DO YOU MAKE A DIFFERENCE?

All business leaders understand that to have a competitive advantage they have to be different from their competitors. In fact, the greater your difference, the greater the distance between you and your competition. Therefore, we all strive to differentiate ourselves through unique products, exceptional service and/or distinctive brands.

The trouble is, much of the time these differences do not matter to the consumer.

Take General Motors, for example. In the late 1990s, GM put OnStar, a system for linking motorists with a call centre, a wireless network and the Internet, into its vehicles. Not only would OnStar help motorists in distress get roadside assistance or owners track down stolen cars, drivers could check their stock portfolios, chat with customers and make dinner reservations as they drove their new GM cars along city streets and country highways. GM’s senior managers proudly predicted that OnStar would soon produce US$ 1 billion in profits every year.

The trouble is, no one wanted it. Many dealers don’t bother to activate OnStar for their customers, some customers never bother to use it and nearly half of those who do, fail to renew it after the first year.

It seems that customers either don’t want to do what OnStar will let them do as they drive along or they aren’t prepared to pay US$16.95 a month to do them. OnStar, which looked like being GM’s best idea since the electric starter motor, could soon go the way of Pet Rocks. True, OnStar did make a profit last year, but most of the revenue came in the form of transfer payments from GM itself because premium car buyers get OnStar free.

Clearly, GM came up with revolutionary technology and a way of differentiating their cars from those of their competitors. But a difference to be a difference must make a difference and OnStar did not make enough of a difference to the lives of GM’s customers that they were prepared to pay for it. OnStar looked like a good idea to those living inside GM but not so great to customers living on the outside.

The lesson, of course, is that a desk is a dangerous place from which to view the world. In a customer driven company, product and service development would begin with the customer. As we all know, customers are prepared to spend their money buying solutions to problems that bother them. The key to successful product and service development, therefore, is to identify and understand the problems that customers have and then develop solutions to those problems. If you do that, your products and services will be seen by your customers as making a real difference to their lives.

But from the seminars I run in many countries in every industry imaginable, I see how little companies really know about their customers. We don’t know much about how they live their lives or run their businesses. We don’t understand what they are trying to do and what problems are preventing them from doing that. But we are creative and so we have no trouble in coming up with brilliant ideas for innovative products - like OnStar.

Your aim should be to be different, so different that your customers believe that if they are not doing business with you, they are missing out. The first step to doing that is to get out of your world and into theirs.

Which world are you living in?

top