Tuesday, October 25, 2011

Editorial: More than just a business

Today we have an editorial for you by me!  I make no claims to be an expert in business but this article comes more from my observations of the past few months and my limited knowledge of human nature.  Warning!  Great Wall of Text incoming!  TL;DR can be found at the end

Something new and strange is happening in the world of business today.  Thanks to the internet, the world is becoming increasingly connected on a global scale.  No longer am I limited to my experiences in my own town, state, or even country, but now I am connected to other people in other parts of the world.  This has huge implications in all areas of our lives but as a teacher, I am really feeling the impact in my classroom and feel like this is changing what it means to be a successful business.

 For those who are or have been in high school, you know how people like to form their own groups or cliques.  While globalization has not changed the fact that these cliques happen, something interesting has happened about the structure of cliques and the people that are a part of them.  In particularly small communities, people tend to bunch together regardless of personal interests.  If there are only 10 people who live near you, you will be less likely to ignore friendship, even if you have few common interests, right?  I have witnessed this myself as a teacher at a boarding school: you find yourself being friends with people with whom you might not usually associate because there just aren't many alternatives.

This is the internet
With everyone becoming more connected across long distances, people find it less important to make personal connections with those around them.  Instead, you can eschew friendships with individuals because you can easily find others who share your interests.  This is why I totally support online dating: you end up finding the person who's right for you, not the person who's just the best you have available at the time (shameless plug:

So what does this have to do with business?  As an avid consumer of miniatures games and related products, I'm finding that customers are much more vocal about their displeasure when the product is not to their liking.  Wait, no, it's not that they're more vocal, it's that there are more people who will listen.  If I complain to my colleagues about the GW price hikes, they will scratch their heads, but if I mention it online, suddenly there is a community with similar interests to my own who will pay attention.  Doing business is no longer about what you can get away with, because your customers talk to each other and good customer service isn't enough anymore.  People can see the big picture and - even if they're wrong - their perceptions can taint entire swaths of a community and disrupt normal business.

The first Google Image Search for "GW Price Hike"
Get it now?  Businesses who have a specific customer base (such as video games companies, miniatures games, etc.) have a lot more to lose from bad customer perception.  This is something that has been seen especially with Games Workshop.  They have been around for 30 years and make some of the best miniatures on the market, but recently have been drawing the ire of the customers for standard business decisions: price hikes, controlling leaked information, and changing production materials.  Why are these such a big deal?  Customers feel alienated.  Playing a miniatures game is like a relationship: you spend money on it, you spend lots of time with it, it's truly unique to you, and you're passionate about it.  Customers want to feel like they are a part of that relationship and when decisions are made that directly affect them in an adverse way, they will be unhappy.  It's more than just about about a product, it's something that becomes very personal and you spend a lot of time on.  It's like spending 100 hours playing a video game, only to find out that the next time you turn the game on, some of your achievements or items disappeared or are completely different.  You feel cheated!

Finecast resin is cheaper than metal... for the company
With Games Workshop, their decisions are not out-of-line for a business.  The customer doesn't think the same way anymore.  They aren't even just customers, but more like a partner in a relationship.  They - or I guess I should be saying "we" - say "I give you my hard-earned money because I trust that you will support me and my hard work.  I love what you do and I support you, but I expect some love and support in return."

Games Workshop is making withdrawals from the "Love Bank" they have with their customers, without making any deposits.  With such a love deficit, many (such as myself) have moved-on to other games, other experiences.  It feels like ending an abusive relationship.  I keep looking and seeing what new things GW is up to, wanting to go back, but deep down I know that as soon as I trust her, she'll just hurt me and disappoint me again.

This is not intended as a GW rant but something happened last week that got me really worried: Privateer Press announced that they would be releasing a new light warbeast for Minions: the Boneswarm.  This is a really neat model but looks strangely familiar... that's right, the Iron Kingdoms Boneswarm.  Wait a minute... that model is only $10, while the new model is priced at $19... and looks exactly the same!  This has irked several fans in the PP forums, and rightly so!  This sounds a lot like a dirty tactic that GW would do - almost doubling the price for the same miniature?!  Outrage!
"Classic" Boneswarm... wait, what?!

In this author's opinion, PP needs to tread lightly, as they have done a great job making deposits in their customer "Love Bank" and this is one big withdrawal.  This has the potential to blow up in their face, especially considering they have experienced incredible growth this last year (I've heard 400%!) and I'm sure that much of that comes from those emigrating from GW games like Warhammer 40k and Fantasy Battles because of some unpopular company decisions.  Let's hope that PP will at least address this issue publicly (they aren't hiding the fact that the price hasn't changed) and reassure their fans.  They won't lose anyone, but people will certainly become skeptical, and that's not a place you want to be at in such a niche market.

TL;DR - Business these days require you to appreciate your customers because there are lots of people who will listen to their complaints, thanks to the internet.  Games Workshop has made some mistakes and lost lots of customers for business decisions that didn't have the customer in mind.  Privateer Press needs to be careful that they don't make the same mistakes if they want to be successful.
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