Me-Too Solutions Don’t Reignite Growth

The challenge in many industries is that there are many providers offering essentially the same solutions. Banks and law firms are often hard to differentiate—they tend to provide the same or similar services, target the same customers and industries, and compete based on the same strengths. Banks talk about customer service and lawyers focus on experience. Both emphasize integrity and trust. Yet what really sets them apart?

Banks tend to divide into a few major categories: large, international banks with full service; or smaller regional and community banks with knowledge of the community, tailored services, an emphasis on relationships, and localized decision making. That being said, just about every bank takes pride in customer service. In fact, most of the banks I have worked with cite customer service as their differentiator, what sets them apart from the competition. Yet, when asked how their service varies from the bank down the street, they can’t say.

While it is starting to change, bank customer service departments are all trained to sing out of the same song book. Mystery shoppers, whose job it is to verify the service delivered to the customer, use nearly identical criteria (that are developed by the banks themselves) to evaluate the performance of individual employees, and thus overall customer service. It is a twofold problem: not only does that mean banks are not unique in how they define their differentiator, they are also training on variables that are not important to today’s consumers. Mystery shopper sheets want to know if the bank official greeted them by name, looked them in the eye, and said thank you at the end of the transaction. These are not major influences in customer satisfaction today; the number one reason people change banks is because of problems that were not handled well or are persistent (from the customer’s perspective, of course).

When competitors do not provide tangible differences in their products and services, purchase decisions are made based on price. So consider the scenario of one bank offering a better CD rate. Who does that appeal to? Price-conscious customers. However, one of the challenges of most banks is getting customers to increase their average number of services (usually from less than two to two or more), which increases the bank’s profitability on the individual customer. If the bank attracts a customer with a better CD rate, how likely is that customer to convert their other, more sticky services to the new bank? Are they just as likely to leave next month when there is a better CD rate to be had elsewhere? Is advertising better rates an effective plan? The real goal needs to be to generate new multi-service customers, not just new customers.

So what are some unmet needs of banking customers? Not long ago, I did a survey to find out. Here are some things banking customers would like:

  • Be more integrated with Quicken and similar financial tools.
  • Have faster turnarounds on inquiries.
  • Assign one person to me that I always deal with.
  • No fees for accessing my money.
  • Show me all of my accounts on one screen.
  • Let me customize the screen on which I view my accounts.

Some banks may already be offering these services. Clearly banks are using technology as an enabler of new solutions. Much more change is to come. However, banks that offer solutions fine-tuned to the needs of a particular segment that they are uniquely positioned to serve means the bank’s growth will come from their strengths, increasing their financial success and customer satisfaction at the same time.

“Me-too-ism” is a dangerous disease. Businesses follow the leader in their market, feeling like they need to add the service or product just announced by their competitor. In doing so, they add more cost but level the playing field, meaning both companies now compete with no advantage and a higher cost structure, reducing margins. This never-ending spiral creates increased profit hurdles for which the only answer is to step out of the race and take a different path. If not, the company with the deeper pockets wins.

Chances are you already know if your company has this particular strain of challenge. It is pretty easy to identify. However, if you are not sure, ask customers. If they can’t tell you how you are different or better than your competitors, or what problems you solve or needs you meet that others don’t, then chances are you are playing the me-too game and it is time to get out of it. In the words of Texas Bix Bender, “Just ‘cause you’re following a well-marked trail don’t mean that whoever made it knew where they were goin’.”

When an organization is ready to challenge the status quo and chart a new course, they need to unhook themselves from assumptions about what they can do or how they should do it. They need to be able to read the market landscape, not just what it is doing today, but where it seems to be going. They need to look for that intersection between what the company does well and what the customer needs that will increase their effectiveness in the market.

The printing industry is being tested to do just that. The CEO of a well-established printing company approached me with the words, “This is the first time I don’t know what to do.” He had always successfully navigated the twists and turns of the market but technology was eroding the market for his whole industry, not just his business.

What the executive didn’t see was his future was right there in front of him. He had done two remarkable things already. Since he was an entrepreneur he had invested in developing a data portal that captured hard market data that helped him serve his clients. To do that, he bought a small technology company. All that was needed was to turn the company upside down.

The data they captured on behalf of the clients indicated which client products were selling best and in which part of the country (because they had to print different versions in different geographies). As the local offices placed reprint orders, changes to what was needed—what and how often—were captured. Now the printer knows more than the client about what was selling at the local level and the macro level by aggregating the data. In this new age of Big Data, that information was worth a great deal. How could they begin to market that feature so that they are able to add to the success of their clients and no longer just be a “pass-through” of getting information to the marketplace? In doing so, they elevated themselves to be much more than a printer, and can begin to charge for value-adding services, craft other data collecting technologies, and broaden the range of communication they assist the client with, enabling the client to reach its customers with the right product in the right place.

Excerpt from new book Reignite: How Everyday Companies Spark Next Stage Growth

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