In my travels and meetings with company executives one thing has been standing out in the majority of these discussions. I’m being asked, “Why is it that everyone in my industry is starting to look and act the same and the customer is seeing us as one big non-differentiated group of companies?” What does this mean? Remember the old story of “boiling the frog?” You know, the one where the frog was put in a pot of water and if the temperature was turned up slowly the frog didn’t notice it and react and as such, boiled to death. But when the temperature was turned up all at once, the frog noticed it and jumped out of the pan to safety. Companies and their customers are like the frogs.
Take the cell phone wireless communication industry as an example. For the past several years, it has been a dog-eat-dog world out there. One day Verizon will come along with a new phone and then Sprint will match it and soon after that AT&T will announce their new Apple iPhone and capture the market by storm. All this means is that by constantly matching or slightly exceeding their competition the customer will be “trained” by all these companies to feel like the service is ubiquitous and there isn’t really much difference, if any, between the major carriers. While this may be true to some degree, there are distinct differences that exist among them all – but no one is noticing. Why?
Simple. The customer has been lulled into believing they are basically all the same with the same service, basically the same phones, pretty similar plans and on and on and on. There is so much “noise” being created out there by the big 3 that no one is really listening. No one is really evaluating these three for what they offer and the customer thus doesn’t see a lot of differences between them. So when there is little observable difference between your competition, you are basically a “commodity” whether you like it or not. Only two ways to play the commodity game – be the lowest priced commodity or “change the game.”
Continuing with our telecom example, most people today make their buying decision (other than sophisticated high usage business customers) based on the phone. How cool it looks, how many people have it, its style, color, etc. – not based on the key factors the company offers nor the experience they are going to get by being a customer. Then, after they have made their decision and signed a two year contract, they find out all the other factors, including how much the customer experience really matters.
So what does all this have to do with “Shock Therapy?” Simple. “Shock Therapy” is basically a term used in business that says if you want to separate yourself from the pack and the rest of your competition, you need to do something that makes you stand out from the crowd. And no, introducing a new phone isn’t what we are talking about. What we would be talking about would be things like “no more termination charges,” or “no more two year contracts,” or “a guaranteed accurate bill,” for example. And above all this they offer a truly great customer experience from the time you made your purchase decision, through technical support and post sales support. Now that would be so unique that the customers of all their competitors would stand up and take notice, right?
You are probably asking yourself, “Why don’t they do that and stand apart from the others?” Again, simple answer – fear of losing their customers. In the telcom example, they would be afraid they would lose a number of customers that were waiting to leave but couldn’t because of contractual obligations. But what they don’t realize is what you lose on the front end, you will more than make up on the back end because you will also be stealing customers from your competitors. If you were able to create the proper messaging around this and deliver on these “shock value” items, you could distance yourself from any competitor and build longer, more trusted and loyal relationships with your customers – thus annihilating your competition. You would be a leader, not a “me too” or a follower. You would be the creator of a new model in an existing space, viewed as innovative, creative and willing to make changes based on what your customer wants.
This is what every company should realize and strive for as they analyze whether they need to elicit some “shock therapy” of their own given their competitive position in their industry. This is the time to create “disruptive” and “radical” change in your industry and take a leadership role and out distance yourself from your competitors. Don’t think you can’t do it – there are plenty of examples of household name companies that changed the game in a disruptive way and took a leadership role in their industries. Companies like Google, Starbucks, Amazon, Southwest Airlines, Nordstrom, Expedia and a host of others. They are the leaders and they did it by jumping out of the pan and creating some “shock therapy” for their customers to see and experience. And, of course, backed it up with a great customer experience and great messaging about what they have done to differentiate themselves from their competitors.
So you get to make the choice for your own future. What will it be – stay in the pan and fry like the rest of the pack or jump up and say, “I am going to be the leader in my field and change the game for my customers.” Your choice, but when the “R” word starts to pop up everywhere, where do you want to be – in the pan or out of the pan. That is the question and those that jump out will never look back. So take a chance, create some “shock therapy” of your own and start being a leader and not a follower – or worse, another dead frog in the pan.
Blaine Millet
