Thank you, first of all, for all the input and everything I’ve gotten from folks, the support, the rankings and reviews that I’m getting on iTunes and Stitcher, particularly iTunes where I can see the rankings. We’re number seven. To me, that’s absolutely awesome to be ranked at number seven in “What’s Hot” on iTunes. Again, I just thank you all, to all my supporters; I really appreciate it. Those rankings help us get more coverage.
Today what I want to discuss is just the opposite of what we did last time. Last time, we were talking about branding and how to position our brand, your company, product, or service. Today, wherever you are, whatever you have, how not to lose or how you might lose your advantage. That is, lose your image and lose your status with those customers. To put it a certain other way, think in terms of all the companies you’ve seen that have made a change and they almost destroy themselves in the market.
Think in terms of Coke when they came out with New Coke. Think in terms of what McDonald’s did, where it changed things quite a bit. Although they’re so big and prevalent, and they have such a long-term reputation, it does make them a little bit more vulnerable. Because remember years ago they had Ronald McDonald, and they had all kinds of things oriented around kids, and somebody would drive by with the kids in the car and the kids would be screaming: “I want to go to McDonald’s! I want to go to McDonald’s!” That’s not going to happen as much anymore, because they don’t have some of that same association. They gave up something, and it certainly does and is going to have an impact.
As we said with branding before, when a company gets itself, stands out, and owns a territory or owns a concept or an idea, it’s very difficult to penetrate it once they’re in a dominant position. Right now, for example, Verizon is well-known for having excellent coverage all over the country. I don’t know whether you’ve noticed it, but if you go to different places and you go to someplace where there are other representatives, you go into Best Buy or you go into Costco and you might see a T-Mobile person standing at the booth – that person will start telling you things like (it could be another company), and I’ve heard this from T-Mobile, I’ve heard it from AT&T, etc.: “We’ve all of a sudden invested a lot of money in towers around, so now we really have good coverage, too.” It doesn’t ring with the credibility of something that you already know. It’s somebody that’s claiming to have something “as good” as something that you’re sure of. It doesn’t work as well.
What you have to do is you have to come up with something a little bit different in order to have that credibility. What if T-Mobile or somebody, and actually there are a couple of companies out there, that target more certain cities or certain locales? Keep in mind that there are a lot of people, a tremendous number of people that never leave their own city. If they never leave their own city, they don’t need Verizon’s coverage all over the place. Verizon has a position to it that you can get it wherever you are. They don’t have to worry about that, and they could have a discount for something. How does that change Verizon’s position? If they’re selling it a little bit cheaper for a particular city because of the locality, of course, Verizon would probably not match that price because that would be subject to having to give that price to everybody in that area that would be the travelers, etc., and they’re more nationwide. There’s lots of different things, and that’s an example of a niche that can occur, and what you might not want to do to counteract that.
What you’re doing is you’re looking for an opening whereby possibly the power player can’t match you. This works in small companies, large companies, all over. As an example, when I was making a presentation at a large international automotive conference put on by the University of Michigan, Oldsmobile was moving itself from the idea of a family car; they wanted to be upscale and sporty. What happened was they saw the sales dropping and difficulty. Instead of solving the problem that they had, they wanted to change to something they weren’t. People’s images of those, of course, was: “They’re a generic family car,” and they want to be upscale, sporty. What I did is I gave them what I referred to as the “Black Hole Award,” because they had to move from something that they were to something they wanted to be, and there was nothing in between. They would have to, as I put it, pass through a black hole. That was eight years just before they discontinued Oldsmobile.
Another really good example is: Have you ever noticed how important it is that restaurants have certain meals that you’ll see there all the time? People go in there, expecting it to be on the menu and the exact same preparation every single time. If you go to order something at a particular restaurant, whether it’s paella or meatballs and spaghetti in an Italian restaurant, you’re going there because you know what theirs tastes like and you like it. Every once in a while, you’ll get some chef or somebody that will try to change it, put their spin on it. That usually ends in disaster.
Example, there are some restaurants that have decided they just wanted to make changes. I stopped going to them. Why? Because those were not the things I wanted, and I didn’t know I was going to be able to get the things that I really liked. I went there because there were a couple of dishes I really liked. I went through and the Culinary Institute of America, and that is something that they taught. The chef has to make sure that everything is made the same way every single time. It is reliable and heavily tested.
There was an Italian restaurant, this place was packed all the time. You had to get there early enough to make sure you could get in without too much of a wait. The woman who owned the restaurant was getting up there in years, and she finally passed it on to her son. Her son, first of all, almost immediately changed the Italian bread that they used to serve which had a really nice Italian sauce on the top of it, which was really great. Her son also changed the sauce that went on the spaghetti and meatballs. That restaurant not only lost business fairly rapidly, it was closed in six months.
Know your customers, know what your customer likes and why they’re coming there. The most important people in your business are the ones you already have. You might want to expand your customer base, but unless you’re making something really strange happen inside your company, you don’t want to throw away your existing customer base because you decide you want to put your own spin on it or you want to go into something else. Keep in mind: You’re not important; the customer is important.
Another example was Volvo came out with a performance car, a very highly priced performance car. This was about 20-25 years ago. When they came out with it, it was very highly priced. It was basically targeted in the same category as a Porsche or a BMW. Now, that’s not Volvo’s image. Volvo’s image is safety. Basically, safety is a much more price-sensitive category. What happened? The car, very quickly, disappeared. Again, not staying within the context of their customer base is a disaster.
One very important lesson is: Find out what your current customers like about your products, and expand, market, or target from that position. Thank you.