Category Archives: Competitor Insight

Is it possible to compete with Amazon and win?

hurbert_joly_fired_up

For businesses everywhere, this is becoming an increasingly relevant question.

Not long ago most business could just ignore Amazon and say to themselves that’s fine for them in retail they are not operating in our industry.

Well, times are changing, and Amazon is competing in not only retail but consumer electronics, entertainment, enterprise cloud services and is eyeing opportunities in healthcare and payments.

The question for all businesses to ask themselves is how would we respond if Amazon entered my marketplace?

Well, one company did not have to wonder for too long, in fact, they have been competing with them for the past 10 plus years. With the rise of Amazon, many analysts predicted the demise of Best Buy, the US brick and mortar retailer.

So how to Best Buy fight back? They applied the same approach as Amazon – customer obsession.

In fact, under the new CEO, Hubert Joly, they undertook a transformation from a transactional retailer focused on store traffic and closing sales to one focused on building customer relationships for life.

Where does a customer-obsessed transformation start?

It begins with your customers and employees when a business is under attack as Best Buy was around 2009, a new vision and purpose for the business’s future needs to be articulated.

Joly launched a turnaround plan called “Renew Blue” in 2012 that was designed to address all critical stakeholders in the business beginning with customers.

To gain insights on what was happening at the frontlines, Joly spent a week working in a store and talking with employees. They told him the website sucked, it was slow and difficult to navigate, and the employee discount had been reduced recently by previous management. They also described how customers were “showrooming” coming in to see products then buy them somewhere else online.

Joly began with some quick wins, restoring the employee discount and taking price off the table by guaranteeing to match online prices.

This showed he was listening and more importantly acting on feedback, a critical trait for a customer-obsessed leader.

He then focused on customer experience, redoing the website, investing in search and matching Amazon on free fast shipping.

By focusing on their unique strengths, the in-store personal experience, they have been able to focus and start winning again.

Joly shifted the employee mindset by instilling a new purpose. In his words “we’re not in the business of selling products or doing transactions, we have our purpose, which is to enrich lives with the help of technology.”

“We don’t see ourselves as a bricks-and-mortar retailer. We are company obsessed about the customer and in serving them in a way that truly solves their unique problems.”

What does this mean in practice?

For Best Buy that means introducing new service offerings such as the “in-home Advisor” which involves best buy employees going to people’s homes for free and providing expert advice on how to better select, buy and install technology to enhance their lives.

A second example is “Total tech support” which involved Best buy taking ownership of any technical problem in the home and fixing it, all for $200 a year.

The third example of their innovation is a focus on aging seniors with an emphasis on helping them stay in their homes independently for longer. Through the smart deployment of technology they can detect if something is wrong and people need help, they can then intervene to make sure people get the help they need.

Customer-obsessed Leadership

Hubert_Joly_jeff_bezos

Customer-obsessed leaders don’t just say they are focused on customers they act on it and make decisions with a customer lens every day.

A great example is Best Buy’s relationship with Amazon, although fierce competitors on many fronts, they also see opportunities to collaborate and work together because it is the right thing for their customers.

“A lot of other retailers have been reluctant to sell their products. The reason we’ve sold their products is because we’re customer-driven.” says Joly.

In fact, recently Amazon chose to launch its Fire TV Smart TVs exclusively through Best Buy.

“Every management meeting we have, we don’t start with the financial results. We start with people. Then we talk about the customers, and last we talk about the financial results”

 “I don’t believe that the purpose of a company is to make money. It’s an imperative. It’s a necessity. But it’s not the purpose”

Hubert Joly

 

The turnaround strategy with its reinvigorated purpose and customer obsession around enriching people’s lives through technology are paying off. The ship has turned, and the future looks bright for this retailer once thought to be following Circuit City into bankruptcy.

How can you instill a customer-obsessed culture in your business? It starts by understanding your current culture and charting a path based on purpose, people and delivering great customer experiences.

