Is Your Business About To Get Disrupted?
And you just don’t see it coming?
The evidence is all around us. The “era of disruption” has arrived. Is your business about to get disrupted?
Apple disrupted the music industry with the invention of the iPod and iTunes store. Amazon disrupted the book business. Legal Zoom disrupted the legal services business. Netflix disrupted the video business. And so on. And so on.
Indeed, disruption is all around us, hiding, lurking, ready to devour its next victim whole – that is, if the inattentive remain unaware.
The velocity of change in consumer consumption is driving evolution in every sector. And, forgive the platitude, but change does indeed breed opportunity.
As a marketing strategist and founder of a technology-driven hybrid-marketing agency, I find our best clients come to us when they begin to feel the very real pain these changes bring on. They see the writing on the wall, they recognize they need to change their perspective on their business, and they are motivated to look at new opportunities through a whole new prism and move forward. That means harnessing the powers of disruption for good, and disrupting their own undertaking before their competition does.
Often our first step is to undertake a comprehensive top-to-bottom brand review. We guide the client through a careful review of all the benefits that their product or service delivers to their customers. Then we ask them what additional services or products they should be delivering in response to specific targeted customer research results. Finally we brainstorm about what they “could” do for customers to solve their needs in a whole new way. Every idea goes on the table – the good, the bad, and downright ugly.
The especially important question we then ask of the client is: What “could” you do for the customers that your competitors simply cannot do because of cost, infrastructure, technology, corporate policy, or just plain lack of imagination.
We invite members from all the functional areas and all levels from within the organization to participate. It is surprising where the best game-changing ideas often come from.
Often, the most simple, revolutionary, and truly disruptive idea is often first met with an overwhelming chorus of “We can’t do that! It’s never been done before.” However, when prompted to view it from the customer’s perspective and assuming all things are equal, the team begins to see the light.
However the road from idea to implementation is often a rocky one and inevitably the business owner must summon the guts, gumption and green to make it happen. But when truly disruptive methods find their mark, competitors are often too far behind the game, too stuck in “that’s-the-way-it’s-always-been” to react before it’s too late. In the meantime, the disruptor has won customer after customer and deal after deal, sometimes recreating the business model within the category.
An example of disruption in practice can be found in the telecom business in our own city of Vancouver. Like most large cities, the local legacy cable company, whom we’ll call “Company A” offers a bundled service of cable television, internet, and home phone delivered via co-axial cable, at a price point of approximately $150 per month. The customer of Company A is responsible for purchasing their own HD receiver/PVR(s) (ranging from $250-$450 per unit). Additional terminal connections are extra. All other equipment, including digital television receiver is available on a monthly rental. The customer agrees to return the rented agreement upon cancellation of the account. There are no contracts.
Meanwhile, “Company B,” a telephone telecommunications company entered the marketplace in just the past few years with a broadband television technology –and the same bundle of services – but with a whole new disruptive philosophy.
Company B asked themselves, “What can we do that Company A cannot, will not, or is unable to do?” The answer was to leverage their technology and provide an array of solutions that had never been offered before, at a compelling price point (around $120 per month), and addressing key issues that have driven Company A’s customers absolutely crazy for years.
Company B turned the existing game rules upside down by:
- Building their offering on the technical advantage that their bandwidth does not peak and crater like coaxial cable-delivered internet.
- Providing as many additional components at no cost or with no cash outlay: Not one but two free set-top receiver/PVR boxes, both of which can be controlled and accessed from the other. Providing free phone and internet modem.
- Including free installation from top to bottom, and basic home network computer and routing set-up and troubleshooting. Eureka!
- No caps on internet usage (a real issue in Canada)
- Enacting a customer service policy where the answer is always “yes.”
And finally when the value of the total package and discount incentives were just too good for any right-minded prospective customer to refuse, Company B asked what used to be a dirty question in the industry:
“Given this incredible package value we are delivering for you, will you sign for us for three years under very favorable terms, so that we can justify underwriting the value of all of this equipment and service to you?”
The answer nine times out of ten is an absolute “yes!”
Company B disrupted the local industry. They changed the rules of what was doable and they did it. Now, every day, Company A is losing hundreds of customers to Company B. But Company A is too big, too bureaucratic, and has too much invested in its existing technical infrastructure to want or be able to react to the disruption. And their market leadership is ebbing away day-by-day.
Disruption. It’s the new name of the competitive game.
Are you bold enough to be disruptive too? Or will your business be disrupted by another?
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