Category Archives: Consulting

September 29, 2016 · 9:52 am

57 Channels

Anyone with whom I speak these days has a lot to say about competition. Every business seems to have many more players going head to head for customers, and I suspect that nowhere is that more true than in the media business. The Boss wrote about “57 Channels And Nothing On” a couple of decades ago. He characterized it as having been “Shot back in the quaint days of only 57 channels and no flat screen TVs”, and 25 years later the average home can receive nearly 206 channels, according to Nielsen. What is instructive to anyone is business, however, is that they watch fewer than 20, or under 10% (19.8 channels, to be precise).

Obviously, consumers are spending just as much, if not more, time with video content. It’s not a matter of the video business being imperiled. What is a problem, however, is the manner in which the traditional business model operates. Video providers have bundled together dozens (hundreds!) of channels and sold them to consumers who really had very limited choices in breaking the bundle of channels apart. You’re beginning to see “skinny bundles” which focus on a few popular channels. Although I’m not aware of any “roll your own” packages in which a consumer can choose any channels and create their own bundles, they aren’t far off. Rest assured that if the cable and satellite guys don’t offer them, someone will.

Consumers aren’t rejecting TV – they’re rejecting a business model which forces them to pay for TV they don’t watch. That’s something that isn’t unique to cable and satellite. Fast food does it. You might end up paying more for something if you don’t want the fries or soda and, therefore, buy ala carte. Software companies do it. The music business did it (an album was always cheaper than buying the best songs on that album as singles). 5 years ago, researchers found that consumers might actually value a bundle less than they would value the individual component products. There was a “negative synergy” associated with the bundle. The key to successful bundling it seems is to provide an option to buy the individual components or the bundle. When that option isn’t there, sales actually declined significantly.

We can’t sit on existing business models anymore no matter what business we’re in. We certainly can’t force consumers to pay for things they don’t really want to get those things they do want. I’m watching the changes in the video business with great curiosity (and some degree of thanks that I’m no longer in it!). You?

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September 23, 2016 · 11:15 am

Following The Competition

This Foodie Friday I’d like us to think about something you’ve probably seen happen in your town. A restaurant will offer a dish that becomes insanely popular and suddenly everyone is offering their take on it. Cronuts, dishes with foams instead of sauces, or even stuffed burgers (Juicy Lucy’s) are examples. It’s not just restaurants either. One soda brand goes “clear” and suddenly everyone has a “clear” or “crystal” or something similar. The supermarket is stuffed to the gills with innovative products and the several follow-ons produced by competitors.

What does this show us? That businesses pay attention to their competition and are tracking what the other guy is doing. That’s good and important. After all, listening is a fundamental skill. Listening, however, isn’t necessarily reacting. Tracking isn’t following.

It’s not just in the food business. When Ecco had huge success with their hip spikeless golf shoes, suddenly every shoe company had a version. Of course, what the other guys missed was Ecco’s fashion sense, and some of the products were as bad as just wearing tennis shoes to play golf. Microsoft wasted a lot of time and money following Apple everywhere and producing their own versions of Apple products. Still using your Zune?

If you’re going to do your version of a competitor’s product, the impetus for that should be your customers’ expressions of need and not some knee-jerk reaction to what the competitor is doing. First, you might not understand how well the product is selling for the competition. Second, you don’t know what their costs are to produce the dish. Third, even if you do know the previously mentioned data points, you might produce an inferior version which damages your reputation and enhances that of the competition. Finally, and most importantly, follow your customers. Are they defecting to some other brand? Why? Is it to the new product or because you’ve taken them for granted in your haste to follow the other guy rather than them?

Paying attention to what the competition is doing is important but following them can be fatal. Follow your customers, not your competitors.

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September 6, 2016 · 11:32 am

What I Learned From My Week Away

I’m back! After a week away from the screed, I’ve returned to this space refreshed and ready. You might wonder how a week of not writing could be helpful to my writing. Ask anyone who writes regularly and they’ll tell you that writing’s like a muscle: if you don’t exercise it regularly it will atrophy. I have a bit of an issue with that and the reason why is something that might help any of us who are in business.

Sagittal human brain with cortical regions del...

(Photo credit: Wikipedia)

Writing is a habit. We all know that there are good habits and bad ones, but all of us have them. We might think of them as our daily routine and many of them we do without really thinking. If you’ve ever been driving a route you travel on a daily basis and gotten to your destination without remembering much about the trip, you know what I mean. As an article about a wonderful book called “The Power Of Habit” I read a few years ago said:

Neuroscientists have traced our habit-making behaviors to a part of the brain called the basal ganglia, which also plays a key role in the development of emotions, memories, and pattern recognition. Decisions, meanwhile, are made in a different part of the brain called the prefrontal cortex. But as soon as a behavior becomes automatic, the decision-making part of your brain goes into a sleep mode of sorts.

I broke my writing habit for a week because I felt as if I had gone into that sleep mode. There have been a few times recently when I began a post only to realize that I’d written something similar a few years earlier. My brain was actually working less. I’m willing to bet that either you or people within your organization are behaving in exactly the same manner. They are following the same daily routine in how they perform their jobs. Maybe they’re doing the equivalent of what I found myself doing – rewriting the same things over and over without really thinking or maybe just doing their jobs they way they’d always done them.

So here is what I learned. I am going to post a bit less often with an eye toward not having the screed be a habit. Rather than getting up each day and spending time reading news feeds in order to do my habitual writing duty I’m going to focus on finding fewer topics that resonate more with me and, hopefully, with you. Maybe that’s something you can think about with respect to you or your business: do less and in so doing, do more. Make it less about quantity and more about quality. After all, those of you who read this are my customers (and hopefully on the road to being clients!). Fulfilling my habit might have just been cluttering up your inboxes or taking a couple of minutes of your time without offering real value. That was a bad habit. What are yours?

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