Sources:

http://tcbmag.com/honors/articles/2018/2018-person-of-the-year-hubert-joly

https://www.cmo.com.au/article/659314/how-best-buy-shifted-from-being-retail-led-customer-relationship-driven/

 

This is why playing it safe is the biggest risk for legacy companies

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Making pizzas seems like a simple business. After all its been happening for centuries and it seems like almost anyone can do it. But to make a sustainable business out of it and maintain an appealing brand in today’s competitive world requires a customer centric leadership mindset.

A starting point for Domino’s change from an ailing pizza maker in 2010 to a growing food business was a leadership change. Patrick Doyle became CEO in 2010 after Domino’s had experienced several years of stagnating business and declining share price. Doyle realized that he could only revamp the business if he could lead and create a mindset change in staff – a change from an “omission bias” where people worry more about doing something different than no change and “loss aversion” where the focus is on not losing rather than winning. I remember the great American motivational writer and speaker Zig Ziglar saying “.. the fear of loss is greater than the desire for gain”. Doyle realized that playing it safe was the riskiest course of all and he needed to create a mindset in the business that change is a necessity and a learning mentality in which for staff “failure is an option”.

A Customer-Centric Leadership Mindset was Needed to Transform Domino’s Pizzas

The change in Domino’s strategy came with a big picture view and a realization that they were not only in the pizza-making business but also in the pizza-delivery business and how this fundamentally affected the experience of their customers. This meant becoming just as much a tech company as a pizza company to transform the way customers could order and monitor the status of their order using a Domino’s app. Other apps were created to enable customers to provide feedback and become involved in games making ‘virtual’ pizzas.

Staff needed to be open to customer criticism to help them make better pizzas that customers would love eating as well as keeping them warm enough by the time of delivery. So Domino’s took on board customer views of how bad the pizzas were and suggestions on what to do to improve them.

Customers’ frank views were aired in advertising and social media and created a transparency and honesty that enhanced brand trust. Domino’s used staff in ads to describe how they had changed recipes and ingredients to make better tasting products. The company created a delivery car with one seat and a warming oven for up to 80 pizzas. It modernized its image to create more of a sense of style and a sense of humor. All of these things were needed for success. Here is 4 minute video describing what they did:

But the foundation for creating this change to a more agile, customer-responsive business came from the customer mindset brought by the new leader and embedded in the business in a way that enabled them to change and transform. As one senior leader told me recently it is the focus on the customer and their changing needs that is the motivator for leaders and staff to change!

Domino’s business results prove the point. Today, it is the second-largest pizza chain in the world, with more than 12,500 locations in more than 80 countries, and up from a share price of around $8 in 2010 to one of $215 in June 2017.

Learn more about what a customer centric culture and mindset are by reading our book, the Customer Culture Imperative.

What do customer centric companies do? Create Advocates for Life.

corso281In my travels in recent weeks I have experienced two examples of how a customer-centric attitude and behavior produce memorable customer experiences. Both of these were in hotels in different countries.

In Rome my wife and I stayed at Hotel Corso 281. We planned to go south for a few days by train and wanted to leave a large case at the hotel and pick it up again on our way from the Amalfi coast via Rome to Venice. Even though there would only be a 45 minute time between our change of trains in Rome, Delia, the front office manager assured me that they would send a taxi with my bag to the station as soon as my train arrived in Rome. So we took the chance. When I nervously called the hotel on the morning of our journey and spoke to the hotel front desk a different person was fully aware of my situation. As we pulled into Rome station I called again and another front desk person was fully aware and organized a taxi to send the bag. When the taxi arrived at the station it had a large sign with my name in the side window and I gratefully took my bag. Soon after I received a call from Delia to tell me the taxi driver reported to her that the bag had been delivered. We made the train connection all because of a display of team collaboration embedded in the belief that the customer’s needs must be met. When next in Rome we are going back to stay at Corso 281.

