What makes a day good ?
It varies, and today it was getting some jobs done that have been on my list a little while. Seeing end results that I'm very happy with. Starting future initiatives that look very promising, and resolving a long outstanding issue.
The day started well when I went out of my way to do something nice for another, and ended the day the same way. Come to think of it, the middle bits which all turned out well - they were simply the icing on the day.
Friday, March 25, 2011
Alliances & The Consumer
When two different organizations agree to cooperate there should be some benefit for their customers. Ideally, there's also some rationale to do it from their own business drivers too - lowered costs, higher margins, extended services and so on. But really, any thing proposed has to to pass the litmus test of customer benefit to be a real value - otherwise it's just a scam.
I've been thinking of the airline alliances a little these past few days, and am shifting back to the fence on them, as I'm not sure I see the value anymore - at least tangibly for the consumer.
In the spirit of full disclosure, I spent almost 20 years in the travel industry on the technology side, and while I was never directly engaged in an alliance creation or maintenance effort, I did deal with most of the world's airlines. So my opinion here is hopefully educated, and (also hopefully) not biased.
Airline alliance exist for a few reasons - it increases destination coverage as no single carrier flies everywhere; it helps maintain service on what are considered long thin routes (Cities far far apart) as it taps into the hub & spoke system of the participating airlines on both ends; and it helps expand the footprint of those companies, such that they can offer their loyal clientelle a similar service level that has been earned - when on a partner airline. Importantly, it also allows lays a foundation for pricing discussions on a given route between airlines, something out of bounds due to anti-trust laws in normal circumstances.
Here's a summary from the involved perspectives:
Airline
If my airline is small, and offers perhaps below average service; then to partner with a first class airline - a Singapore Airlines or Emirates is a tremendous win, as whenever my clients use the partners, they'll be thrilled. It's a little like being given a Rolls Royce loaner car when you take the Toyota in for service.
If however your 'home' carrier offers above average service, then most visits to the alliance will be disappointing - especially if the flights bought were under the guise of being your preferred carrier's flights. (called codeshare in the industry) If the actual interactivity between the airlines is also sub-standard - "regrettably you can't select seats as this flight is operated by another carrier, even though you're in first class"- then the whole alliance seems a sham to the consumer as the pre-travel and actual travel experience don't meet expectations.
I've seen the ugly underside of this lately a few times - being told that unfortunately the service levels entitled can't be offered due to the way something was bought, or will be operated - or my very favorite - "check at the airport because they break all the rules there, that we create here".
I don't mean for this to be a whinge about a decidedly first world issue that in importance ranks up there with adult braces. But I do want to highlight that when we lose sight of the customer benefit in whatever we're doing, we lose the plot. I fear airline alliances have jumped the shark as they say, as there is precious little that's positive for the consumer going on there lately.
I've been thinking of the airline alliances a little these past few days, and am shifting back to the fence on them, as I'm not sure I see the value anymore - at least tangibly for the consumer.
In the spirit of full disclosure, I spent almost 20 years in the travel industry on the technology side, and while I was never directly engaged in an alliance creation or maintenance effort, I did deal with most of the world's airlines. So my opinion here is hopefully educated, and (also hopefully) not biased.
Airline alliance exist for a few reasons - it increases destination coverage as no single carrier flies everywhere; it helps maintain service on what are considered long thin routes (Cities far far apart) as it taps into the hub & spoke system of the participating airlines on both ends; and it helps expand the footprint of those companies, such that they can offer their loyal clientelle a similar service level that has been earned - when on a partner airline. Importantly, it also allows lays a foundation for pricing discussions on a given route between airlines, something out of bounds due to anti-trust laws in normal circumstances.
Here's a summary from the involved perspectives:
Airline
- Ability to control price and supply with the other airline on a given route
- Ability to imply wider destinations served, without actually having to fly to them
- Ability to keep loyal high paying customers happy by extending the benefits offered beyond their own network
- Ability to have more direct services through code-shares (perhaps not on pref. airline)
- Ability to get extended coverage of benefits beyond everyday pref. airline
If my airline is small, and offers perhaps below average service; then to partner with a first class airline - a Singapore Airlines or Emirates is a tremendous win, as whenever my clients use the partners, they'll be thrilled. It's a little like being given a Rolls Royce loaner car when you take the Toyota in for service.
