In 1982 Victoria’s Secret was a four store chain headed for bankruptcy. Their strategy of selling lingerie to men wasn’t working. Leslie Wexner bought the company and sales now top $7bn, with analysts seeing $20bn in global potential. In the speciality retail world they have market leading sales per square foot and profits. Victoria’s Secret is now one of two primary brands at L Brands, a $28bn company where Wexner is CEO, Chairman and Founder. He’s now 78.
BCG Perspectives made a thorough analysis of what made Wexner and Victoria’s Secret a success. Interestingly, much of the insight that made the business work is the sort of insight that comes from customer development. Customer development only emerged as a thing in the last 5-10 years, so in one sense they were ahead of their time. In another important sense they weren’t though, because whilst Wexner’s instincts took him to the right place he relied on the magic of his own intuition rather than understanding that appropriately structured customer interviews are a powerful tool for developing and checking gut feel.
The following are quotes from the BC Perspectives post (emphasis mine):
- Consumers cannot think in abstractions. They cannot envision a new concept. They cannot predict their own behavior.
- A curious mind asks the questions that open up the consumer to talk about her latent dissatisfactions, hopes, wishes, and dreams. A curious mind knows that functional goods sold en masse earn a good return, but breakthrough profits come from satisfying emotional needs. A curious mind does not jump to conclusions but tests carefully and thoroughly.
- You need to get into the heads of consumers and be able to tell their stories. It is both art and science.
- Winning solutions respond to the distinct and specific needs of a group of consumers.
- A curious mind does not jump to conclusions but tests carefully and thoroughly.
- Completely understand your customers by seeking an intense, complete, and empathetic view of their lives and the context for their purchases.
- Deliver infinite growth by having your customers talk about you, exclaim about you, and tell their friends and colleagues about you.
This chimes with a lot of our thinking, as captured on The Path Forward. As mentioned above, the best way to glean these insights is through structured customer interviews. My partner Dharmesh wrote a guide to doing great customer interviews here.