Thursday, November 23, 2017 | Today's Vending Industry News
Turning Consumers Into Customers

Posted On: 2/10/2014

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TAGS: Vending Times editorial, vending industry, vending editorial, retail automation, vending operator, micro market, vending industry history, coin machine, coffee service, food service, Tim Sanford, A customer is always right, a consumer is always looking for the lowest price, retail trends, Sam Walton

The term "consumer" has ballooned from an economic definition to a sort of cosmic force. In our youth, people who shopped at a store were "customers," and (in the older formulation) their shopping meant giving that store their "custom." The term seems to be derived from Latin words for "with" and "self," the sense being that something you do repeatedly becomes habitual, a part of yourself -- a custom.

In those days, the customer was always right. The best advertisement was a satisfied customer. Henry Ford pointed out that an employer simply handles the money; it's the customer who pays the wages.

This view of the customer is by no means extinct, but over the past three or four decades it has been overtaken by the broadening and strengthening of the term "consumer." Customers buy things; consumers consume them. The difference is subtle but important. "Customers" can shop somewhere else (take their "custom" elsewhere). "Consumers" simply shop; their consumption is tracked anxiously at critical periods throughout the year, as an index of economic health. And they are thought to need "protection," since they have no alternative but to consume, and so are as vulnerable as zebras approaching a water hole.

"Customers" will buy what they want; "consumers" must buy something, and generally will buy what's cheapest. Being a customer involves making determinations about the value of a possible purchase -- not only of the product or service, but also of the reliability and (if you like) the sympathy of the seller. By contrast, consumers often seem to be imagined as similar to large marine animals swimming through clouds of food, swallowing all that crosses their paths.

When full-line vending was new, retailing experts worried that machines had no personality, and so could not really sell to customers ("there's nothing automatic about automatic retailing"). Pioneering operators strove to personalize their service by training their route drivers and supervisors as "customer service representatives," recognizing that they are the face of the operation to the people who use the machines. Those operators conducted periodic "customer appreciation" promotions, often by stationing a supervisor in the vending area during a coffee break or lunch period who offered to buy customers a cup of coffee or hot chocolate. They rotated new and sometimes novel merchandise through their machines, keeping interest up while continuing to satisfy demand for the core items.

Operators are doing this still. The application of new kinds of machine intelligence to the customer interface certainly makes it easier to promote, but it is a mistake to think that there were no promotions in vending before the arrival of touchscreens and wide-area networks. Interactivity also often is described as novel and transformative, but vending machines always have been interactive: the machine displays its products and their prices, the customer inserts money and pulls a knob or presses a button, and the machine responds by delivering the desired item, and change when appropriate. We suspect that this is about as much "interactivity" as the majority of vending customers want.

Marketing theorists often speak as though the challenge is to categorize people with sufficient skill and precision to identify a small number of psychological buttons common to members of each demographic group; simply pressing one of those buttons then will trigger "consuming" behavior. We think they really know that the task is more complicated than that, but in a market vaguely conceived as "global," it is easy to suppose that doing just about anything will induce a certain percentage of people to buy something, and if there are vast numbers of people, the volume will be satisfactory. This belief is the only explanation we can think of for email "spam."

Vending and coffee service operators know that they are not dealing with that kind of inexhaustible undifferentiated audience. Most of their locations are populated by relatively small numbers of individuals whose principal similarity is that they must spend their workdays there. The challenge is not to "exceed" expectations, but to create the expectation of an appealing variety of good products at fair prices, and then to satisfy that expectation every day. This, of course, is impossible; what is possible is to react promptly, effectively and courteously when a problem arises. The starting point is the half-century-old summary "clean, filled and working." This is every bit as true of micromarkets.

The operator who finds a way to convert those individuals into customers -- people who have made pleasant purchasing a daily custom -- will find technology very helpful in maintaining that cordial relationship. Those who do not are likely to find that technology will not save them.

Walmart founder Sam Walton famously observed that, no matter who owns the company, the customer really is the boss because he can fire everyone simply by shopping somewhere else. And these industries have customers, like it or not.