What does it take to be competitive today?
I see dozens of articles and books each week that claim to have the answer. Is it becoming a social business, selling your product online, or offering the lowest price?
The Global Leaders of Customer Experience Management Survey reported that 85% of senior business leaders agreed that “price, delivery, and lead times are no longer effective marketing business strategies.”
Take the retail business as an example.
“Showrooming,” the practice of browsing or trying merchandise in a store while checking competitive pricing on your smart phone, is becoming a common scene that’s negating the effectiveness of price as a competitive advantage.
According to a Harris Poll survey, 43% of Americans adults “showroom” while shopping in stores.
And there’s no end in sight for this trend; an IBM Digital Analytics study reported that the use of smart phones to access a retailer’s site has increased by 70% in the last year.
When access to competitive product information such as availability, options, and pricing is available at the touch of the consumer’s finger – from within your own store – what constitutes a competitive advantage?
You can bank on having the lowest price, but that’s rarely a constant. Showrooming is forcing the average price of all products down because of the ease of access consumers have to comparison shop via their phones.
You can bulk up your stock with colours and sizes not available at your competitors, but that will just serve to increase your overhead costs and decrease your product and cash turnover.
Our technology-powered, over-connected world has created an environment where customer experience is your last hope for a competitive advantage.
Customer Experience is the Only Competitive Advantage Left
Starbucks offered free WiFi in their cafes, a move that was highly criticized at first. Business analysts argued that it would encourage customers to sit for too long, decreasing the option for high-turn customers to get access.
Starbucks understood that while it may have increased costs, it was the customer experience that modern consumers needed to choose Starbucks coffee over its competitors.
Those that once shunned the practice have now followed suit.
Today, free WiFi is as common at restaurants from cafes to pizza joints and posh eateries as water and bread.
“What’s your WiFi code?” has replaced “do you have WiFi?” as one of the first questions asked when entering a restaurant.
Building an amazing customer experience – physically in the store and externally across social media – may prevent consumers from even considering showrooming. American Girl Place is an example of such a business.
In a highly competitive space, this manufacturer/retailer has learned to sell customer experiences, not products – experiences which can’t be cross-referenced on a smart phone.
Within these stores (not sure they can be called stores frankly), your children will find bistros with seats for themselves and their dolls.
Dolls are served with doll-sized cutlery and china cups. If something goes wrong with the doll, such an arm falling off, there is American Girl doctor on stand-by to heal her.
When everyone is well, the doll and her entire family can attend the American Girls Revue at the American Girls Theater, which is a 70-minute stage product. Seriously.
Customer experience means different things to different consumers. It can provide a sense of community, entertainment, or fulfill human needs such as belonging and safety.
Whatever that experience is for your customers, know that price, delivery and quantity are no longer the competitive advantage they once were.
Technology and social media has seen to that.