7 Ways To Disrupt Your Industry

Massive disruption is coming, and the only question is whether your firm is going to cause it or fall victim to it. Disruption is not easy—either to create or to confront. We have no illusions about that.

But in the spirit of helping established firms best serve their customers, we offer seven ways your firm could disrupt its own industry, raising the standards of customer experience and creating new opportunities for growth:

1) Totally eliminate your industry’s persistent customer pain points.

Each industry has practices that drive customers crazy.

Technology providers drive customers crazy with technical support that often requires long waits on hold and hopelessly complex interactions (“Just find the serial number on the back of your device and type that into the space provided along with your IP address and the exact wording of the error message you encountered”).

Unsurprisingly, this is the exact type of practice that causes customers to believe a company is behaving stupidly.

What practices exist in your industry that drive customers crazy? How do all companies in your industry behave stupidly? Identify these types of practices, and wipe them out.

Think: can we turn our process or perspective around, to look through the customer’s eyes as though they were the company and we were the customers?

2) Dramatically reduce complexity.

As we write this in November 2011, a company we have been tracking for some time—Simple, formerly known as BankSimple—is trying to take a machete to the insanely complex and confusing world of consumer banking.

Recognizing that banks do a pretty good job of managing money but a poor job of managing customers, Simple has been designing vastly simpler customer interfaces and tools.

Simple plans to partner with, not compete against, established banks. They’ll manage the customers while their banking partners manage the money.

The more complex the processes and practices in your industry, the greater your opportunity to gain competitive advantage by simplifying them. Yes, doing so will be very hard. But that’s the whole point; the first firm to do so gains tremendous advantages.

3) Cut prices 90 percent (or more).

Incremental change doesn’t disrupt an industry; radical change does. Radical price reductions require radical new processes and business models. Smartphones and tablets create numerous opportunities to identify these. Recently we replaced a $500 marine navigation unit with a $20 iPad app that works better.

You don’t cut prices by 90 percent through marginal improvements in existing products. You do it by asking, “What problem are we trying to solve for the customer, and how do these disruptive forces create opportunities for us to solve it in a far more efficient manner?”

4) Make stupid objects smart.

We didn’t think this one up. The race is on to make everything smart, and the dumber your products were to begin with, the greater the opportunity to make them smart.

Think of a garbage dumpster that calls central dispatch when it is full, eliminating the need for the customer to do so or your office to send a driver out unnecessarily. That same dumpster could warn the customer when it is overweight, and point out that it would be cheaper to empty it now than to further overfill it.

No offense to dogs, but their collars could alert owners when the dog wanders away, barks excessively, or jumps on the furniture.

Light bulbs could flash before they burn out. Baseballs could announce how fast they were thrown. Plants could politely request water when they are too dry, or shout out when you try to overwater them.

Take every product you sell, and make it smart…or accept the fact that you must forever more compete on price and accept low margins.

5) Teach your company to talk.

Apple's Siri personal assistant on the iPhone allows you to have a conversation with your phone. Your iPhone can now access the Internet as well as the information it stores, both understanding and responding appropriately to your statements.

Flash-forward two to five years from now. What if your company could talk to customers? We don’t mean that your employees talk on behalf on the company. We mean that a digital, computerized persona speaks on behalf of your firm.

It takes orders. It provides support. It answers questions. It upsells. It issues refunds. All of this, and more, in response to verbal requests by customers.

The toughest part of this challenge is not technical, although a few problems still need to be solved.

The tough part is knocking down the walls that separate your databases and departments. It’s deciding whose product gets cross-sold, who gets “credit” for sales, and who “owns” the customer.

Our view is simple. No one owns the customer, and you either do what’s best for the customer or you will lose him. But the real question we want to put forward is this: what happens if your competitors’ companies talk, but yours doesn’t?

6) Be utterly transparent

Think: not just no secrets, but also no spin.

The concepts of social influence and pervasive memory will make it increasingly difficult for companies to hide from dissatisfied customers, negative reviews, and faulty products.

What if your company didn’t simply try to stop hiding, but instead radically embraced the truth? How might it impact your culture to decide that your firm would be the most powerful force in your industry making certain that every speck of the truth was obvious to every customer, analyst, and reviewer?

Would it change your reward systems? Would it impact employee motivation? Might it cause changes in the kind of employees you attract and retain?

We’re pretty opinionated in this regard. The truth is coming, and there’s nothing you can do about it. But most firms won’t recognize this until it happens. Better to get far out in front while confusion reigns.

7) Make loyalty dramatically easier than disloyalty.

According to Don Clark writing in his Wall Street Journal blog, Intel executive Mooly Eden once asked an audience how many had cellphones, and then how many were married.

Then, he asked if any of the married people would be willing to hand over their phone if their spouse lost his or hers. None would. “That is my point,” said Eden. “That is personalization.” By definition, when companies act smart they are personalizing the way they interact with and serve customers. Once you start delivering personalization, you create immense opportunities to make loyalty more convenient than disloyalty:

  • You can store customer preferences, and act on them.
  • You can save the customer time, money, or effort—especially by eliminating repetitive tasks.
  • You can provide auto-replenishment of needed supplies.
  • You can monitor products remotely, and service them before they break instead of afterwards.

Think about every major purchase decision your customers face in your industry. How can you make it easier for customers to remain with your firm? Now, think even bigger. Can it be five or ten times easier? Subtlety can be lost on today’s customers.

