Category Archives: Disruption

What is the kryptonite for disruptors?

Established businesses everywhere are under attack. The headlines are full of stories of business disruption. Entrepreneurs everywhere are building companies to unseat the entrenched firms.

While many think the answer is to invest in more technology, lobby government or follow their competitors actually the answer is right in front of them.

Our team in Sydney recently had the chance to sit down with Luke Jecks, the Global CEO of Naked Wines for his perspective. Listen to Luke talk about what he describes as the Kryptonite for disruptors, its a great lesson for anyone in business today:

So what’s the Kryptonite for disruptors? A Customer Culture or as Luke puts it:

“Love your customers”

If you spend time understanding and acting on your customers needs you will create loyalty that will keep you as immune as you can be to disruption.

So how did Naked Wines disrupt the wine industry?

Before Luke setup Naked Wines four years ago he was looking for an industry where customers felt disenfranchised. He found it in the Australian wine industry – a market dominated by two large retail chains owned by Coles and Woolworths that between them shared almost 70% of wine sales nationally. Not only did he find wine lovers who felt little connection with the vast array of brands but also boutique vineyards that were being squeezed out of the market by ever narrowing margins and an inability to finance the next vintage.

Luke knew that if he could create a personal connection between wine growers and consumers and a financial model that could provide more stability and certainty for wine growers he could build a new business.

He realized that he needed wine consumers as repeat customers and he came up with the idea of “angels’ – that is consumers as angel investors who would pay $40 per month and build up a credit in their account to be used to buy the boutique wines of their choice.

Four years after launch Naked Wines in Australia has more than 50,000 sustained angels, more than 35 boutique winery suppliers with an online communication and ordering system that connects them.

Annual Australian revenue of $30 million and more than $200 million globally is testament to the fact that the whole Naked Wines team have a culture that enables them to “love” their customers.

Isn’t it time to create a customerculture in your business and build up your disruptor defenses?

If you are interested in creating this type of culture in your organization why not attend one of our MRI Accreditation Workshops held all around the world!

 

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.