Augustin did not test out his assumptions. While he strongly believed in his strategy shift on pricing, it was heavily dependent on many assumptions that he did not prototype/experiment with to test if they were true beforehand. Augustin did not hesitate to dive straight into implementing his strategy, and his haste is something that led to him losing a lot of money. He unfortunately did not listen to the needs and behaviors of Emilia’s market users. Rather than basing his decisions on data and metrics that showcase how the users he is targeting typically choose and behave, Augustin went with his own ‘intuition’. This is an extremely faulty approach. Augustin had a strong idea / vision in his head; however, he ended up trying to push this idea onto his users because of how headstrong he was.
If Augustin had taken the extra time to craft prototypes and launch user experiments and/or interviews to explore how his market thinks, he would have realized the main reason why current users of Emilia love it: because of its discounts. Emilia’s affordability is a huge reason as to why it has so many loyal users; this knowledge would have helped Augustin when crafting a strategy shift on pricing. Augustin’s inflexibility eventually led to dire consequences—the loss of several million euros.
If I were to consult / advise Augustin, I would tell him to test. Augustin makes a lot of assumptions about his target users but does little to none to validate it. For example, he could launch a low-scale and low-cost test that emulates perhaps his “hablar claro” approach to a small population of users that fit in his target market. Augustin can gather specific data / metrics and formulate a game plan from there. After launching this experience prototype, it will likely become clear to Augustin that many of Emilia’s users find this approach condescending.
