By David Graham

I love Costco.  I shop there all the time.  But one thing is for sure- you will never confuse a Costco with a Macy’s, a Whole Foods, or Best Buy.  Their business model is very simple.  They provide products to their customers at the lowest prices possible.  There is no flash to their stores, which are typically converted warehouses.  No salespeople are waiting to help you select a product.  They cut their margins razor-thin and rely on volume to drive their profits, selling super-sized packages of almost all their merchandise.  (I love the Family Guy episode where they sell 4-packs of pianos.)

My favorite feature of Costco, even more than the low prices, are the free samples.  You know what I am talking about- the little old ladies who set up stands and offer free bites of whatever food product they are peddling.  They are usually delicious, and I get angry old-lady stares when I go back for a second and third sample…but many times, I have purchased the product (usually in a 4-lb bag) based only on my sampling experience.  

I was pondering this phenomenon one day, thinking about how the sampling stands don’t seem to fit into Costco’s general theme.  But then I realized that because of the large size of their food packages, people are more hesitant to try new items.  And what better way to promote a product than to let them taste it?

Why doesn’t the college recruiting market do this?  Think about this- the investment that it takes to purchase a 4-lb bag of chicken tenders is about $10.00.  How much are companies investing in their entry-level hires?  I would say, at a bare minimum, $30,000 in salary- and that is not even considering benefits and training.  How can you afford to make this type of investment based on a piece of paper and a 30-minute meeting?

Companies will eventually realize that it makes sense to get a “free sample”.  Run a case competition.  Hire through your intern program.  Reduce the chance that you get the wrong person for the job.  It’s not always a free (or even cheap) option, but it sure beats making a $30,000 mistake.

This entry was posted on Friday, June 26th, 2009 at 6:02 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.