Every company I’ve ever worked with (or for) that shifted its focus from innovation and market leadership to playing it safe and letting their competitors take chances with new technologies, designs or business endeavors saw their brands erode faster than beach-front property in a hurricane.
The pattern is always the same:
1) Decide that innovation is too risky or costly or time-consuming.
2) Settle into a reactive – follow-the-leader – mode. Let other companies innovate and test the market for you.
3) Find yourself playing catch-up (get used to being 6-18 months behind the market leaders for all product releases and rolling out new services). Lose relevance.
4) Within two years, watch your sales drop, your contract renewals crumble, and your margins erode.
5) Realize that the most direct effect of brand erosion is finding yourself having to compete at lower pricepoints (i.e. against those pesky asian imports).
5) Start discounting products and services to compete against second and third-tiered “competitors” you never had to worry about before.
6) To reduce costs, part ways with your best vendors and settle for cheaper ones.
7) Outsource manufacturing and/or other business functions – like customer service – to a lower bidder (usually overseas somewhere).
8) Start having to deal with lower and/or inconsistent quality: More returns, more complaints, increased costs of doing business – further margin erosion.
9) Start having to deal with inconsistent deliveries, back-orders, etc.
10) Erosion in customer satisfaction = erosion in customer referrals = erosion in customer retention.
11) Increase advertising and PR budget to counterbalance negative image and try to regain market share.
12) End up spending more on useless Marketing and PR than on actually building a better company.
13) After a few years of steady brand erosion, get suckered into spending tens or even hundreds of thousands of dollars to update your logo and tagline in an effort to re-brand yourself.
And so on, and so forth. The pattern is ALWAYS the same.
So… be careful. Don’t assume that innovation and great ideas are too expensive to develop or to complicated to put into action. That kind of thinking is not an option. Don’t settle for being reactive when you should be proactive. Don’t just hire people who will manage workloads: Hire people who will give you an edge over the rest of your industry. Change your mindset. Redefine your purpose.
Drive your company’s evolution – Not next week or next quarter, or next year, but today. With your next project meeting. With your next marketing campaign. With your next design. With your next hire.
It isn’t all that hard. It starts with the decision to just be better.
So just be better.
Have a great Tuesday, everyone. 😉