The Transaction: A Product Strategy Choice
“Transactional success” was one of the strategic goals for Mona Ataya when she founded and grew Mumzworld into the largest online baby shop in the Middle East.
I heard Mona Ataya’s story as she was interviewed by HBS professor Ranjay Gulati for his What They Are Made Of series of podcasts. I thought about the impact of the Mumzworld buyer’s experience on the success of the company. The quality of the buyer’s engagement with Mumzworld shapes the values she associates with its products and the company.
When I lived in Cambridge, Massachusetts, a Dunkin Donuts coffee shop and a McDonald’s were in adjacent buildings. When I went into the McDonald’s and asked for a cup of coffee, the counter person looked at me and asked if I wanted anything else. When I went into the Dunkin Donuts the counter person looked down at the counter and called out, “Next!” There was no personal contact.
I was struck at the time how different the customer service was between the two shops selling the same cup of coffee with service employees standing less than ten feet from each other. I stopped going to DD for my coffee because I wanted the personal connection I felt when buying my coffee at the McDonald’s next door.
My earlier blog, What Are We Selling?, looked at the disconnect that happens when we do not understand what our customer is buying when they purchase our product. I described how McDonald’s was selling Szechuan sauce for their chicken McNuggets while their teenage customers were buying a sci-fi character dimension-hopping experience. Just read the blog!
In the US, the experience of buying a car from a car dealer has been generally unpleasant. Prior to the recent supply shortages, the price of the car was hidden requiring distasteful haggling about the new car’s price and your trade-in car’s price. Carvana was founded with the value proposition that pricing would be transparent and going to a dealership and dealing with a salesperson was not necessary.
Many buyer/seller transactions are based simply on price – a barrel of oil, a ton of wheat, a painting at auction, and many government contracts. The product is seen as a commodity, and the seller wants the highest price, or the buyer wants the lowest price.
For Mumzworld to be successful, Mona Ataya understood that its potential buyers must be persuaded to change the way they, and probably their mothers, purchased baby products. Price would be a consideration, but the buyer’s experience would be an important part of the value Mumzworld’s customers attached to its products – what the customer is buying.
You are probably not selling baby clothing and pacifiers. Nevertheless, what can you learn from Mona Ataya?
Start by asking what role the transaction process has in your buyer’s purchase decision. Building trust and a shared acceptance of the purchase process are examples. Also, look at the relationship with your buyer after the purchase decision. Customer support and warranty service are important examples.
Carvana and Mumzworld built their businesses with transactional success as a strategic goal. Take a hard look at what your buyer experiences when purchasing your product. What can you do, or should you do, to change that experience?
The Red Door
A red door surrounded by glacial boulders heralds the entrance to Grace Church in Medford, Massachusetts. Built in 1868, Grace is the oldest surviving H. H. Richardson church. Richardson’s masterpiece, Trinity Church in Copley Square, Boston, was built five years later.
