Are You Really Different? Really?
Today’s marketplace is more competitive than ever. Increasingly the time for your competition to adapt to your new innovations is growing shorter and shorter. Yet some companies are finding ways to continue to stand out and draw in consumers. It is worth asking why?
I believe the companies that have a truly defendable competitive advantage are those that understand where they create value. One of the key principles of Plan B Philosophy is to understand where you create value for your customer and be relentless in pursuing that proposition, even as tactics in delivering that value must continually change in the market.
Yet there are key features and functionality that our competitors are offering every day. They, too, adapt to changing information and find new ways to create value. Let’s be honest, the guys on the other side are usually pretty smart as well. To stay ahead, we must continually adapt in providing more value to our customers.
As we all face new features, new competitors and a changing marketplace, we must really ask ourselves, “where do we need to emulate our competition and where do we need to differentiate?” To say it another way, sometimes we need to offer a product feature to remain competitive – it becomes table stakes. Yet, matching point for point each of your competitors is a recipe to be out of business. It’s clearly not sustainable, and as Herbert Stein once said, “If something cannot go on forever, it will stop.”
So as we think about how we compete, it is important to think about where we can differentiate.
Think about customer service. In the world of financial services, many people talk about having “great service.” But what does that mean? First, you have to define what, in fact, is “great service?” Is it always giving me the answer I want? Is it answering my call on the first ring? Is it talking in the same accent that I have? There are many definitions of great service.
But think about the math. Let’s divide service into average, good and great (we’ll ignore fair and poor for now). If most people are average, some are good and just a few are great, it is impossible for everyone to have great service. It’s like the old joke about Lake Woebegone, where all the kids are above average. Furthermore, “great” is a difficult place to sustain. If everyone raises their level of service, and you stay the same, you are no longer “great,” you are now just “good” or “average.” And do you have clear measurements of what “great service” is to you?
In the end, a strategy of differentiation is hard. Mostly because it forces you to say that you are going to be mediocre at some things to be great at others.
At TMG Financial Services, we have spent the better part of this year defining what we want our cardmember experience to be. We know that we have to be competitive with our core credit card product offering. When a consumer lays out all of their credit card options on the dining room table, we can’t be deficient in any of the key areas – rates, fees, rewards or technology. It’s not like someone gets a credit card offer and says, “WOW, a credit card. I hadn’t thought about getting one of those. I might just try that.” That being said, it is impossible to be the absolute best in every single category.
We need to be top tier in all of those things, but you could find cards with better interest rates (albeit, maybe not with rewards) and a more robust rewards program (if you qualify for an AmEx Black Card – OK, so I’m biased). I love technology, but based on our cardmembers today and into the future, we are probably not going to be at the bleeding edge in technology (as much as it sometimes pains me). What we have defined is our service promise of being authentic, providing a personalized experience and having the best interest of our cardmember at heart.
It’s not an easy differentiation point, and one that we’ll have to work hard to deliver upon. However, if we can continue to deliver that experience, it is a clear differentiation in the marketplace – a credit card issuer you can trust and has your best interests at heart. Usually an oxymoron.
Anyone can argue whether our points of differentiation will work. That’s the hard part. What we believe are points of differentiation may not be perceived that way by the marketplace. If it’s not, then we’ll have to adapt. People continue to use our card for a reason – we need to better articulate that and build our entire operation around that value. It’s our point of differentiation. You have yours. But if you really look at it, are you trying to be super-competitive at everything? If you are, you may be making the point of Mr. Incredible, “When everyone is special, no one is special.”
I believe the companies that have a truly defendable competitive advantage are those that understand where they create value. One of the key principles of Plan B Philosophy is to understand where you create value for your customer and be relentless in pursuing that proposition, even as tactics in delivering that value must continually change in the market.
Yet there are key features and functionality that our competitors are offering every day. They, too, adapt to changing information and find new ways to create value. Let’s be honest, the guys on the other side are usually pretty smart as well. To stay ahead, we must continually adapt in providing more value to our customers.
As we all face new features, new competitors and a changing marketplace, we must really ask ourselves, “where do we need to emulate our competition and where do we need to differentiate?” To say it another way, sometimes we need to offer a product feature to remain competitive – it becomes table stakes. Yet, matching point for point each of your competitors is a recipe to be out of business. It’s clearly not sustainable, and as Herbert Stein once said, “If something cannot go on forever, it will stop.”
So as we think about how we compete, it is important to think about where we can differentiate.
Think about customer service. In the world of financial services, many people talk about having “great service.” But what does that mean? First, you have to define what, in fact, is “great service?” Is it always giving me the answer I want? Is it answering my call on the first ring? Is it talking in the same accent that I have? There are many definitions of great service.
But think about the math. Let’s divide service into average, good and great (we’ll ignore fair and poor for now). If most people are average, some are good and just a few are great, it is impossible for everyone to have great service. It’s like the old joke about Lake Woebegone, where all the kids are above average. Furthermore, “great” is a difficult place to sustain. If everyone raises their level of service, and you stay the same, you are no longer “great,” you are now just “good” or “average.” And do you have clear measurements of what “great service” is to you?
In the end, a strategy of differentiation is hard. Mostly because it forces you to say that you are going to be mediocre at some things to be great at others.
At TMG Financial Services, we have spent the better part of this year defining what we want our cardmember experience to be. We know that we have to be competitive with our core credit card product offering. When a consumer lays out all of their credit card options on the dining room table, we can’t be deficient in any of the key areas – rates, fees, rewards or technology. It’s not like someone gets a credit card offer and says, “WOW, a credit card. I hadn’t thought about getting one of those. I might just try that.” That being said, it is impossible to be the absolute best in every single category.
We need to be top tier in all of those things, but you could find cards with better interest rates (albeit, maybe not with rewards) and a more robust rewards program (if you qualify for an AmEx Black Card – OK, so I’m biased). I love technology, but based on our cardmembers today and into the future, we are probably not going to be at the bleeding edge in technology (as much as it sometimes pains me). What we have defined is our service promise of being authentic, providing a personalized experience and having the best interest of our cardmember at heart.
It’s not an easy differentiation point, and one that we’ll have to work hard to deliver upon. However, if we can continue to deliver that experience, it is a clear differentiation in the marketplace – a credit card issuer you can trust and has your best interests at heart. Usually an oxymoron.
Anyone can argue whether our points of differentiation will work. That’s the hard part. What we believe are points of differentiation may not be perceived that way by the marketplace. If it’s not, then we’ll have to adapt. People continue to use our card for a reason – we need to better articulate that and build our entire operation around that value. It’s our point of differentiation. You have yours. But if you really look at it, are you trying to be super-competitive at everything? If you are, you may be making the point of Mr. Incredible, “When everyone is special, no one is special.”
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