Jack In the Box takes on Costco--So Does Cheap Bastid

You’ve just got to love Costco. They seem to have taken over a great big chunk of retail business. I’m a member and have been for about 10 years now.

We typically hit Costco once a week for some of our basics and like to take a look around while we’re there. Costco is this huge repository of merchandise. You can get “mass quantities” (with apologies to the Cone Heads of SNL fame) of just about anything.Our buying as slowed way down because of my employment situation but it’s all about saving money which we can do on some things at Costco.

If I time it right I can go to Costco and get enough "free samples" of food for a pretty good lunch. It really helps if you go there when your blood sugar is low. It took me a while to convince my wife that there can be an advantage for me to make a mad dash back to the grocery & meat department to get some blood sugar from the samples of pulled tri-tip and gorgonzola cheese. (She'll indulge it now as an antidote to Cheap Bastid crankiness).

Jack in the Box just took a trip to “Costco” for it’s newest commercial. If you haven’t seen it, take a peek. It’s a hoot:



Not that I’m anal retentive or anything (I’d say no, but my wife would definitely disagree with that—rightfully so) but I check stuff out. A few months ago, while the weather was still cool, I was thinking about buying a new pair of jeans. Now, Cheap Bastid that I am, I was checking out the Kirkland brand jeans at Costco for $12.99. I can do that math and I don’t need high fashion, expensive denim to cover my fanny.

But I could never find my size. I’m a 34 x 30. A pretty common size especially in Southern California. You’d think that Costco would be aware of the fact that there’s a lot of guys my size here—old white guys like me plus Hispanic and Asian men who are also a bit on the height challenged side.

So, Costco would get some in. And I’d take a pass. I just wanted to see how long they’d last. They always have every size imaginable—except 34 x 30. There’s 32 x 30, 36 x 30, 38 x 30, 40 x 30, etc. And all other longer inseams. A few weeks ago there were a dozen pairs. The next week none. Last Friday, I stopped for my weekly inventory and they had a whopping 24 pairs of 34 x 30. I bet there aren’t any this week!

And then last week we needed coffee. I drink Kirkland because it’s a richer and finer grind. It used to be cheaper by about a dollar than Folger’s. But Costco raised the price so that it’s now more expensive than Folger’s. I’m drinking Folger’s now.


But our favorite thing of all to do at Costco is check out the cute little kids. Ooh-ing and aah-ing like a couple of frustrated grandparent wannabes.

Maybe what I need to do is either get a life or get a job at Costco.

Chrysler to Iacocca--Return Your Demo! Can Detroit Come Back?

This morning, Reuters is reporting that former Chrysler CEO and icon Lee Iacocca will be losing both his pension and lifetime company vehicle as Chrysler proceeds through bankruptcy.

Now, I don’t think that Iacocca losing his company car is any huge deal to him. He can probably afford to buy any vehicle he wants. But, the article did remind us that it was Iacocca who became a visible spokesperson for Chrysler appearing in numerous commercials proclaiming “If you can find a better car—buy it.”

This was back in the early 80’s and had more to do with the resurgence of Chrysler Corporation than did Ricardo Montalban’s pitch for the Chrysler Cordoba with its’ “fine Corinthian leather” in his inimitable accent.

Montalban, like Billy Mays, was a paid pitchman. It was entertaining though. But when Iacocca extolled the virtues of his products, we believed him. He was Lee Iacocca—the CEO, a giant in the auto industry. He was just talking to us on the TV and being honest and upfront (at least in our perceptions). Iacocca was talking about the value of the vehicles made by his company. And that’s where I’m heading with this.

The Detroit 3 are all in trouble. The only one which seems to be steadily working its way out of it is Ford. As we all know both GM and Chrysler are in bankruptcy. Very simplistically the way they’re going to survive and emerge from bankruptcy is through careful re-organization and a commitment to doing things right. A commitment which, quite frankly, just hasn’t been there for a while.

Let’s get back to that value idea for a bit. As an automotive sales trainer, the absolute foundation of sales is this from Zig Ziglar: “Buying occurs when value exceeds price.” It’s that simple. Except that too many sales staff, sales managers, dealerships and manufacturers have bastardized their approach to getting value to exceed price by discounting and rebating first and building value either not at all or as a secondary strategy (i.e. “lookit all you’re getting for a dirt cheap price”).

Back in the day, someone at Chrysler (or their advertising agency) knew this and enlisted Iacocca’s active participation. He was the first of the CEO’s to pitch his own product and no one did it better than him until Chrysler tried to reprise the approach in 2006 with “Dr. Z”—Dieter Zetsche, the Chairman of DaimlerChrysler.

Domestic manufacturers have to first engineer and build value into the products that they’re going to offer to the public. This basic rule is one which hasn’t been done well enough or often enough over the course of the last 3 decades or more by the Detroit 3. Even then it will be hard to get customers to return to their products.

“We build value when we talk to customers about what’s relevant to them,” is the next maxim that I work to impress upon sales staff as a trainer. And, the only way to find out what is relevant is to ask questions. The manufacturers are going to have to ask potential customers some questions about the products they want to own and drive and then work like hell to engineer it, make it and market it.

And finally (bear in mind that this is all in the 1st 10 or 15 minutes of the basic sales training class) as I trainer I cover the ways in which value is built with customers: “We build value when we talk to the customer in terms of what we do more of, better than and differently than anyone else when it comes to ourselves, our dealership and our product.”

Here’s my point. Most organizations don’t train their staff to approach sales in this way and yet it’s the optimal way to do it. Most organizations put the emphasis on sales at the end of the line—after the product is made and delivered to the retailer (remember that’s when the sale is counted by the manufacturer).

Chrysler and GM have an onerous task ahead when it comes to the financial and legal ramifications of their bankruptcy filings. But when all is said and done they are companies which design, build and market vehicles. Ultimately they have to do that and do it well.

What if the Detroit 3 reversed the process? Take a page out of Tom Peters. Put the focus on determining what is relevant to customers about the vehicles they wish to own and drive. Be “more, better and different” than any of the competing automakers when it comes to focusing on and responding to the needs and wants of consumers. And then deliver it to the dealer-body ready to be sold to the American consumer.

As these companies work to emerge from bankruptcy, they are going to have to do things to re-instill faith and confidence from the buying public. Maybe this is the way to go about doing it. And then maybe Lee Iacocca can get his car back.