There’s always a rush these days to get plans into action. Action is what we value, just as we’re always looking for someone who “can hit the ground running”. But what if they’re running in the wrong direction? And how do you know in which direction to run?
The answer to that mistakenly comes in businesses doing what they’ve always been doing and whenever possible just running faster. In the accelerated competitive environment of New York City, we’ve become accustomed to stores, restaurants, professional services and even hospitals suddenly disappearing. These businesses failed even though they worked harder and ran faster than anyone around them. Why did they fail?
Most likely, they never asked their customers whether the direction they were going, the products and services they were offering or the benefits they perceived internally met customer needs. It’s the rare manager or entrepreneur who can intuit what the market is looking for. Otherwise, there would be a lot more people like Steve Jobs around. Businesses have to get feedback from their customers and understand how to match their offerings with what customers are seeking.
Not surprisingly, customers often see product plusses and minuses in completely different terms than the companies selling them. The best advertising campaign in the world won’t convince customers that they should be seeking something different. We’re just not in that linear world of the 1950s and 60s when we could be told what detergents make our clothing cleaner and then march in lockstep to the store to buy them.
Of course, businesses don’t always listen to their customers because internal beliefs are so strong as to refuse to change their strategy to meet customer needs. Here are three examples to consider:
- Several years ago, we were asked by the Chilean Pisco industry to provide a strategy that would open up the U.S. market for them. If you don’t know Pisco, it’s an eau de vie, somewhat like a refined grappa, that’s made in Chile and Peru. Our research found that bartenders believed it made most vodka-based cocktails more interesting and one of our key strategic recommendations (futureshiftpisco.com) was to unleash the creativity of bartenders with a series of tactical programs that would challenge them to develop great Pisco-based cocktails that their customers would love. But Chile is a country where perfection in planning is highly valued and established. That works when building bridges, tunnels and skyscrapers, of which you’ll see many in Santiago these days but not when variable decisions are involved as with bartenders and their customers. The Chilean Pisco industry decided to design several “perfect cocktails” that they could then promote in the U.S. The result? Peruvian producers who gained a better understanding of the U.S. bartender now dominate the market. There’s still time for Chile to adapt as Pisco still is not well known in the U.S. They simply have to acknowledge that their customers have more power than they do. Easy, right?
- While we’re on Chile, let’s move to technology. This time the Chilean technology industry told us they wanted to sell their growing tech industry to U.S. companies. Chile had already achieved tremendous success in establishing itself as a successful place to locate an offshore tech center. Now, they wanted to have a presence inside the U.S. to provide SaaS and enterprise integration products. Again, we spoke to prospective customers for these talented Chilean companies and were told that if they could establish partnerships with Chilean companies in Latin America, a piece of their U.S. business would likely follow. (FutureshiftChileIT.com)In other words, help us in your territory and then we’ll reward you in ours. U.S. companies wanted to understand the Chilean miracle and how it had become an export powerhouse. But just as with Pisco, the forces that worked internally in Chile were too strong to persuade them to adopt a market-oriented strategy in the U.S. Six Chilean IT companies came to the U.S. trying to sell their services based on low prices. But why go to a company thousands of miles just for low prices when that can be found down the road? Today, there is only a small amount of programming work going to Chilean companies, as talented as they are.
- Most recently, we conducted a research and strategy project for the Maine lobster industry. Following 200+ interviews, there were a number of findings in that report that showed how Maine lobster possesses attributes to restaurant and hotel chefs that were not being considered within the industry. There is ample opportunity for the Maine industry to differentiate its brand from all competitors. However, lobstering is a traditional industry and change does not come easily. Like the two Chilean examples, internal beliefs in Maine are strong. Most lobstermen are focused on their first transaction with a dealer when they bring their catch to the dock. The needs of restaurant and hotel chefs can be perceived as a distant concept and there is little patience for the time it takes to raise the foodservice market’s demand. The local dealer and summer tourist who loves to sit at the water’s edge, even though they both pay rock bottom price, is more concrete. It’s been that way for more than a hundred years so change, despite market feedback, isn’t easy. There’s cause to remain optimistic but it remains to be seen whether Maine’s lobster industry adapts.
In each of the above cases, the right strategy began with listening to customers. That helped set a direction for the industry to go. But at that point, industry members often put up obstacles to change. After all, it’s far more difficult to do something new than the things you’ve been doing for dozens of years, even though they may not be working.
FutureShift develops brands and rebranding programs by understanding how customer decisions can increase engagement and loyalty.
Tags: Action, Advertising, bartenders, Change, chefs, Chile, cocktails, Corporate Myopia, Creativity, Customers, Direction, futureshift, Information Technology, IT, Latin America, Leadership, lobstermen, Maine, Maine Lobster, Marketing, Mistakes, New York, Outcomes, Peru, Pisco, Positioning, SaaS, Situation Analysis, Steve Jobs, Strategy, Tactics, technology, Trade Associations, U.S. Marketplace, Winning