If however your 'home' carrier offers above average service, then most visits to the alliance will be disappointing - especially if the flights bought were under the guise of being your preferred carrier's flights. (called codeshare in the industry) If the actual interactivity between the airlines is also sub-standard - "regrettably you can't select seats as this flight is operated by another carrier, even though you're in first class"- then the whole alliance seems a sham to the consumer as the pre-travel and actual travel experience don't meet expectations.
I've seen the ugly underside of this lately a few times - being told that unfortunately the service levels entitled can't be offered due to the way something was bought, or will be operated - or my very favorite - "check at the airport because they break all the rules there, that we create here".
I don't mean for this to be a whinge about a decidedly first world issue that in importance ranks up there with adult braces. But I do want to highlight that when we lose sight of the customer benefit in whatever we're doing, we lose the plot. I fear airline alliances have jumped the shark as they say, as there is precious little that's positive for the consumer going on there lately.
Tuesday, March 22, 2011
Quiet Honour
Should we trumpet our contributions, or take personal satisfaction that we did the right thing ?
Do we need to let others celebrate us, so that we perform in a desired way again, or is it enough that we know -inside of ourselves - that the high road was taken, others helped and the world is a slightly better place for our toil.
I've been thinking about this, about a friend 8,000 miles away in a concrete shelter, and I have been wondering about the need for acknowledgment. It's polite to say thanks if you are helped in some way, but when the circumstances demand that you step in and do your best to help your fellow person, is thanks even required ? Instead, its a chance to prove that we're all in this together. If disaster befalls your fellow person, isn't it your duty to assist, to try to help lift the burden of the damage done to them. It's the raison d'etre of the Red Cross's of the world and it's something we should take quiet pride in.
This isn't a back-handed way of giving ourselves a pat on the head, but rather a case I'd put forth that says doing the honourable thing, the right thing to help another isn't something that demands reward or recognition. No more than we congratulate each other for breathing, it should be expected, it should be natural to us, and the compassion for one another should run deep and without expectation of return.
I read an older article by Kevin Myers that originally ran in the Sunday Telegraph in 2002. Here's the link. It's worth a read as it's a poignant example of what I'm trying to capture here. It's a logical extension of asking not what our countries can do for us, but what we can do for our fellow man as the wise man said.
Once it is done do not brag about it, for true honour is earned quietly.
Do we need to let others celebrate us, so that we perform in a desired way again, or is it enough that we know -inside of ourselves - that the high road was taken, others helped and the world is a slightly better place for our toil.
I've been thinking about this, about a friend 8,000 miles away in a concrete shelter, and I have been wondering about the need for acknowledgment. It's polite to say thanks if you are helped in some way, but when the circumstances demand that you step in and do your best to help your fellow person, is thanks even required ? Instead, its a chance to prove that we're all in this together. If disaster befalls your fellow person, isn't it your duty to assist, to try to help lift the burden of the damage done to them. It's the raison d'etre of the Red Cross's of the world and it's something we should take quiet pride in.
This isn't a back-handed way of giving ourselves a pat on the head, but rather a case I'd put forth that says doing the honourable thing, the right thing to help another isn't something that demands reward or recognition. No more than we congratulate each other for breathing, it should be expected, it should be natural to us, and the compassion for one another should run deep and without expectation of return.
I read an older article by Kevin Myers that originally ran in the Sunday Telegraph in 2002. Here's the link. It's worth a read as it's a poignant example of what I'm trying to capture here. It's a logical extension of asking not what our countries can do for us, but what we can do for our fellow man as the wise man said.
Once it is done do not brag about it, for true honour is earned quietly.
Monday, March 21, 2011
USP's
What makes your company unique ? What is your Unique Selling Point ? Said another way, why should people buy from you. This speaks to the core of the offering you come to market with. It also distinguishes your offering from that of other companies.
Some are obvious - Dollarama, Walmart and Ryanair are all the lowest cost providers, and accordingly draw in audiences and consumers looking to save money as they go about their lives. Others go for premium and exclusive audiences, by producing good and services that are out of reach or unattainable by many - Ferrari, Louis Vuitton or Virgin Galactic sell well through the conceptualization of rarity and being out of reach. Margins are higher on a unit basis in the latter group, but usually the cost of production is as well, to help justify the higher costs.
Most organization are in the middle though, hoping to be selected because they can provide some value that is viewed as unique to themselves. In rare cases, companies have a marketplace all to themselves - Cirque du Soleil for example which just surpassed $1B in annual revenue invented it's space and is seemingly without much competition. (That's a blue ocean strategy according to W. Chan Kim and Renée Mauborgne of INSEAD, but that's another topic). Mostly though, companies compete head-on with each other in the trenches, fighting market-share wars while trying to maintain profitably and revenue goals.
