Don’t Aim for the Moon
Part one of the Smith+Co Adding Value Series
Brands who over-promise and underwhelm are dead before they’ve got going. The customer experience has to be approached with as much pragmatism as ambition, and it needs grown up heads to ensure it is both sustainable and deliverable.
One of the biggest mistakes I see is when organisations assume that they should differentiate on every part of their marketing mix. The truth is that success does not demand this level of ambition, as everything depends on what the market truly values and your competitive set. Very few brands can afford to invest everywhere. For example, if you’re a Product Leader like CitizenM, it is all about R&D and innovation, if you’re differentiating through Customer Intimacy like Ritz Carlton, you need to invest in your people and if you’re competing on price like Premier Inn you need really good processes and technology to minimise the use of people and cut costs.
Now the best brands are so good that they create a great customer experience by differentiating on more than one strategy (Amazon and Apple for example). But it is very difficult to compete on all platforms because each part of the customer experience requires quite different investment strategies, value chains and cultures. (Amazon does not go out of its way to invest in its people, and it often receives negative press for this. Apple doesn’t even try to compete on price)
Keeping customers satisfied (as oppose to wowing them) is often enough for success, particularly in the low cost markets. Price is related to satisfaction whatever your strategy and not limited to customer experience. Ryanair is an example of a highly successful low-cost strategy, and I would argue, using the definition of satisfaction ‘you get what you pay for' it does provide a level of satisfaction otherwise it would not have grown to become Europe’s largest carrier. However, it is emphatically not a CX exemplar. The experience, like the cost, is minimum, which isn’t a bad thing of course, but it does not pretend to differentiate on state of the art product or best in class service.
Clearly Ryanair uses an operational efficiency/low price business model. In fact their operational efficiency in terms of punctuality etc, is much better than British Airways, an airline that used to compete on Product Leadership and Customer Intimacy but is now commercially confused having recruited their CEO from Vueling who is trying to shoehorn in low-cost into the mix. That way will end in tears, as it is practically impossible to succeed in all three.
This blog series will unpack what it means to deliver real value. But first, it is vital to understand that a brand shouldn’t naively aim for the moon when just above the clouds will suffice. The questions we’ll be focusing on in the series are simple but imperative for setting a long term customer experience foundation:
Who are your valuable customers?
What is it that they value?
What are the value drivers for your brand?
Are low price and value the same thing?
It is possible to add value, in any market on any budget. Creative thinking, training, insight and innovation are the signposts to delivering a valuable customer experience. Ignore any one of these and you can forget adding value, because your brand won’t be around long enough to even compete in the market.