Measure twice, cut once … asking the right questions can save a lot of drama

In March 2001 when Amazon was still a pup and people were still buying books the old-fashioned way, I joined Angus & Robertson as National Marketing Manager. It was Australia’s oldest bookseller – a brand that was almost 120 years old which returned a healthy annual profit to its owners and boasted an extremely loyal customer base.

I had my first job interview in the newly opened in-store café at the Westfield Burwood store. The MD was extremely excited about the café’s which had been opened in about a dozen stores over the preceding six months.

I got there early so I could scout the place. The café was circular in design and located in the geographical centre of the store. It couldn’t be seen from the mall and was completely unannounced except for a A-Frame sign squeezed inside the retail tenancy line near the store entrance. Customers were navigating around tables to get from one section of the store to the other or to take a short-cut to the service counter. One lady caught her bag on a chair and almost tripped.

It was nearing lunchtime and I noticed only one table was occupied. My experience with food service was limited to the time I spent as a waiter at university so I had no formal experience in F&B management but I had spent enough time in retail to know that the three staff serving a solitary customer wouldn’t come close to meeting sales per square metre or sales per employee benchmarks.

A few months later, in one of my first weekly management team meetings, it was announced that the café’s were under-performing. I had a few ideas about how we could increase their profile and stimulate sales and asked if I could take a look at any background materials or research that was done in the lead up to the first fit-out.

“We didn’t do much research at all, we just thought it was a good idea,” I was told. “It works well in the US and Europe and no-one else was doing it in Australia so we thought we’d get in first”.

Further investigation revealed a very basic exit survey undertaken at a handful of stores using a tiny sample which centred on one question: Do you think a café inside a bookstore is a good idea? Yes or No.

There are a stack of other questions that should’ve been asked but I would have settled for a simple follow up: If we went ahead and opened one, would you ever use it?

Complimentary beer at major sporting events is a cracking idea. I’d say yes to that if I was asked. Is it practical, affordable, achievable? Not in my lifetime.

Despite the best efforts of Operations, Leasing and Marketing we couldn’t increase patronage or profitability. The cafe’s were neither a destination, a convenience offer nor a value-add. Within a year they were all closed.

It turns out that being a great book retailer doesn’t mean you’ll make a great restaurateur.

Henry Ford once famously said, “If I asked the people what they wanted they would have asked for faster horses”. I would argue that the answer actually has a lot to do with how the question is phrased (detail, context etc) and the manner in which it is asked.

I’m all for innovation, being first to market, establishing a point of difference and I’m especially for creating strong, profitable businesses but, while gut feel is always a critical ingredient to any good business decision, the most critical element that must be proved is whether there’s actually a demand for what you’re offering.

‘Build it and they will come’ is a line from a Kevin Costner movie, not a business strategy.

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2017-03-24T04:26:51+00:00 January 30th, 2017|Categories: Business Strategy|0 Comments