, when one considers what happens at the extremes. What may be true somewhere in the middle, is often entirely false at an extreme. The levels of truth not only diminish (or increase) along the way - there may often be a complete 180-degree 'flip' at some point.

Porsche

We recently highlighted Porsche's 2030 strategy. Porsche is near one extreme of what vehicle companies are able to offer. They can therefore turn their focus away from mundane types of measures that other vehicle manufacturers have to fixate on.

Porsche wants to draw customers by selling them dreams and art.

Ferrari

Porsche is "near one extreme" (and yes, you may disagree on what will be stated next), but at an even further extreme, away from the mean, is a company called Ferrari.

Ferrari says: People already know that we sell dreams and art. So, we 'allow' you to buy our vehicles as long as you follow our rules. And these rules (such as 'no alterations') are quite hectic.

Break Ferrari's rules and you will never be allowed to buy another Ferrari. From that rule link above:

"... you aren’t allowed to make any alterations to the vehicle, which includes what’s under the hood (the engine) and the exterior of the car. Once again, you may own the car, but don’t get caught breaking the rules, or you’ll be banned from ever buying another Ferrari."

Rules for Deviants

Think about this: Ferrari's customers (or many of them anyway) are literally, given their extreme wealth, rule-breakers. Us plebs have to follow rules. These people don't. Yet Ferrari demands extreme followership from them.

Now, you clearly only get those types of people to follow your rules if their desire for your product is so great that, for once in their lives, they comply.

Dear Rich Bastard

There aren't many companies that can get away with "Dear Rich Bastard".

Thus Ferrari's strategy will probably always be centered around two aspects: (1) Italian design and (2) engineering excellence - with all four of those words being important.

So, knowing who our customers are (or who we want them to be), directly impact what our strategy should be. And vice versa. The one directly determines the other.

Saks Fifth Avenue

So, it will now be very interesting to see how the new strategy from Saks Fifth Avenue (San Francisco, USA) will pan out.

The store is transitioning to an appointment-only model and will allow no more walk-ins.

I.e. Saks will move closer to the Ferrari approach. "We will only sell to you (in fact we will only show our products to you) after you have made an appointment".

This is a brave strategy.
(Or, a desperate one?).

Bring the popcorn.