So, if we're head-on with our competition, how do we differentiate - or even more interestingly , do we need to. Ideally, there is something special about what we do - we're faster, more customizable, have higher service levels or even money back guarantees. Perhaps it's because we're ubiquitous. McDonald's is leveraging their location depth these days and starting to understand coffee is the way to get customers in the door - Can I get you a Big Mac with that Latte ?
If there's not something special about what we do, perhaps we're in a segment that is valuable in and of itself. They offer something we can't really do without. The computer hardware industry is like that I think. I'm not sure how the average consumer is supposed to see through the thousands of very very similar offerings from the likes of Dell, HP, etc. You could effectively configure the same machine on paper from any of a number of players, probably for similar price points. This represents the inverse of USP in a manner. Companies are soo alike, that they get a share of business just for being there. This principle is alive and well in many urban areas - fast food restaurants that are co-located, auto-malls and the like. Mobile telephone companies operate in a similar world - we're 'a viable alternative' or a 'me-too'.
So the next time you look for a company to buy from, decide if a 'me-too' is good enough to satisfy your need, or if you actually need something unique in whatever it is you are looking for. Me too is a busy little space where buyers often dictate prices, but its usually one size fits all.
Some are obvious - Dollarama, Walmart and Ryanair are all the lowest cost providers, and accordingly draw in audiences and consumers looking to save money as they go about their lives. Others go for premium and exclusive audiences, by producing good and services that are out of reach or unattainable by many - Ferrari, Louis Vuitton or Virgin Galactic sell well through the conceptualization of rarity and being out of reach. Margins are higher on a unit basis in the latter group, but usually the cost of production is as well, to help justify the higher costs.
Most organization are in the middle though, hoping to be selected because they can provide some value that is viewed as unique to themselves. In rare cases, companies have a marketplace all to themselves - Cirque du Soleil for example which just surpassed $1B in annual revenue invented it's space and is seemingly without much competition. (That's a blue ocean strategy according to W. Chan Kim and Renée Mauborgne of INSEAD, but that's another topic). Mostly though, companies compete head-on with each other in the trenches, fighting market-share wars while trying to maintain profitably and revenue goals.
So, if we're head-on with our competition, how do we differentiate - or even more interestingly , do we need to. Ideally, there is something special about what we do - we're faster, more customizable, have higher service levels or even money back guarantees. Perhaps it's because we're ubiquitous. McDonald's is leveraging their location depth these days and starting to understand coffee is the way to get customers in the door - Can I get you a Big Mac with that Latte ?
If there's not something special about what we do, perhaps we're in a segment that is valuable in and of itself. They offer something we can't really do without. The computer hardware industry is like that I think. I'm not sure how the average consumer is supposed to see through the thousands of very very similar offerings from the likes of Dell, HP, etc. You could effectively configure the same machine on paper from any of a number of players, probably for similar price points. This represents the inverse of USP in a manner. Companies are soo alike, that they get a share of business just for being there. This principle is alive and well in many urban areas - fast food restaurants that are co-located, auto-malls and the like. Mobile telephone companies operate in a similar world - we're 'a viable alternative' or a 'me-too'.
So the next time you look for a company to buy from, decide if a 'me-too' is good enough to satisfy your need, or if you actually need something unique in whatever it is you are looking for. Me too is a busy little space where buyers often dictate prices, but its usually one size fits all.
Sunday, March 6, 2011
The Value of our Competition
I'm a runner - sort of. By that I mean I have run seriously in the past, and plan to do so again in the future. I have the kit, and the capability, but today am lacking the right weather. I guess you could say I'm a fair weath
er runner. But that's another blog post - for now, let's just take it as accepted that I'm a runner.
When I run, I am faster, and more focused when I run against a goal - that could be a time, a distance, but ideally it's another runner. I'm a tad competitive, and so want to push myself harder when I see another - to catch them, pass them, and keep my pace up. I realize this (as a runner) and seek out competition.
In other aspects of my life, I see the same behavior traits manifest themselves, and seek out competition where I can find it. I know my own performance in whatever it is I'm doing is enhanced when I have a competitive motivation. "Winning" isn't the end game in these situations, rather it's the ability to harness a latent aspect of how I was built to push harder, to do a better job and be favorably compared.
I think marketplace's experience companies behaving like this as well, however with a strict set of market dynamics blinders on, most companies don't understand the value (to themselves) of their own competition.
