Design_at_the_edge

Will 15 copycats cut fringe benefits?

11:06 02 June 2007
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We have a new shopping street in Knutsford. Not very often a small town gets a complete infrastructure upon which to build a new system, which also has to integrate with the rest of the community. Little surprise that our local rag, the Knutsford Guardian, has highlighted the latest decision of the developers to lease a shop to Tony and Guy making it the 16th hairdresser in town...and you can walk past all of them on a 10 minute walk! Which is just an example of the 'surplus society' that Kjell Nordstrom and Jonas Ridderstrale, wrote about in Funky Business 

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar things, with similar prices and similar quality.”

They went on to assert

“In the funky village, real competition no longer revolves around marketshare. We are competing for attention – mindshare and heartshare.”

Susan Abbott at Consumer Experience Crossroads posted this very relevant list about the difference between product and service

What's the difference between a product and a service, really?

Here's a nice definition for a service:

"Any act or performance offered that is essentially intangible and does not result in ownership of any thing"

                    - Prof. Brian Engelland, MSU

There are many more attributes that we can dig down into, however, to understand why services and products are very different. Here's my list.

You are dealing with a service when...

[1] Production and consumption are hard to separate. Examples: travel, investments

[2] Intangibles form a large part of what is being purchased. Examples: insurance, consulting

[3] There is no change of ownership. Customers typically rent a service, rather than owning it. Examples: credit card or loan, hotel room

[4] A sale that does not happen today cannot be recovered in the future. Examples: empty seats in a theatre, lost interest on a mortgage

[5] Customers must evaluate the purchase decision with few tangibles to go on. Examples: health care

[6] Output quality is variable, and depends on the performance of individuals. Examples: Hair styling, interior decorating, surgery

[7] Manner of dress, body language, and expressed language form part of the brand experience.  Examples: air travel, retail banking

[8] Cycle of purchase is repeated through 'rental payments'. There is no smooth movement through a consumption cycle, and there are frequent 'moments of truth'.  Examples: health club membership, anti-virus software rental, weight-loss groups

[9] Employees behavior and knowledge is central to delivery and quality. Examples: financial planning

[10] The memories of the experience may be as important as the experience itself. Examples: vacation travel, theme parks

[11] There are high degrees of customer contact during production. Examples: health care, spa services

[12] Competing offerings may differ in how much of the work of production is shifted to the buyer.  Examples: online brokerage vs. full service, self-serve vs. full service gas station

[13] Suppliers assume real economic risks (exceeding the revenue potential) by choosing a given customer. Some interested customers must be rejected. Examples: credit cards, insurance, auditing

[14] Customers assume real economic risks (exceeding the fee paid for the service) by choosing a given supplier. Examples: mutual funds, home insurance

[15] Everyone calls them clients, users or customers, rather than consumers

So now you know. There you have it. Try to keep your customers and your consumers straight now, okay?

Understanding the difference between customers and consumers gives you some important insights into underlying truths that truly do affect decisions about marketing and other real world issues."

In the context of our own design activities, will the above list influence the way a Design Group will think of the tools it needs and exploits for the benefit of Innovation Teams.. it is no good just being there you have to be able to be like Tony and Guy- as the Knutsford Guardian reported

"......the company is not scared of competion because it had an internationally famous brand name. "You're always going to be competing with other retailers. Everybody id always competing and everything's a competition," said Miss Dersookiasian. Tony and Guy did its research into Knutsford's wealth and the type of potential customers it could attract. Its bosses were impressed by the area's affluence and its residents' disposable income...."

but will that be enough.. how will the other 15 counter another one moving in? Will they be innovative in retaining their existing clientele and attracting any new prospects drawn in by T & G's presence?

And in design terms...what lessons can we learn and apply from this?

How can the Design Group be that self-confident that its own brand and service will attract the innovators to its door?

Marks and Spencer makes nearly £1billion

Marks and Spencer clock
Originally uploaded by Andyrob.

Stuart Rose, head of Marks & Spencer, said on the radio after heading a 3 year turn around noted that they had been going 125 years and for 110 of those were very successful. When asked how the turn around was achieved said "Good products at good prices in good shops with good service."
When asked what was done to achieve the transformation said " Our people did it. When I joined three years ago I went round asking people what was wrong and how do we correct it? They all gave the same answer so I asked why they weren't doing it." He continued "I realised that they had a collective fear that they couldn't get it right. So I made sure they had support and they got on with it."
Two incidents that I witnessed recently sum it up. I went into Marks and saw a large display of glassware and a few minutes later someone bumped into it and glass went everywhere! The staff rushed up and picked the lady up and sat her down on a chair that another staff member had grabbed and brought over. Several more made sure customers were safely out of the area and no more came in. They made sure the poor victim was ok. Only then did they turn to the mess to make it safe and clear it up.
A couple of weeks earlier I was up the road in John Lewis when I noticed a mannequin on the corner of two walkways through the ladies fashion. An elderly gentleman caught his foot on the stand falling over and taking the mannequin to the floor with him. Several partners, as the staff are called, turned, walked over, picked him and the mannequin up asking him if he was okay. When he replied "I think so." they turned away to discuss the mannequin and how they could make sure it didn't fall over so easily.. ignoring the customer and the fact that the mannequin was an obstruction.
Guess which store we visit most?
Both stores are successful. M&S has real competion, John Lewis less so.
I am reminded that Brand Loyalty can just mean "Lack of anything better." So eventually M&S might eye up JLewis's customers and..... Oh they are already putting Simply Food near Waitrose (owned by John Lewis Partnership).