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of a business that used it to build a multibillion pounds company.
Another way to describe the combination is customer obsession +
cost reduction = exponential profit. Sam Walton did this with
WALMART. He borrowed 20000 dollars from his father in law and
turned it into a multibillion pounds company as the biggest
company in the world in the 90s. Sam Walton was so obsessed
with customer satisfaction that even when on holiday with his
family, he was looking for a new way to wow customers. He would
sneak out to other stores to see what they are doing that he could
copy to use in his own stores. In terms of cost reduction, Sam knew
that people would drive miles to look for bargains, so he would
reduce some items to a price lower than cost to attract people into
the stores; the trick is getting them to the store and people
generalize in their mind that if one could be priced so low then
every other item in the store must be the same. In fairness, even
other items in the stores are still low priced. Early in his business,
he realized that the key to success in retail is sourcing all kinds of
goods at low prices so that the customers get the value. He was
very prudent when it comes to money, he would work on Saturdays
and request his managers to do the same. He paid his managers
well and reward them with a percentage of the profit generated by
the stores. He didn't do that because he loved the managers but
because he loved his customers. He reasoned that if the managers
were happy, their staff would be happy and hence the customers
would be happy too. If you have noticed that cost reduction was
central to his method here as well as providing additional value to
the customers. It falls within the same ‘value innovation’
combination of cost reduction +customer value = exponential
profit.
Use questions to find how to reduce your cost and also increase
buyer value at the same time. If you are thinking this is far-fetched
and you cannot do it by yourself, maybe you are right, therefore
we set up workshops and courses to help you do this
systematically. You may find the link to be part of this on
mbckonsult.com or any of our Social media pages.

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