Doing Business in Real Time
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The global economy has a life of its own, it lives in real-time, and we are all part of it. Hello brave new world.
Business Agility is Based on Trust
“Go after a competitor’s customers. A downturn stretches companies to the breaking point. Find unprotected areas and exploit them.” These are words of agile business wisdom. A reader of this blog dangled these sentences in front of me thinking I might be interested in hearing more. As a student of the art and strategy of business agility, they got my attention.
I met the speaker of these words for breakfast recently with the understanding that I’d ask questions and listen and if something interesting happened I’d write about it. I met with Jonathan Copulsky, a principal in the Chicago office of Deloitte Consulting who leads their customer and market strategy practice. Accompanying Jonathan was Lauren who is a public relations manager at Deloitte. In the course of our (at first rather predictable) conversation, suddenly, something interesting did happen.
I began by asking my usual leading questions. I’m shameless in pursuit of evidence and opinions to verify things I already believe (things like the need for business agility now more than ever; see my post “A Formula to Measure Business Agility”). All I can say in defense of my behavior is that it’s so blatant most people can see me coming a mile away. And a smart player can use this to his advantage. Jonathan was certainly able to hold his own and our conversation had the quality of a friendly wrestling match as he maneuvered to get across his own message (which was not always the message I was looking for as signaled by my persistent leading questions).
HOW TO TAKE A COMPETITOR’S CUSTOMERS
The conversation began to get interesting when I suggested we do a little role playing. I said I would play the role of CEO at a large manufacturing company and Jonathan would play himself.
“So tell me about how I can go after my competitor’s customers”, I asked using my most serious CEO voice. “Tell me how I can find my competitors’ unprotected areas and exploit them.”
In the exchange that followed, three points emerged. The first point is that pricing is a strong lever to use in going after a competitor’s customers. Upon hearing this I sat back in my chair and inquired if that basically meant I should engage in price wars with my competitors. (This was a leading question.)
A fiercely held belief of mine is that price wars are bad because they wipe out profits and thus destroy markets. I believe agile businesses avoid price wars by using customer focused IT applications to understand evolving customer needs and desires. Then they offer customers bundles of products and services tailored just for them and customers will actually pay a bit more, not less, because those bundles provide them with more value.
The answer to my price wars question established the second point – use price to attract customers by unbundling the different components of your product pricing and let customers select the combination of products and services that best fits their needs and their budget. I agreed with this (it backs up my beliefs about how agile companies respond to constantly changing markets and how they grow their customer base).
Staying in my CEO role (and seeking more agreement with my beliefs about agility), I asked whether customers would be willing to pay more for selected services wrapped around my company’s products. There was a pause. Jonathan replied that customers do like more services but these days they might not be willing to pay more to get
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