In my experience one of the best tests of a good strategy is clarity around what you won’t do. However, this is also where a lot of organizations struggle–profit and non-profits alike. Because after all, aren’t you in business to cultivate customers? So don’t you want to do what your customers ask of you?
Maybe, but maybe not. In last weeks blog, we discussed how to define your target customer. Not all customers are created equal and neither are all of their requests. I am working with a company now that says they charge a very small premium because they provide higher quality of service. But at the end of the day they are asked to match price–and they do. So are they a “low price” provider or a “high quality product excellence” company. You can’t really organize your infrastructure to be both. So when they take the price match deal, they just give away margin. Too much of that and you can’t stay in business.
What does your strategy say is NOT part of the mix? If you can’t say, you need to go back to your target customer assignment and answer who ISN’T your target customer and what wants of your current target are you NOT going to provide because they are outside your area of expertise? To get you started, consider this:
1. Southwest won’t feed you a meal
2. Lexus doesn’t compete with all other car manufacturers on price.
3. My clients CEO’s must be committed to change to achieve growth
4. Zappos will not cut customer service quality
5. Target will not compete with Walmart on price
List the customers you won’t serve, the products you won’t offer and the capabilities you will not undermine. Then stay the course.