Just because your business has been around for a long time does not guarantee that customers will continue to buy from you. For proof of this problem, let’s go into the kitchen and Clear the Path of some old-fashioned thinking.
I have a friend who can’t bake but needed to bring a homemade dessert to a party. I suggested Rice Krispie Treats as they have only 3 ingredients (cereal, marshmallows, and margarine) and three steps (heat, stir, and cool).
To get the measurements, we went to the Internet and looked up the recipe. The top choice took us to the Kellogg’s website. Rice Krispie Treats were created by the company but there’s no reason why you have to use that particular cereal.
In fact, most grocery stores have a store brand of that kind cereal that costs less. So why would you buy the Kellogg’s version?
The website raises this issue in a clickable section called, Why use Kellogg’s Rice Krispies? But the only answers given is that the product has been around for more than 80 years and that to enjoy the “timeless flavor” of the treats you need to use their product.
To me this says that there is no difference between the Kellogg’s cereal and the store brand. The Kellogg’s people are hoping that a sense of tradition will make you spend more money.
But cereal isn’t a car where you’ll pay more for tangible benefits like luxury or safety.
Kellogg’s is a big company that can absorb some loss of business to competitors but can you? Are you relying too much on loyalty and longevity to keep you afloat?
Let’s consider UPS. UPS is more than 100 years old and continues to be a successful company. But if I have to ship a package quickly, the deciding factors are speed, price, and quality of service. If FedEx, DHL, or the U.S. Postal Service can beat UPS on these things, then they’ll get my business. Age doesn’t enter the equation.
Unless you’re a college professor, tenure isn’t that important.