Love this saucey tale
Years ago a leading brand of hot sauce was experiencing a drop in sales. They had a great market share and their margins were fine but the product was lagging on the sales side.
The CEO called in marketing, sales, accounting, and product formulation to determine the problem. "Let's do market research." said the VP of Marketing. "It's not the product mix." cried the formulator. "Sales is doing their part, but we could always increase the spiff," they said. "The numbers don't lie," moaned accounting. "I don't care who did what. I just want the problem fixed." demanded the CEO.
The management teams quickly set to work to determine the problem. Weeks passed and many a dollar was spent on trying to solve the issue. To make matters worse, news of their diminishing sales reached the press, and it was spreading throughout the world. The CEO was in a panic.
One day, unexpectedly, someone stopped in to see him about this sales issue. In the CEO's office, the man explained he knew what the problem was, but he would not let them know how to solve it until they worked out a compensation schedule.
The CEO agreed to all the man's conditions, and called an executive management meeting for early the next morning. Everyone was eagerly waiting for the meeting to begin as the mysterious visitor with the plan took the stage. He began by saying that he was a lifelong customer of Brand X hot sauce. He said he read that the company was having financial issues and immediately knew what the problem was. The audience of management and executives grew more anxious as he continued his speech.
"And now, ladies and gentlemen," said the man with the plan, "I'm here to tell you that the way to increase your sales is to make your hole bigger."
All the executives were stunned and dumbfounded. No one knew what he meant.
He continued, "For years I have had no issues with using your fine sauce, but a few months ago I noticed your product was harder to get out of the bottle. After repeatedly shaking the bottle, only a few drops came out. Thinking it was clogged, I examined the hole and found it to be remarkably smaller then the previous bottle I had. Taking a pair of scissors, I made the hole bigger and more sauce came out. When I saw your dilemma in the paper, I laughed and figured many other people must be having the same issue I had of not being able to get the product out of the bottle. So, I encourage you to make your hole bigger. This will allow more sauce to come out, your consumers to use more sauce in fewer shakes and with less frustration, and customers will buy more product more frequently!"
The CEO, execs and management were shocked! Several months previous to this, they had changed the diameter of the hole as a cost savings initiative. No one imagined that decreasing the size of the hole would consequently decrease sales. The company caused its own problem. Their management was too close to see the proper solution, and could not get out of their own way. That same day, the company resumed its original hole size and eventually their sales resumed to their previous levels.
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