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Words of wisdom from writer David Handler.

What did you learn today from a mistake?

Last Thursday morning I had the privilege of opening the Mailing and Fulfillment Services Association’s Annual Conference in Charleston, SC. This year’s theme, Convergence, was embodied in this first session entitled Seizing Opportunities of a Converging Direct Marketing Landscape. The companies in attendance would be hoping to find ways to diversify their offering in order to minimize the impact of lower mail volumes, print on demand (which has cannibalized their print), warehouse and fulfillment business and the onslaught of digital communication in general. Many are looking to add integrated cross channel solutions incorporating email and personalized landing pages to increase the value of the direct mail they produce today. This too, is the goal of their counterparts in the printing industry, many of whom have already embarked on a similar path. What happens when this path gets more crowded?

When access to the same service is not scarce, the price comes down.  So I went back to some resources from which I have gathered inspiration for past speeches – Blue Ocean Strategy by W. Chan Kim  & Renée Mauborgne and The Dip by Seth Godin. From Blue Ocean Strategy comes the concept of value innovation, which occurs when the competition is made irrelevant by creating of a leap in value for buyers, which opens up “new and uncontested market space.” Southwest Airlines established just such a leap by removing aspects of the then airline industry value proposition, not adding more to the mix. Using a contrarian approach, they took away meals, seating choices, lounges and hub connectivity, which allowed them to lower their price point. Then they added something from Seth Godin’s bible – they created something remarkable with a whole new brand of customer service and created an uncontested market, not with air travelers but with those traveling by car.

In The Dip, Mr. Godin proclaims that the mass market is dead, replaced by millions of micro markets, each one of which can have a clear market leader.  Instead of toiling away, trying to be all things to all customers, an opportunity exists to establish one’s company as a clear leader in a micro-niche. 

What aspects of your service offering can be eliminated from the mix, to provide certain segments of customers a unique value? The key to thoroughly examining any opportunities that exist is to create a leap of value like Southwest is to take the time to understand what customers in each niche need to be successful in their mission and to examine your offering for aspects where there is opportunity to be the best at something.  Instead of being mediocre at a large number of things, is there a market or an aspect of what you provide that could be truly remarkable? What we think of today as traditional market boundaries and industry structure don’t have to be fixed. They can be reconstructed by the actions and beliefs of industry players according to the authors of Blue Ocean Strategy.  The complexities created by digital communication and a depressed economy may be fertile ground for creating quantum leaps in value for our customers and our businesses simply by examining what may no longer be necessary in our offering.