Can these undesirables actually teach companies they can use to improve their business? I think so. To do so, requires an important assumption; that customers who purchase fake products are not dumb. In other words, there is wisdom in numbers to the extent that if enough people are doing something there is a reason.
For each brand owner, the reasons why a potential customer buys a counterfeit item are different. Typically there is one common denominator; that person does not care enough about your product to ensure they are getting the real deal.
This is both a problem and an opportunity for companies to consider. With few exceptions, every buyer of a fake product is a missed sale for a brand owner and we need to understand why the sale was missed in the first place. For example, some years ago I attempted to buy a well-known football strip for a gift to a young family member. From much online searching, it was impossible to purchase the correct size from the official authorized channels, and the only available ones were ones that were certainly fake. In this case, the inability by the brand owner to make the genuine product available was a strong push in the wrong direction. This is a simple example of how adjustments to the business could make fake items far less attractive.
More challenging is to use fakes to understand what features of your product buyers actually value. Fake designer shirts are common. This seems to imply that people infer value on the tiny area of fabric relating to the logo, and are much less interested in the quality of the shirt surrounding it. Perhaps this is not surprising, because typical marketing campaigns for designer products heavily promote the desirability of the logo and its association. I do not remember one that has emphasised the quality, provenance or other attributes of the product itself.
Vibram is still an unusual example of a company that tackled the issue of counterfeits very publicly and proactively by making their customers aware of the differences in technology and quality the genuine items offered. This nimble approach was almost certainly in part a function of the company size but also the company founder/CEO was heavily involved in tackling the problem.
This brings me to my final point. The lessons available from counterfeiters are potentially very valuable but may for the most part be overlooked by companies where the founder has left. Founders feel emotionally connected with the brand (its their “baby”) and they will most likely to think creatively about how to protect it. Fake products are felt almost personally. This mindset can be lost on their departure as companies mature - the opportunities to learn from counterfeiters significantly reduce as the issue becomes typically distant from board level strategy. However, there will no doubt be exceptions.
Published By :
Tim Waring
CEO of Netmonita
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