I was reminded of this today, when I heard that the market-leading dominant airline in my part of the world, would be starting service to an under-utilized, previously ignored little airport that happens to the home base of a start-up airline that's making some PR and other waves. This move to serve this airport is intended as a 'kill-shot' to the start-up. This start-up is doing what any small business needs to do - it's trying to get attention for itself by screaming from any available rooftop about it's services and trying to sway customers away from their obvious choice - the frequencies, loyalty programs and the fact that you can't get around the country without getting onto the major carriers' planes. They've an uphill battle - the list of failed start up airlines going up against this incumbent player is long and not particularly illustrious.
The story and lesson here isn't the new little carrier though, it's the impact on the established player of competition. Like any established player that has marketplace dominance, when it doesn't feel threatened, it gets complacent and lazy. It is one of the most loved and and also most hated organizations in my nation. It can be pretty cutting edge, and offers fantastic levels of service and value at times...its' people are innovative and push to make the customer experience memorable at times. But when it's not motivated to keep its customers - those are the days when you're lucky to get where you're going, lucky not be snarled at, and probably much poorer for the purchase of their offerings. They tend to fall back into "screw the client" mode very fast.
You see we like it as customers when an organization understands it needs to earn our loyalty, and keeps trying to impress us as we are involved with them. It makes us come back - pointedly it makes us not want to try the untested new player in town - and stick with what we know works well. Our marketplaces have a few of these spectacular providers around - but they stand out because they are so rare. What Tim Horton's, Disney or Zappos understand is that competition makes them reach farther, push harder and it makes them better at what they do. It helps them ensure that they don't get complacent and lazy and they see they ought not to try to kill off the competition, but rather they should learn from it and adopt its best practices (and a fair share of their competitor's customers).
You see the greatest value as consumers we can get from a providor is the understanding that they need to continually earn our custom. The smart organization leverages it's competition to provide that motivation.
er runner. But that's another blog post - for now, let's just take it as accepted that I'm a runner.When I run, I am faster, and more focused when I run against a goal - that could be a time, a distance, but ideally it's another runner. I'm a tad competitive, and so want to push myself harder when I see another - to catch them, pass them, and keep my pace up. I realize this (as a runner) and seek out competition.
In other aspects of my life, I see the same behavior traits manifest themselves, and seek out competition where I can find it. I know my own performance in whatever it is I'm doing is enhanced when I have a competitive motivation. "Winning" isn't the end game in these situations, rather it's the ability to harness a latent aspect of how I was built to push harder, to do a better job and be favorably compared.
I think marketplace's experience companies behaving like this as well, however with a strict set of market dynamics blinders on, most companies don't understand the value (to themselves) of their own competition.
I was reminded of this today, when I heard that the market-leading dominant airline in my part of the world, would be starting service to an under-utilized, previously ignored little airport that happens to the home base of a start-up airline that's making some PR and other waves. This move to serve this airport is intended as a 'kill-shot' to the start-up. This start-up is doing what any small business needs to do - it's trying to get attention for itself by screaming from any available rooftop about it's services and trying to sway customers away from their obvious choice - the frequencies, loyalty programs and the fact that you can't get around the country without getting onto the major carriers' planes. They've an uphill battle - the list of failed start up airlines going up against this incumbent player is long and not particularly illustrious.
The story and lesson here isn't the new little carrier though, it's the impact on the established player of competition. Like any established player that has marketplace dominance, when it doesn't feel threatened, it gets complacent and lazy. It is one of the most loved and and also most hated organizations in my nation. It can be pretty cutting edge, and offers fantastic levels of service and value at times...its' people are innovative and push to make the customer experience memorable at times. But when it's not motivated to keep its customers - those are the days when you're lucky to get where you're going, lucky not be snarled at, and probably much poorer for the purchase of their offerings. They tend to fall back into "screw the client" mode very fast.
You see we like it as customers when an organization understands it needs to earn our loyalty, and keeps trying to impress us as we are involved with them. It makes us come back - pointedly it makes us not want to try the untested new player in town - and stick with what we know works well. Our marketplaces have a few of these spectacular providers around - but they stand out because they are so rare. What Tim Horton's, Disney or Zappos understand is that competition makes them reach farther, push harder and it makes them better at what they do. It helps them ensure that they don't get complacent and lazy and they see they ought not to try to kill off the competition, but rather they should learn from it and adopt its best practices (and a fair share of their competitor's customers).
You see the greatest value as consumers we can get from a providor is the understanding that they need to continually earn our custom. The smart organization leverages it's competition to provide that motivation.
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