I was reading the Wall Street Journal earlier and saw a report on McCormick’s earnings call.
Spices.
Why am I paying attention?
I use their products. But really, the company is from Baltimore: a local story.
Three moments stood out to me:
- “Consumers are incredibly conscious of value”
- McCormick will work to “optimize” the product line.
- They will use “price and promotion” to drive sales.
Because each of these phrases is a decision. One that releases the pressure the CEO is feeling.
A flinch.
Earnings calls are a tell. The CEO sets the frame for the Expectations Market.
But the market is setting the strategy.
Not the CEO.
The tail wagging the dog.
You’ve made the same three decisions on a call. Maybe different words. But the same three flinches.
“Value conscious.”
This sounds like the CEO knows the customer.
But the customer is always “value conscious.”
“Value conscious” isn’t a market condition. It is a mirror. The mirror shows a company that has lost the balance between price and value that drives competitive markets.
Too little. Too late.
A customer-focused CEO wouldn’t say these words. The customer-focused CEO would always focus on delivering value for money.
Your plans would always be forward-looking. So you’d always be aware of the relationship between value and spend that customers make.
The plan would always be in motion. Because customers are always “incredibly value conscious.”
“Value conscious” is what you say when you’ve stopped listening to the customer.
“Optimize”
This is a buzzword that screams, “We are data-led.”
But…it’s a flinch.
Data is always perfect. Because it already happened. You can’t change the past. So the data doesn’t lie.
Optimize is coded language for looking backward, using the past to “predict” the future, but the future doesn’t cooperate.
The past never looks exactly like the future.
“Optimize” is the word you use to avoid betting on your strategy.
“Price and promotion.”
This is often the easiest way to signal, “Hey, we hear you. We are as concerned as you are. We are doing something.”
Price-led promotions are the easiest way to undermine your brand.
When you start discounting, you don’t stop.
You lie to yourself and say, “That’s the last discount I’m giving them.”
You don’t mean it, though.
It’s a flinch.
A discount or a price promotion releases the pressure of understanding the customer and making them an offer that reflects their desires, their situation.
And every price promotion teaches the customer to wait. The prices aren’t real. They are just a starting point.
Value Conscious. Optimize. Price and promotion…are three flinches. They undermine The Standard, focused growth, and pricing power.
“Value conscious” is a tell that you aren’t setting the standard.
“Value conscious” is a flinch. You lost touch with your customers. You drifted.
When you say this term, it isn’t an accident. You’ve fallen behind the market.
The Standard happens when you are side-by-side with the customer. Not behind them.
“Optimize” undermines focused growth.
You can’t focus if you are optimizing. The data is pulling you in different, contradictory directions.
Focus is a decision about what matters.
Optimization is a delay of the decision.
“Price and promotion” undermine pricing power.
Every discount is a signal that the price was wrong. Every discount is a signal that you don’t believe in the value of your product.
Every one of these words shows a business that is out of touch with the market.
Chasing. Not leading.
My challenge to you:
Pull the transcript of your last earnings call. Look at your last deck. The notes from before your last sales call.
Now, circle every time “value conscious,” “optimize,” or “price and promotion” show up.
Count them.
That count is your flinch count. It is the distance between you and The Standard.
Pick one flinch.
Make the decision to change…now.
Put it in writing.
The Strategic Drift Diagnostic is a mirror. 5 questions. 5 minutes.
If you are on track…it will tell you. If you aren’t on track…it will tell you.
Hit reply and tell me which flinch you are stuck in.
Dave