The challenge is to make loyalty so much more convenient, so radically easy, that customers won’t even consider switching to a competitor. Ever.

Adapted from Smart Customers, Stupid Companies: Why Only Intelligent Companies Thrive, And How To Be One Of Them, co-authored by Michael Hinshaw and Bruce Kasanoff, (Business Strategy Press, 2012). 

Follow Michael and Bruce on Twitter. 

[Image: Flickr user Sean Molin]

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12 Comments

  • Srinivas Soma

    Excellent Article. Many may think, few become successful.
    Recently I watched an Ad in Indian Television where Gold ETF company saying TV bought 30 years back is waste today whereas Gold bought 30 years back is worth millions. So we are seeing new trends in Marketing. It's no more within the industry.

  • cheier

    I think #7 is actually one of the most important points in this whole article, and I think this goes back to my full agreement with reasons stated in the book "Start with Why" by Simon Sinek. It isn't so say that those other points aren't important, but point #1 is impossible to achieve. By reducing pain points for one customer, you introduce some for others. Take Apples simplicity first philosophy with the iPod. It was a less featured device than monumentally better products on the market at that time, yet more expensive (also going to point out #3 in this article on this one), yet the product sold like hot-cakes.

    Point #4, I agree with only to an extent. The extent is that it is easy enough to rephrase that point as, "Be an inventor or innovator, but here is the innovation you should be doing." The problem is that everyone is trying to make everything smart, and all it ends up being is just another feature or gimmick. It works, sure, but the worry is the sustainability of the practice. At some point, everyone will try to make everything "smarter" but someone is going to come change the game, and everyone gets left behind. Think smaller cell phones, longer battery, voice control, etc... then the phone changes into a mobile computer by rethinking the concept of mobile communications as a whole. That is being disruptive. If you made the thinnest and sexiest phone ever (think Moto RAZR) and someone rethinks mobile communications (think Apple), where does that leave your product?

    If your focus is on loyalty (and there are plenty of books and strategies on this concept), customers will choose you over other companies, even if others are better, faster and cheaper. Some won't of course, but there is a reason people were willing to buy Apple products over their equivalent competition, even though they were more or less, slower, less featured and more expensive, and Apple is one of the least transparent tech companies in the world. There is a reason why Southwest Airlines has always been profitable, even on routes where they are not cheaper than their competitors. It is that ability to foster loyalty in their staff and customers that facilitates a culture of innovation and success in a business.

  • Dipankar Lahiri

    I read the comment of Angela V & wish to submit that JPC case is in noway a "Pain Point" relief attempt, to me it was a complete new way... they tried in marketing which was rejected by a section of its customer. Hence not worthy!  

  • Chris Reich

    Spot on article. Rarely do I read anything that I can find 100% agreement. This ought to be part of every company manual.

    Chris Reich

  • Angela V

    Great article. I do think #1 is a slippery slope though. Customers certainly want the pain points addressed but companies need to be careful about changing up processes too dramatically. JCP is learning that lesson. Sometimes what customers perceive to be "pain points" are actually habitual behaviors that customers have a love/hate relationship with. It may be about improving the pain point vs removing it completely in some cases. 

  • Robert

    Great read !! You have covered all the stupid things companies do to aggrevate and alienate the customer. Somehow common sense and innovation left the scene maybe a decade ago. Most companies especially Internet have a model that walks the fine line between the truth and a lie. It is almost like once a company has the customer /fish hooked the profit managers start their meetings annd disrupt what was once a cool thing.

  • Leo Salazar

    Outstanding article! It reads like it was written with B2C in mind, but most of these would be equally applicable in B2B.  
    Numbers 1, 2, 6, and 7 are my favorites . . . oh, hell: I like the whole article!!! 

  • Lisa Ann Schreier

    Excellent article.  Should be required reading for everyone in the timeshare industry.  #1 and #6 are key if the industry has any chance of surviving.  Selling timeshare when no one likes to be sold and continually hiding details (if not out and out lying about things) have been the bane of the industry for too long.

    I also love Kerry's comment...if the timeshare industry really wants to make a change, they must stop recruiting from the same gene pool.

    I write about timeshare issues at Timeshare Insights and appreciate any ideas!

  • Kerry Lackey

    Thanks for the article - I'd like to add a number 8) STOP recruiting from your industry's gene pool. It's tantamount to marrying your cousins. No good will come of it! Be Bold. Recruit a Retailer into the Education Sector,  a Games Designer into the world of Talent Development, a Hospitality professional into the Property Market. Mix It Up. Employ fresh eyes.   

  • Gerry Som

    Kerry, you are a genius, bro. Sometimes, I learn from the comments as much from the article itself. Your words "STOP recruiting from your industry's gene pool. It's tantamount to marrying your cousins. No good will come of it! Be Bold." are brilliant.

  • Jamiel Cotman

    Number 4 and 7 were awesome.

    But I don't get number 5. All companies talk. And getting a machine to do it may not be ideal. TD Ameritrade just went public and has probably the best machine customer service robot out there. But this feels like the company dislikes or doesn't have time for their customers. Its sort of like a voice-mail. 

  • Veikko Punkka

    Regarding number 5, the implied listening is more important than the talking. If only the talking was important, the voice mail would be an extremely good idea.