March 17, 2010

Barriers to ENTRY or Barriers to EXIT?

The Business 101 Strategy Building discipline focuses on erecting barriers to competitive entry. This doctrine doesn’t go far enough and it certainly doesn’t create a BE DiFFERENT position for your organization.

Here are the issues I have with this traditional approach:

- its not DiFFERENT; everyone follows this very common method of strategic analysis.
- it tends to be rooted in a more theoretical perspective and lacks the dimension of showing people how to do it.
- while everyone is spending time trying to keep the competition out, not enough attention is given to the existing base of customers.
- it diverts attention away from investing in value based Offers for the existing customer base.
- its futile; you will never keep a hungry competitor out or restrict its natural market activities.
- it tends to focus on artificial non-market tactics to prevent more competition such as regulation and law rather than beating them with better customer value.
- it represses customer obsession in favor of dealing with non-market factors.
- it creates the illusion that competition can be restricted.
- it spawns an unhealthy culture that is preoccupied with preventing market activity rather than doing whatever is required to beat the competition in the trenches where the customers are.
- its a waste of valuable resources with an outcome that is inevitable. The telecom industry spend an enormous amount of money trying to prevent competitive entry into traditional monopoly markets through a time consuming and expensive regulatory process. The competitive tsunami wasn’t deterred, however, and they should have been paying more attention to creating better customer service and a marketing engine that provided compelling and unique value.

I am not suggesting that you shouldn’t pay attention to the competition, existing and potential. But don’t get obsessed about preventing them from doing what is reasonable given free market conditions. If they have an opportunity with your customers, expect them to make a play and respond by shielding your loyal customers from the onslaught of their competitive value proposition.

If you feel that a certain non-market response is necessary, go ahead and do it. But don’t let it be all-consuming. Don’t let it gobble up all of your resources. And don’t let it drain the effort in executing a customer response to the threat.

Observe your competitors; ACT for your customers.

BE DiFFERENT. Make it so difficult for your competition to attract your customers away from you - by providing them with constant unmatched VALUE - they will be frustrated and will have to endure so much pain, they will decide its not worth it. And they will retreat.

Create barriers to customer exit. The BE DiFFERENT way.

Cheers, Roy Osing

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Posted 3.17.10 at 08:40 am by Roy Osing | Permalink | Comments (0)

March 14, 2010

Invest in New Customers or Existing Ones?

On a recent radio interview I was asked: “Do you think businesses spend too much money on trying to get new customers and not enough on keeping the customers they currently have?”

My answer: ABSOLUTELY! Most marketing efforts that I observe are dedicated to growth prospects which typically translate into acquiring new customers. Nothing wrong with this, but it leaves a huge vulnerability in your current customer base which may very well be viewed by your competitors as THEIR growth opportunity. Organizations ignore their current customers at their own peril.

Its perverse logic really. It requires substantial more investment to get a new customer than keep an existing one and the economic returns are higher as well. But I guess its not as sexy.

Growth, however can come from customer loyalty investments. Here are six BE DiFFERENT ideas:
1. Market more solutions to your existing customers. Show them additional value they can get from you and make it easy for them to get it.
2. Sell your line of Value based solutions to customers where your Customer Share position relative to you competition is low. Grow your share position at the expense of ‘the bad guys’.
3. Perhaps some of your Offers are priced below the value they provide and where you have indications that price-demand is relatively inelastic . In these cases consider increasing prices.
4. Create new Offers for you current customers. Discover new problems they have that can be solved bu you in a way no other competitor can.
5. For every new customer gained, repeat the above steps.
6. For your most influential customers, step up the service levels you provide them. Get them talking about you to others. Force viral marketing to happen so additional demand starts knocking at your door.

At the end of the day, the BE DiFFERENT approach I suggest is to leverage your existing customer base to grow your business. Not only does it work by using the trust relationships you have already invested heavily to maintain, it will point to new customer possibilities that have already been qualified.

Give it a try. You have nothing to lose, and growth to gain.

