What can we learn from what is going on around us?
- Too many businesses are suffering from five-year-old-itis.
- Businesses are running an out-dated business model based on five-year-old assumptions about who their customers are, what they want and what they are prepared to pay for it.
- Our five-year-old assumptions extend to what they buy and when and how and what influences their buying decisions.
Businesses that have recently suffered the ultimate indignity by keeping their heads well and truly planted in the sand include PC World, Blockbuster, Woolworth and Millets.
It is getting tougher out there for most businesses. Customers are smarter, better informed and less loyal than they had been. They no longer need to, and in fact they don’t, believe you.
So what is to be done?
Do not join the queue heading for oblivion by competing on price. As Michael Porter says, “Competing on price is a mug’s game unless you can afford go cheaper than the competition.”
What the outside world is telling us
- Don’t believe your five-year-old model.
- Recognise that the internet is not just a phase that only applies to youth brands.
- Remember that brands that deliver on quality can still do very nicely.
Sticking to the old model is what has driven so many businesses into the ground. When 54% of people have more online interaction than offline interaction, it is time to wake up and smell the coffee.
Robert Craven is an expert contributor to Marketing Donut. Robert shows directors and owners how to grow their profits. As well as running the Directors’ Centre, he is a keynote speaker and the author of business bestseller Kick-Start Your Business. His latest book is Grow Your Service Firm.