Jeff Hoffman, a Priceline executive, argues that companies should market to what customers actually want, not what they do. He uses examples from NSYNC's record store decline and Priceline's travel business to show how focusing on intent rather than activity drives real growth.
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Market to intent, not activity. I want to explain how I learned that as well and what that means. I'll wrap up in a few minutes so we have some Q&A time. Everybody markets to activity. Here's the story of the day that I learned that. I told you we were doing these music tours. I was on tour then with NSYNC. We were in New York City. They were in Times Square. They were going to make an appearance in what then was the world's largest music store. NSYNC at the time and Justin Timberlake were the world's largest band. At that moment, they were actually the biggest-spelling Biggest selling band in the entire world right then. So when we got to Times Square, total chaos. So we were at this world's biggest music store, and they had to bring in security, so we had time, and we were sitting there. The owners of the world's biggest music chain, because it was NSYNC, flew in from London. I am sitting there in a music store, and I'm talking to these people in the music biz. And something had come out, and I was asking them, why do people do business with you? What do they come to you for? The question you need to be asking. What do people come to me for? You know what he said? People come to us to buy CDs. I was like, no one wants a CD. And he said, yeah, people come to us to buy CDs. I said, no one wants a CD. No one— he said, are you crazy? We sell millions of CDs. I said, that's the activity, not the intent. He said, what are you talking about? I said, no one's intent was to drive to a store, walk down the aisle, and go home with a round piece of plastic. And he's like, I'm still— still don't get it. And by the way, those same people One day this thing was invented. And I was talking to the top executives— hang on one sec— at every major record label. And I said, did you see this MP3? And they said, Jeff, we're not really interested in what you and your nerd friends are doing. We're cool, hip music people. I said, you should look at this. And they said, we're cool, hip music people. We don't care what an MP, whatever you called it, nerd thing was. What happened, guys? Because they failed to understand intent. The music industry failed to invent the iPod. They failed to invent the iTunes. They lost billions of dollars and thousands of jobs, and all those record stores are gone because the activity was buy a CD. The intent was hear a song. So let me ask you this. If you thought that your company existed to get a song in my ear as fast as you can, would you have thought about your business differently Than if you thought your job was to sell me CDs. They were buying carpets and shelves and lighting, and they missed the whole thing. In our business, by the way, people weren't— I went back to my own company and said, what do we— why do people come to us? What do we sell? And they said, they come here when they want to buy— when they need a hotel room. I was like, holy crap, no one— or an airline ticket. No one wants an airline ticket. And they're like, Jeff, have you lost it? People come to our website every day and buy airline tickets. And I said, yet nobody wants one. And they're like, so what do they want? I said, when they wake up in the morning, no one's wishing they could go to the airport and fly somewhere. All they wanna do is go to their sister's wedding. So we changed our whole approach to stressed about your sister's wedding, your nephew's graduation, we got your back. We'll get you there. I want you to think about what is the intent. The intent is to hear a song. The activity is to buy a CD. Stop marketing CDs and stop selling airline tickets. In fact, stop selling travel. Nobody actually says the travel part is the part they want. What they want is memories with their friends, right? If you are selling a memory that your family and friends will never forget, that's what they're— that's their intent. They didn't go on this trip for the sake of paying you for airline tickets. They went because they wanted family bonding. Sell intent. I think this is the— let me just check. Yeah, second to last thing I have here. Focus on operational excellence. Here's what I want to explain to you here. When you start building your companies, these last 2 are as you guys start to build a company and grow. When you start building your companies, it is so easy to be distracted, but I want to share with you a story of how I learned this lesson. At the time, of how this works. At the time, I was giving a talk with a guy named Jim who had a small flower agency in New York, a florist. In New York, there were 24,000 FTD florists. Registered florists. Sorry, 25,000. His volume was about 24,000. He was one tiny little flower store, 24,000 out of 25,000. Today, his company, which is called 800 Flowers, is the world's largest volume shipper of flowers. My question was, Jim, how did you get there? He said, Jeff, check this out. Come to our plant. So I went back to where they work. On the wall is written, sell more flowers. So I want to ask you this. What is the transaction that makes you scale? What has to happen? You know what ours is? We need to get a head on a pillow in a hotel room. So until a head hits a pillow somewhere in a hotel room, we've done nothing that matters. It's the only thing that matters. The only thing that matters to him is sell more flowers. It's written all over the walls. He said, watch this. We stopped somebody in the hall. He said, what are you doing right now? And she told him. And he said, tell me how that sells more flowers. And she has 2 choices. You can explain how what you're doing right now helps sell more flowers or put it down and do something else. Here was my favorite part. We went into the garage and he said, check this out, Jeff. There was delivery vehicles and there was a mechanic on one of those rolling boards, all greasy, under a truck. And he said, George, what are you doing right now? And he elbows me, watch this. Written on the wall of the garage it says, sell more flowers. Every day all they think about is, what am I doing today to sell more flowers? Stop doing everything else.
Right.
And the mechanic says, the mechanic says, well, I'm installing these fuel filters. He said, how does that sell more flowers? And he said, I did this research. And he said, because I was thinking about the wall, sell more flowers, I found fuel filters. They save $13 in every tank of gas. He said, they cost $5, so I bought them. I'm putting them on. That left $8 left over. I went to the CFO and put $4 in the bottom line, but I took the other $4 I made these $4 off flower delivery coupons and gave them to our sales team. He said, I'm pretty sure that $4 off flower delivery will move the needle to sell more flowers. Guys, that is brilliance. So if you go to any of my offices in any of my companies, not only does it say sell more flowers, but people will come up to me and say, Jeff, I got an idea. And I will say, when I'm doing travel, if it's not an idea to get more butts in beds, call me next year. Right? When I was doing music, if you came up to me and said, Jeff, I want to talk about something, I would have said to you, if you don't have an idea to fill all the seats at Friday night's concert, I'll see you next year. Stay focused by writing down the goals and questioning all the time everybody involved, what are you doing right now and how does it sell more flowers, and stop doing everything you can't answer.
