Subscribe
Our Thoughts
THEY MAKE US THINK
INSPIRATIONS

Art, Meet Commerce - A Blog

Entries in Amplify (2)

Wednesday
May062009

The Best Business Is In The Eye of the Beholder

I don’t read USA Today.

Its bite-sized editorial style limits the depth of its reporting. There are better ways to get in-depth analysis on the stories they cover. And faster ways to get the box scores. In the real world it suffers from being inconvenient and a limited experience.

Chris, my wife and partner, does.

But only when she flies. And then from cover to cover. Because in that environment it is convenient, and its broad approach to news gathering becomes a vibrant alternative to anything else you might do. And inevitably she teaches me something when she’s finished.

Back in 2006 she taught me about fidelity and convenience. An article in that day’s edition by Kevin Maney introduced the concept to us for the first time. We were fascinated then and I’ve kept it in the back of my head until now.

Kevin’s thesis is that when consuming media, we instinctively evaluate the fidelity of an experience in the context its convenience. Watching a live U2 concert is high fidelity but low convenience. Transistor radios are low fidelity and moderate convenience. The theory goes that iPods took off because they filled a gap. Better fidelity than other portable alternatives. Incredible convenience.

And the same applies to movies. The initial introduction of television in the 1950s decimated movie box office sales. In 1950, three billion movie tickets were sold in the U.S. Ten years later that number had halved. By 1970, it was down to a billion. The movie industry’s response was to use emerging technology to create special effects blockbusters and big-scale productions that television couldn’t provide. You may have seen Star Wars.

By 2003, movie sales were back up to 2 billion a year, - despite the fact that everything on tv was now in colour, there were hundreds of channels and portable sets would fit in your jacket pocket. The TV manufacturers responded by improving home viewing systems so that movie night at home was a higher fidelity experience and then let convenience tilt the equation back in their favour.

The movie industry’s response? 3D iMax. Fidelity. Pre-assigned seating and in-seat waitress service. Convenience.

Anyone in the advertising and creativity on demand business instinctively recognizes the ying and yang of this. Traditional advertising is moderate to low fidelity. But convenient. Excessively so, in that we can get as much of it as we want whenever we want. In that industry the challenge is to improve the quality of the user’s experience while making advertising more convenient to the recipient - on their terms. After all, advertising is most convenient when we’re in the market for that which is being advertised. Or in the mood to be wooed. Good luck to whomever is working on that algorithm.

But I think the fidelity and convenience equation has an even more powerful role to play in designing better businesses. Which is one of the things I care about most.

Think about your business for a second. Do your customers have a high fidelity experience when they work with you? Or do you provide convenience?

Not sure? Or worse, do you think it’s both? Whatever your answer, your customers do not use use you because you are both the best and the most convenient.

In which case, you have a big opportunity.

If you provide a service, I believe it’s important to aspire to be the best. Those standards keep you moving forward. Keep you looking to improve.

But if you sacrifice the opportunity to be more convenient to your customer in the quest of being the best you will ultimately lose. Because someone will come along who is as good, or nearly as good, and more convenient. And that combination wins 9 times out of 10.

The only way you win by being the best is if your pricing premium is high enough to offset the 9 opportunities you are losing. In this economy, that won’t work.

So look at all the ways in which you can become more convenient to your customers. Think about your business from their eyes. What would make their lives easier - the ultimate definition of convenience.

Provide that without lowering your standards. And you might just create that 3D iMax in my living room experience that I’m waiting for.

Saturday
Mar212009

Bravery + Strategy = Innovation

In late November a client of ours came back from a meeting with one of his biggest customers. He was visibly shaken. Hardly surprising given that they’d just told him their 2009 projections were based on a forty percent drop in revenue. They’d need a lot less from him. Forty percent less.

It was about then that we were all beginning to realize the world had changed. That the futures we had all expected weren’t going to happen. That this wasn’t a recession, or a downturn. That this was life changing.

The auto industry is living through its life change in public. And the debate about whether we should or should not be bailing out the big three will continue until someone asks better questions. ‘What do customers want?’ seems like an obvious one. In an industry experiencing a forty percent decline in sales, the answer apparently is, ‘not this’.

With one exception. Hyundai.

At the beginning of this year, the company launched a program that guarantees they will take back any car bought in 2009 if the customer loses their job.

At a time when cutting costs was everyone else’s strategy, Hyundai made theirs reducing risk. At a time when their competitors were asking for government money to survive until the upturn, Hyundai believed they could create an upturn themselves. At a time when customers wanted confidence, Hyundai made a simple, human statement. ‘We believe in you.’

Hyundai’s sales compared to a year ago? Up 4.9 percent. Number of cars returned? Zero.Cost to Hyundai? Zero.

When all around you are losing their heads, you need both courage and clear thinking.

The result is almost always compelling.