In Dubai I checked in to the Rihab Rotana hotel after a 7 hour flight from London. The front office manager gave me his card and also the card of the other front office manager who was off duty. He assured me to call them any time if there was a problem or something they could do. This gentleman, Mazen, was gracious, attentive and carefully explained all hotel services. This manner of care could be seen from all staff in the hotel – from housekeeping to concierge to the gym and pool deck.. Soon after checking into my room a bowl of fruit was delivered. Each day in my week long stay I was greeted by the smile of Daryl, a young lady in the restaurant who seemed to be there for all seven days of my stay. She told me that their team of five often had to work long hours and 7 days because when the hotel was very busy they had to make sure all guests received a great experience. Sometimes at the end of the day even though she had already been there 12 hours her greeting and smile never diminished. I will go back and stay at Rotana in Dubai.

While these things are small for service people with the right attitude and attention to customer needs, they are huge for the customer.

Bottom line – I am an advocate of both these hotels, they stick in my mind, I will go back and I will recommend anyone that asks to try them as well.

Do you attract the right talent to your organization? People that focus on the reason their job exists? Does the leadership of your organization focus its attention on delivering a great experience?

You can learn more in our book the Customer Culture Imperative

Customer Centric Leadership in Action – A lesson from Elon Musk

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One of the central tenets of being a customer centric leader is listening to customer feedback and responding with action.

There is no better recent example than Elon Musk’s response to a customer complaining about the Tesla charging stations being used simply as car spaces.

The Tesla customer complaining happens to be Loic Le Meur, a fellow entrepreneur and major tech influencer, with 130k followers on twitter. You could argue that probably holds more weight than just your average customer but clearly the issue was one bubbling up and on Elon’s mind.

Here is the interchange from the two on twitter below:

elon_musk_twitter_response

Loic’s tweet was responded to within 20 minutes and within 7 days the press announced “Tesla to begin charging idle fees to those remaining on the charger beyond a full charge”

As the team at OfficeChai reported:

“Tesla was going to charge $0.40 for every minute a fully charged Tesla would stand at its parking stations after a five minute grace period. This simple change would ensure that people wouldn’t leave their cars at parking stations, preventing others from using them.

And what’s incredible is the pace at which the product change was implemented. Tesla might still call itself a startup, but it hardly is one – it has over 30,000 employees, and large engineering teams. To have a product feature conceptualized, implemented and shipped in a week is nothing short of miraculous.”

Now this might not be the perfect solution but Tesla will listen to customers and refine further as needed.

This is what customer centric leadership looks like in action, in this case led from the top. Elon’s expectation is that everyone in Tesla is listening to customers and responding to continually refine and improve the experience and value being offered.

Are you are customer centric leader? Find out more in our book, the Customer Culture Imperative

 

5 ways the insurance industry is being disrupted

Game_Changer_Disruption

The insurance industry is facing a shake-up. The traditional model using specialist agents who communicate with their customers around the time insurance premiums are to be renewed and offer generalist solutions is being disrupted.

  1. Consumer needs and demands are changing. Independent online research sources enable consumers to buy online, compare alternative offers and enhance self-service choices. Insurers will need to offer more personalized products that take account of individual circumstances and provide more transparency in their pricing.
  2. Sites such as Friendsurance enable friends to pool their premiums and is an example of how social networks are bypassing traditional insurance companies. As these grow they will impact incumbents.
  3. Car manufacturers are looking to add value to their offerings and through technology will have the ability to offer tailored insurance based on a driver’s history rather than industry wide statistics. Just as they bundle in car servicing they have the ability to bundle in insurance as an overall car package.
  4. As more car sharing takes place and the number of low frequency drivers increases premiums can be restructured to cover “pay as you use”.
  5. Many new competitors will be pure play online companies as we now see with specialized travel insurance companies like 1Cover. There will be many specialized market niches for them to attack.

