
5 business lessons from Costco  - dawie
http://www.37signals.com/svn/posts/505-5-business-lessons-from-costco
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ivankirigin
> 1\. Take care of your employees.

That is certainly a given. Luckily, lots of hackers I know just want to be
given hard problems. The cave offices with aerons and dual 30-inch screens are
just good tools :) Lots of the tasks done by employees at Costco and other
such stores will become automated. Say, within 10 to 20 years -- which is
actually light speed. But no need to elaborate on that SciFi.

> 2\. Keep prices low.

For the web, this seems to translate to: "make it free". That makes lots of
sense, I think. Too bad ads are too often the business model for content
creators.

> 3\. Pay attention to the customer, not the competition.

Too true. And for the latter, it shouldn't change your behavior, right? Young
companies with lots of competition need to work as hard as possible to make
what people want. Young companies with no competition should work as hard as
possible to make what people want and fill the void.

> 4\. Focus on a few core options.

Feature creep in software can make users cry. I recall that interesting survey
the other day, where given a grab-bag of capabilities, a survey group were
allowed to configure a cell phone in any way they wanted. Then, given cell
phones that matched their wish list- they complained that it had more than
they needed.

But on second thought that could have easily been caused. poor design.

> 5\. Use surprise to create excitement.

This is just a way for Costco to make customers happy, which is the main
point, right?

It would be interesting though if a web company tried this. For example, it
would be cheap for Reddit to give a $100 lottery for that days highest karma
gains. That rubs me as dangerous though.

On a side note, Costco is doing a bit of emotional leverage here. People hate
WalMart. It is very much in Costco's best interest to start saying, "wow,
people love us". Not that there is anything wrong with that...

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snorkel
Cosco's real secret is selling common household items less per unit but
packaged in bulk thereby forcing the customer to actually buy more. A similar
pricing structure in the online world is web hosting for only $7/month
__"WOW!! That's cheap!!!" ( __your signup choices are $7/month for 36 months +
$120 setup charge, $15/month for 24 months + no setup fee, or $20/month for 12
months + $40 setup fee) It's a strategy of getting the typical customer to
spend more per sale.

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dcurtis
Wow, that's really awesome. Although I think Costco can do a few things to
bring their image up to speed (the logo is pretty hideous, the marketing
materials are pretty ugly and cliche), this article really makes me respect
the company and the CEO.

Why can't all companies work like this?

~~~
staunch
> Why can't all companies work like this?

Because most people believe that in order for them to win someone else must
lose.

