In our rush to see business through customer-centric lenses, we have a tendency let go of some valuable product-centric insight. A past client that asked me to return for a new initiative just reminded me of the value in holding onto some “old” business concepts and techniques – in this case focusing on the product lifecycle rather than the more popular (and trendy) customer lifecycle.
This company’s industry took a severe regulatory hit that all but eliminated the largest of four related industry sectors. And the larger two of the remaining three continue to shrink from Internet competition. Now the stronger industry players are trying to morph into “something other,” creating a “new” – or more accurately “enhanced” – service sector. The jury is still out on their success. Weaker players are going away. But in the face of all these departures in a shrinking industry, my client decided to plant both feet in the smallest of the four industry sectors, the one with historically weakest service delivery because it’s hardest to provide – but a service sector they’re confident they can grow by raising service quality.
Gutsy move. But certainly not without precedent. Depending on which version of product life cycles we learned, we might label this dozens of different ways, but I’d call it the “last act standing” strategy. Much bigger piece of a smaller pie (and not as many forks). Ample customer need for the foreseeable future fortified by opportunity to grow demand. Plus opportunity to move smartly into the “enhanced” service category, but with a cornerstone service for many customers that competitors have either abandoned or deemphasized. Wise move. But a move you’re unlikely to make if you’re thinking all customer all the time.
For an analogy, think about incandescent light bulbs. Who would invest in incandescent bulb manufacturing today? Try a really smart operator with impeccable timing, While on one hand I’d shudder at the thought of investing in picking up where GE is leaving off, on the other I’d rub my hands with glee at the thought of being the last incandescent bulb maker standing, or even the strongest of the last few. Demand won’t dry up for a long, long time. And margins will grow as competition declines.
If you abandon the past and only focus on more fashionable customer-centricity and customer life cycles, you’ll miss opportunities like these.