Incumbent insurance companies will need to build a cultural capability around customer and competitor foresight – a capability that is attuned to future customer needs and future competitive threats. This will require a cultural agility that enables them to innovate and act before customer changes and new competitor models break the floodgates and seriously erode their businesses and their future.

Is your company being disrupted or a disruptor?

You can read more about what you must do to build customer and competitor foresight in The Customer Culture Imperative.

Where is the innovation in American retail banking?

customer_innovation_in_banking

More than 150 nominations representing over 30 countries were received for the 2012 BAI-Finacle Global Banking Innovation Awards for breakthrough innovations that positively impact banks and their customers. Of these, 27 were from banks operating in the US and 4 from Canada.

The awards are designed to recognize banking organizations for game changing products, services and practices in retail banking. The award winners were selected by an independent international group composed of prominent industry thought-leaders, academics and retail banking professionals. The winners were announced on October 12, 2012.

The award for the Most Innovative Bank of the Year went to First National Bank in South Africa.  The Product and Service Innovation winner was the OCBC Bank, Singapore, the Channel Innovation award went to DenizBank, Turkey and the Disruptive Innovation in Banking award was won by Alior Bank in Poland.

Here’s how the judges described the First National Bank, a Division of FirstRand Limited:

“First National Bank was named as winner for its culture of innovation and advancement of retail banking. As part of their innovative culture, the bank holds an internal competition, called “Innovators,” that formally encourages and supports the process of innovation and related competencies. Business units within FNB are empowered to innovate through leadership buy-in and advocacy. As a retail banking institution, FNB takes a top down approach to innovation to embed it into the culture. It shows visible support of innovation through internal programs designed to develop new-to-the-world products and services that provide access to retail banking for all who want it. FNB’s commitment to innovation can best be seen through their annual contest – “Innovators”.

“Innovators” is a companywide initiative that supports and enables innovation with leadership buy-in and advocacy from the CEO and his direct reports. Winners of “Innovators” win real money (up to $120,000 USD) for innovations that meet the test, such as e-wallets and mobile phone offerings, which FNB is known for.

FNB encourages innovation at the lower levels of the organization, too, with its “Minivation” program, which rewards back office employees with “e-bucks” that they can redeem at FNB clients for suggesting more day-to-day, incremental improvements. A minivation is anything that takes less than three months to implement that provides some business benefit.

From an organizational strategy design perspective, there is a bias towards innovation in the FNB overall strategy in that it is both a strategic pillar and organizational value. FNB’s decentralized structure gives discretionary decision rights to business units who are enabled and encouraged to innovate. This top-down leadership and support evidenced through the sheer volume of innovations in all categories at FNB makes them The Most Innovative Bank of the Year. “

Of course, this is not the final word on innovation in American retail banking, but there was only one US bank finalist amongst the 12 finalists in the four categories suggesting that innovative practices can be learned from banks operating in other countries.

But what does successful innovation require?

Sustainable innovation, well described in the First National Bank case above, requires an embedded culture led from the top and supported and recognized at every level and in every group in the organization. To be successful, this innovative culture must incorporate behaviors that focus in 5 areas:

1)   Customer needs, especially foresight of future customer needs

2)  Competitive advantage, especially foresight of future competition

3)  Broader external changes, especially changes around the periphery of the industry

4)  Collaboration, especially internal  across functions and with external partners

5)   Alignment, especially innovation aligned with the company strategy

How innovative is your culture compared with your peers? Do you see strong behaviors noted above that are requirements for successful innovation in your business?

5 traits companies must have to play in free-for-all energy industry

customer centricity in the energy_industry

Traditional electric utilities are on the verge of facing massive competition. The barriers to entry have fallen and a large number of new and old companies have entered the power generation business.

Numerous and diverse competitors non-utilitieshave already entered the electricity business. Wind farms are expanding. More than a hundred Silicon Valley startups are developing new power technologies. Many of these have venture capital funding. Several like the Bloom Box fuel cell, have the potential to transform the industry by bringing power generation to the home.

