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The Pandora Effect: How to Avoid Losing Customers

A couple years ago my wife asked me for a Pandora bracelet for Christmas. I was able to easily find the bracelet at a local jewelry store, and bought it along with several charms. It seemed that my wife’s request was the norm that year as we also purchased a bracelet or charms for my mom, sister-in-law and several of my wife’s friends.

The following year I ensured that I made a quick stop by our local jewelry store once again to buy more charms. My ritual, however, came to an abrupt halt this past year when I stopped by the local jeweler only to learn that Pandora had removed their bracelets and charms from several hundred jewelry stores across Canada and the United States with the only options remaining for purchase being online or through a Pandora registered dealer, typically only located in large city centers.

As I stood in our local jewelry store looking for something to substitute this year’s purchase, I witnessed employees in the store tell not one but five different patrons that they no longer sold Pandora during a span of fifteen minutes. In every situation the patron left the store in a huff. When I asked the employees how often this was happening, they said at least several dozen times each day for the past few weeks.

Think of the impact this has had on Pandora sales.

Now there’s no doubt that Pandora made these changes in support of improving or advancing their business model. Possibly they wanted better control over distribution or over their profitability, but at what cost?

My wife, for example, did attempt a purchase online (she shops a little earlier then I do!) and told me that a purchase she made online didn’t end up looking like she had thought it would. She will only purchase in store in the future, and there are no local retailers offering the product…

In addition, the jeweler I visited explained how upset they were with Pandora after they abruptly pulled their product from the retailer.

Here’s my point.

My guess is that you’ve got a corporate strategy set with several key objectives, all in favor of growing your revenue and market share while increasing the control over your operational costs. If so, how have you validated the direct and indirect influences these changes will have on your employees, customers, dealers, agents, or contractors?

The following questions are those that I typically include when helping organizations formulate action plans in support of their strategy, to ensure direct and indirect influences are completely understood and managed appropriately:

1. What are the direct and indirect influences of this objective? Consider your employees, existing and prospective customers, and existing brand and reputation.

2. Which of these influences are the positive versus negative? Sort into appropriately labeled columns.

3. For each positive influence, how can you capitalize? For each negative influence, how can you mitigate or avoid the risk of any negative outcome?

Obviously I’m not an employee or agent of Pandora, and nor is my intention to suggest that they didn’t make the best decision for their business at the time. I’m sure that any improvements they may have achieved as part of this business model change will see rapid decline as a result of the direct and indirect influences of their customers during this past Christmas season.

© Shawn Casemore 2017. All rights reserved.

 
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