Today I had the bad surprise of finding a flat tyre on my car. It pissed me off quite a bit because it’s saturday and me and my wife were supposed to drive to a few shopping places this afternoon: my replacement tyre is a provisional one, you’re supposed to use it just to drive to the near tyre shop to have it replaced, so our weekend seemed to be totally ruined.
While driving back home I passed by a tyre shop. It was well after 1PM, and the sign at the entrance stated they were indeed open on saturdays, but only up to 12. I drove inside just to have a look, and found out they were still open: a pleasant guy welcomed me and told me they could have fixed it in a few minutes. Well, not only they did, but when they finished they didn’t want any money: they were about to close the shop, the accountants weren’t there and “the work wasn’t worth the fuss”: they just invited me to come back when I’ll need to perform maintenance on my tires. Now, of course not only I will now and forever be a loyal customer of that station, but of course I will suggest those guys to everyone needing assistance (they don’t have an Internet site, so I can’t link directly to them, but if you happen to have a tyre issue in the Desio area, check out the “Centro gomme brianzolo”). However, there is more to that than just a flat tyre.
Since this afternoon I just can’t stop thinking about this guy and how he managed to have more marketing sense than a whole bunch of MBA-graded CMOs. What they did cost them little or nothing: with the right tools and the required experience, fixing a tyre is really just a matter of ten minutes or so, doesn’t require any consumables and doesn’t wear the machinery. However, the value to me was much bigger: they could have extorded me a generous amount of money and still see me leaving with a smile on my face. By solving my problem for free, they won a new loyal customer and, even more important, a nice word of mouth effect.
The real point of this story, though, is that I don’t think I have been the objective of a sound marketing strategy: I just think that those guys have been honest and that their business is driven by costs rather than by values: it costed them very little to help me out and they didn’t feel like exploiting the situation. This isn’t what happens in the traditional computer industry, where price tags are based on perceived customer values rather than on the real costs of the business: the old story of a computer technician asking 1000$ for hitting a computer with a hammer and splitting up the bill in 1$ for the hammer job and 999$ for being the only one knowing where to hit the machine has always been the meme in the IT pricing industry.
Now, I’m not saying that competence (and the associated costs to attain it) shouldn’t be considered in a pricing model, but I definitely do feel that there are quite a few business in the IT industry that are leveraging a dominant position and providing a pricing model for services based on lock in strategies (“dear customer, you can’t go anywhere else”) and perceived values (“no matter how much it costs, I’ll get from you as much as you are able/willing/forced to pay”).
Enter Open Source: lock-in is, at least in theory, a non-issue, and the pricing model has to be derived on costs rather than on values, since your competitor will be able to get a better quote to your customer. The healthy competition in the Open Source market has the nice side effect of promoting honesty as a value that can be part of the negotiation again: this is of course what would happen just in the ideal world, but still it’s worth considering. Not to mention that honesty has to be part of your DNA if you happen to be part of an active Open Source community (and if you’re serious about Open Source, you just have to): everyone is friendly and trusts you, but try to misbehave and you will be nailed.
I might also arrive to say that the availability of Open Source software has a parallel with the guy fixing my tyre for free and winning myself as a permanent customer in exchange: yeah, I’m stretching it to the limit, but I still feel that there is something in common. It feels good to imagine that honesty, cluefulness and competence can be key drivers again and a foundation for a business model in the software services industry: I’m sure this can be one of the reasons of success of Open Source and it will pay off in the end. And hey, if I’m wrong I can always apply for a job at the tyre shop!