Real estate companies and builders are supplying rooftop solar on new homes. Schools, government buildings, and businesses are deploying their own solar panels. Chevron Energy Solutions, a Chevron subsidiary, is one of the nation’s largest installers of solar energy systems for education institutions

Tie this to consumer and business resistance to higher energy prices and an increasing drive to seek out lower cost alternatives and we will soon see the competitive floodgates open putting the traditional players with big traditional infrastructure investments at risk.

It is not clear where all of this is going to go.  Everything is in the mix – technology, the economy, politics, globalization and societal trends towards “green and clean”. The government plays a big part with its energy policy along with regulation, subsidies and incentives for varies parts of the industry.

The one factor that is common to the longer-term success of each player in this industry is the adaptability of its corporate culture. In this environment it must have a culture characterized by 5 traits:

  • Customer understanding and insight
  • Competitor awareness and foresight
  • Peripheral vision of industry changes and impacts
  • Strategic alignment around value for all stakeholders
  • Collaborative and empowered workforce

Those players that have these 5 cultural traits embedded in their DNA will be able to adapt to the rapidly changing conditions and challenges in this disruptive industry. Those that don’t will disappear or be acquired.

Could your business survive in a competitive free-for-all like this? Does it have the 5 traits required for success in any industry undergoing major market and technology shifts?

4 reasons internal competition helps companies win with customers

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People view competition in many different ways. In the business world it is often viewed negatively as it can impact profit margins and companies must compete for a share of the pie. From a customer’s perspective competition drives better service, better prices and better value.

Personally I am a big fan of competition, it pushes me to the next level, it forces me to get better. Inside organizations competition can also prove to be a positive force but no all competition is healthy and productive.

Unhealthy competition develops when the following happens:

1. When it causes people to feel negatively about other peoples’ successes as opposed to motivated.

2. When people wish for others to have obstacles so that they are held back.

3. When people feel shame when they fail.

4. When it motivates people to seek competitors who are naturally weaker than themselves, so that they feel an advantage.

Healthy competition can be a great productivity booster in organizations and drive better results. Here are some of the benefits:

1. It encourages people involved to strive further and push themselves harder than they would have without competition.

2. It drives people to achieve more growth and success – not because they are driven to win or lose – but because they are doing your best at something that you care about.

3. It changes the boundaries of what you believe you are capable of and stretches the limits of what you believe is possible.

4. It requires the courage to take risks, requires the willingness to fail, and necessitates a vulnerability to admit you are ambitious to succeed.

The worlds best organizations balance healthy competition with cross company collaboration

What type of competition do you see in operation where you work? Do different functions compete in a healthy way? Do they collaborate?

Why global competition means every company must be more customer focused

global competition requires peripheral vision

Global competition is coming to the telecommunications industry in a major way. Yes Skype and others have been around for a long time but direct competition between the telco powerhouses has been slow to evolve.

America’s largest telco, Verizon, is planning to make a push for corporate customers with its secure internet and cloud computing products in the Asia-Pacific region. This move will see it competing head-to-head with Telstra International, the overseas arm of Telstra, the largest Australian telco. Telstra chief executive, David Thodey, recently cited expansion into Asia and more multinational corporate clients as a key strategic priority for Telstra in 2013.

John Harrobin, Verizon Enterprise Solutions chief marketing officer said “We believe that we are positioned to be one of the handful of players worldwide that can serve the mission critical needs of enterprise customers,” The move into the region puts Verizon in direct competition with Telstra, which wants its international arm to sell more global data and telecommunications services to companies with offices around Asia.

Verizon also wants more business with Australian corporations. It already provides telecommunications for some Australian government departments and for companies in the financial services, mining and manufacturing industries. It is also aiming to provide cloud-computing services to medium-sized companies that have only Australian operations,

IT services are moving from an on-premise service to a cloud-based service, and this would be a “massive disruption” in the sector, he said.

