I’ve been reading the book E-Myth Revisited and it’s pretty amazing to see so many “business truths” in a book that’s got so much good reviews and praise.
Here are some of the “truths” I’ve read from the book:
“Fact” #1: Within five years after launch, more than 80 percent of the US businesses will have failed.
It was quite amazing to see this “fact” in the second page. It was something that the author bases his ideas. And that’s pretty bad, because 80 percent of companies won’t fail within 5 years. Some merge to bigger companies, some business just survive. After hearing this “truth” in the beginning of the book, it was bit tough for me to orientate. I thought that if the author bases his book on false numbers, what else there is to believe?
I decided to ignore that fact, moved on and encountered the next “fact”.
“Fact” #2: Blue suits outsell brown suits
The author asks salespersons to wear 3 weeks brown suits and then 3 weeks blue suits, and he claims that blue suits outsell brown suits. He claims that “sales will go up during the second three-week period”. Well… I don’t buy it. I’m certain that if we took every possible sales situation and put people wearing blue or brown suits, blue suits wouldn’t differ that much. In some cases they probably could, not for every – or perhaps even close to that.
Just think about it. If you are hungry and go buy a hamburger, are you more likely to buy the hamburger from somebody who wears blue suit compared to somebody who wears a brown suit? I doubt it.
I believe that testing different combinations is important. I believe that in some situations blue suits might work better. Perhaps in some type of stores wearing hat versus not having a hat has an impact of sales. Which way, it’s not possible for me to say – but it might have impact. Small things can have impact, but they need to be tested.
But stating something like an absolute truth… is bit… unexpected. Which leads me to the last “business truth”.
“Fact” #3: Saying “Hi, have you been here before?” instead of “Hi, may I help you?” will increase sales by 10 to 16 percent
I don’t buy that. The author claims that if a salesperson asks from the customer: “Have you been here before” she can then continue (whether the customer says “yes” or “no”) by saying “Great, we have special program for new people/those who have shopped here before.” And that can lead to discussing more.
While I agree that it can be effective in certain situation, there’s a danger that the impact won’t last for a long. What if I go to that store 5 times per week. Every time some salesperson comes to ask me “Have you been here before?”. I would be like: “YES, YESTERDAY, THE DAY BEFORE, AND BEFORE THAT – AND YOU’VE ALWAYS ASKED ME THAT SAME QUESTION!”.
Or I wouldn’t go to the shop any more because I would know that the salesperson would try to hunt me every time I go there.
Which reminds me about a story from the past. I was very close to switch my phone operator years back. Every time we went to grocery store there was some phone company sales people handing us fliers. When we went to the store we got fliers. When we got back (and had hands full of bags) we got fliers. Over and over. I thought about purchasing a hat that would have said: “I’M THE CUSTOMER OF OPERATOR X” so the salespersons could read that and leave me a lone.
The point is… the sales can increase by 10 to 16 percent. Or they can increase 35. Or go down 2 percent. Who knows. What I do know that they won’t immediately increase 10 to 16 percent for every single store. In some stores it might have the opposite effect. It depends.
It’s true that certain type of behavior (even something seemingly irrelevant) might have a big impact on sales. Humans are emotional creatures, and make irrational purchases. There are many factors that influence our buying decisions, and those factors can be researched and experimented. I don’t think it’s such a good idea to believe these type of numbers, because frankly the results can vary a lot.
In the end, it’s a matter of researching and testing.
Enough from me. What’s your thoughts? Care to share some “business truths” you’ve heard of lately?