If you’re like many Business Owners and Leaders you probably feel pretty good about the position you hold in your market…so did the taxi cab companies and drivers before Uber became a reality. Now they are scrambling and trying to find a way to survive…even to the point of trying to get political help in different cities to stay afloat.
Disruption and Commoditization have impacted virtually every industry today. There probably isn’t a single industry that hasn’t been impacted by a disruptive organization entering their market and stealing some of their market share. Uber is an excellent example but there are many others that have been equally disruptive. Companies such as LegalZoom have taken billions of dollars away from attorneys over the past several years. They captured and disrupted a document and transaction-based business and turned it into a commodity by substantially lowering the pricing of document preparation…impacting attorneys all over the country.
Amazon was an early disruptor to the entire book business…taking significant market share away from Barnes and Noble and Borders who were recognized giants in the book industry. And we certainly can’t forget about Blockbuster’s demise when Netflix entered the market. They were the unquestioned dominant leader in video rental and were virtually replaced overnight by an unknown company with a new disruptive business model that matched the needs of customers at substantial savings.
Even though these examples are in completely different industries there is one common thread that runs through all of them…they didn’t believe anyone could disrupt their dominance in their market. While it’s awesome to believe in your product or service, it’s dangerous to think there isn’t someone waiting in the wings to take away your position. Unlike any other time in history, we are now seeing new companies coming into traditional industries from many unrelated areas and establishing a disruptive model and capturing significant market share. This trend is only going to continue now that it has shown massive success over the past few years.
So what can you do, as the leader of your business, to either avoid or minimize the impact of this potential disruption?
While commoditization is difficult to combat with products and services over a long period of time, there is at least one alternative that appears to withstand the test of time and delivers differentiation in the market…your CUSTOMER EXPERIENCE.
It is difficult to continually come up with new products and services to satisfy the ravenous appetite customers have today. Just when you think you have the best and leading edge product or newest service, someone comes in and “one-ups” you and takes away the leading spot. While you might remain there for some period of time, it is difficult to remain at the top for extended periods of time. Apple is one of the few that has been successful at this…but it took them many years of living in the shadow of Microsoft and others before they became the dominant leader. Today, Microsoft is in this unenviable position and trying to fight their way back to the top…especially in the race for the Cloud.
But these are behemoth companies…not the SMB market. They can throw billions of dollars at innovation and products and hope they find a winner. The small and mid-sized business (SMB) can’t be this frivolous with their cash and making too many product/service mistakes can wipe out a business before anything comes to fruition. The proven alternative to this madness is to focus on the ONE THING that is completely in their control to design and deliver…their CUSTOMER EXPERIENCE.
Customer Experience has both short and long term advantages. It is something that can be created and implemented within the year but last for many decades to come when implemented properly. And by properly I’m not talking about telling all your employees they need to be nicer to the customer…that never works for the long term…every company can be nice to their customers if they try. This isn’t the answer…this isn’t the differentiator…but it’s on the right track.
Creating a customized CUSTOMER JOURNEY that is built upon a very well defined Customer Experience Process (something we call Customer Experience Mapping) is what allows companies to reap these rewards for many years into the future. Think Disney…they created “the happiest place on earth” and continue to deliver this experience year after year after year. This didn’t happen by holding a meeting and telling all their employees and characters to be nicer to their guests…it happened because they have a very well defined Customer Journey that is built on a foundation of a well-designed and executed Customer Experience.
Nordstrom did the same thing many decades ago. They started selling shoes…then clothing…all at high prices. But they started with a very distinct process inside the organization for delivering an incredible customer experience day in and day out. Zappos followed this same model…sold shoes…one of the ultimate commodities in the clothing industry…and they dominate today. They don’t give discounts and silly things like “one day only” sales (every day)…they simply deliver a remarkable Customer Experience to every customer every day…and their customers love to buy from Zappos. And it has worked out pretty well when you consider they went from zero to over $1 Billion in revenues in less than 10 years and were sold to Amazon for more than a billion dollars. Not a bad model if you ask me.
One way to avoid being COMMODITIZED and losing customers is to design something even new entrants can’t copy…the experience you offer. If your Customer Experience is so incredibly amazing and remarkable…WOW…every single day with every interaction, this creates immediate differentiation and a long tail of success. It is the ultimate weapon against commoditization or even new entrants into a market. For a new disruptive entrant to take away market share they would need to be so much better and cheaper than anything you offered…which is difficult to do today.
And for those of you that are saying to yourself right now, “Yea but we’re different, we do a good quality job and treat our customers well so we aren’t at risk,” I would offer you some instant advice…take the blinders off and get real with looking at your business. This is living in a fantasy world…this isn’t looking at your company from the eyes of your customer…they are seeing something very different. And if someone came into your market today and offered a completely different (and awesome) experience to your customers at or below your price they would be gone in a heartbeat.
Achieving long-term dominance doesn’t happen by “being nicer to your customers” and thinking you have created differentiation…you haven’t. Being CUSTOMER OBSESSED and creating a process based CUSTOMER JOURNEY that has a well laid out and documented CUSTOMER EXPERIENCE PROCESS at the heart of it is what will help you avoid being “Uberized.” This strategy gives you differentiation, uniqueness, and a special place in your customers heart and mind…it gives you the “long tail” of success.
I would strongly and passionately encourage you to learn more about why and how this is completely different than what you are probably doing today. If there was ONE THING TO FOCUS ON IN 2017 it would be to create a strategy based around a well-planned Customer Journey which incorporated an incredibly awesome Customer Experience by Mapping out all the experiences your customer will receive when they interact with your business (there are usually over 20 for most companies in the SMB market). If this is of interest and you want to learn more, let’s grab coffee and I can share how some of the best companies in the world have followed this path…for decades…and still dominate in their industries. I think you will find it a fascinating discussion…