For Telstra, this type of heavyweight competition is relatively new and collaboration with new partners in Asia may be necessary. Telstra’s Asian success has been mixed in the past. For Verizon, the Asian markets will pose a new challenge – they will be aiming to sell new disruptive solutions to new customers. This is much tougher and riskier than selling products that everyone understands to customers you already know.

Which company is best positioned to win this battle? Will it be Verizon with its larger infrastructure and resources or Telstra with its traditionally stronger links in Australian and Asian markets? The answer will ultimately turn on the relative strengths of their customer cultures – their understanding of current and future customer needs and the ability of their entire organizations to deliver superior value for corporate customers. Their cultures will need to be resilient enough to understand, adapt to and act on their current and future competitors’ strategies and to have sufficient “peripheral vision” of opportunities that will require product and service innovations.

Do you have a customer culture that enables you to win competitive battles of this type? Does your corporate culture have the “peripheral vision” to identify and act on early warning signals of competitive threats and disruptive market opportunities?

Competing for the future – How Australia Post is reinventing itself in this new age of competition

digital post boxAustralia Post recently released its annual results. Revenues from “regulated mail” – standard postage – are $1924 million and falling, and it made a loss of $148 million. “Non regulated parcels and retail” revenues were up 8.5% to $3073 million, returning a profit of $546 million. An important part of its future will be digital services provided to its commercial customers and Australian consumers.

A starting flurry in this new world is the soft launch of MailBox in November 2012 with a full launch to take place early in 2013. Australia Post has announced that several Australian banks, government departments and utilities will use the Digital MailBox. It will be free to all Australians. It will enable consumers to receive and pay bills, track and manage their relationships with their providers and store all of their important documents in one place. It’s accessed with one password, from any Internet enabled device, 24/7, from anywhere in the world.

Enter Digital Post Australia (DPA), a joint venture between Computershare Ltd, Fuji Xerox Document Management Solutions Pty Limited and Zumbox Inc.

Got that? It’s Digital Mailbox from Australia Post, and Digital Postbox from Digital Post Australia. You can see why Australia post is suing Digital Post Australia  over the name. The first court action was dismissed, but Australia Post is pursuing the action.

At the launch of DPA’s Digital Postbox in early December, CEO Randy Dean ridiculed Australia Post’s launch. “Our competitor recently used its trusted and iconic brand to ‘formally launch’ what appears to be a ‘statement of interest’ for their Digital Mailbox Service. We felt Australians deserved to see what a functioning Digital Postbox looks like and how it operates.” Dean invited consumers to preview the service and activate their “secure and free” Digital Postbox.

Dean says Digital Postbox begins a new era of convenient online mail delivery. “Once the consumer’s Digital Postbox is activated, they won’t need to do anything else. Mail will be automatically delivered online and be available on virtually any web-connected device. Consumers can receive, store and manage important documents such as bills and account statements in a trusted and secure environment. Digital postal mail offers businesses an efficient and cost-effective customer channel that can be enabled using their existing business processes and partnerships and can deliver savings of up to 70% per mail item.”

“We have decades of experience in the secure digital processing, storage, management and printing for the largest and most security sensitive organizations in Australia including banks, government agencies and superannuation funds.

The two companies are now readying their products for market, attempting to pre-empt each other with various pre-releases and announcements. There is no love lost between the two, and their sniping and attempts to define themselves and each other are becoming more intense.

But this is not the only competition. Existing systems like BPay, increasingly sophisticated online banking and now the imminent boom in mobile payments systems are making the technology largely obsolete before it is even introduced.

The eventual winners in this digital environment will be those companies that have a strong customer culture – one in which customer insight and foresight will determine the best way to compete, where the future competition will come from, how future profit will be made.

Australia Post, as a government owned organization, still has a way to go to create and embed a customer culture that will enable it to compete profitably in the digital marketplace.