Cheers, Roy
Remember to follow me on Twitter

Posted 3.14.10 at 08:35 am by Roy Osing | Permalink | Comments (0)

March 11, 2010

The 360 degree Zone of Performance Feedback

I am an absolute Zealot about the 360 Degree Feedback method of Performance Management. 360 Feedback is not a new tool, but in my experience it is one of the most effective methods of assessing how you perform your responsibilities, and what you need to do to improve.

And it works for all sizes of business and not-for-profits.

I break Performance Management down into two components:

- Performance Evaluation: the assessment of HOW you do your job: your behaviors and competencies, how others perceive you, your listening, planning, and goal-setting skills and other dimensions such as teamwork, character, and leadership effectiveness.
- Performance Development: determining the things you need to do to improve your performance in the future.

For Performance Evaluation, 360 Feedback provides a view of your performance not only from your boss, but also from your peers and others in the organization that ‘touch’ you on a regular basis.

In my experience your peers provide the most honest appraisal of how you perform your responsibilities; next on the ‘honest scale’ are your colleagues and the least is your boss. Its not that your boss is incompetent, its just that they don’t get to see you every day doing your thing like others do. In addition your boss may be seeing your behavior through rose colored glasses, but your peers aren’t. And they are not shy about giving you the feedback you need to hear.

For Performance Development, 360 Feedback provides a multi-dimensional view of what improvements are needed. Dysfunctional behaviors are identified - with no holds barred - along with specific strengths and other weaknesses that need to be addressed.

To get the most personal payback from 360 Feedback, consider this BE DiFFERENT action plan:
- make your target audience as robust as possible and thank them for helping you.
- In addition to your direct boss, include their colleagues in your feedback list.
- ask all your peers.
- select other key individuals in the organization that are impacted by your work. I always included frontline people in order to see how well I was supporting them.
- ask for feedback every six months.
- communicate your results to your feedback audience. You may find this uncomfortable, but it is an expression of confidence and leadership people will notice and not forget.
- build a Feedback Action Plan to address address your shortfalls and continue to strengthen what you do well.
- communicate your action plan to your feedback audience. Make sure they all know what you intend to do to improve your results.

Cheers, Roy
Remember to follow me on Twitter
Do the BE DiFFERENT Quiz

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Posted 3.11.10 at 08:00 am by Roy Osing | Permalink | Comments (0)

March 8, 2010

Can a Customer Create their own Dazzling Service Experience?

BE DiFFERENT or be dead outlines the philosophy of serving customers with the objective of dazzling them and gaining their loyalty.

It occurs to me, however, that there are some things that we, as customer, can do to promote and encourage our own service treatment that will dazzle us. So just maybe we can control our own service experience destiny.

In no particular order of priority, try these things and see what happens:
- engage with the server. Instead of taking the ‘ugly customer’ position where you are expecting great treatment, assume the ‘equal’ position and have a friendly one-on-one conversation with them.
- don’t demand things, ask for them. Demanding something in an authority position may get you something that you don’t expect!
- notice their name, remember it and use it. But PLEASE do it with a ‘I like you’ flavor.
- get to know something about them to show that you care about them as a human being. Learn a ‘secret’ about them and rainse it in conversation.
- help them serve you. For example, arrange the table when your food comes and hand them glasses that you don’t want. Don’t sit there in your authoritative perch and watch them struggle to take care of you.
- what you put out, comes back (‘The Secret’, remember?). In the service world this rings true because of the human interaction intensity. Treat people with kindness and respect and MAYBE, just MAYBE you will get the same treatment back.
- tip generously for dazzling service. The Tip is a medium of communication, and if you want a repeat performance show that you are delighted… with your wallet.

There you go. Your behavior as a customer CAN make a difference to architect a dazzling experience. It won’t work every time, but even one in five still makes it worthwhile doesn’t it?

Cheers, Roy

Remember to follow me on Twitter

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Posted 3.8.10 at 08:16 am by Roy Osing | Permalink | Comments (0)