Shrinking product lifecycles
The scale of change in the last 100 years is vast. We have gone from the horse to the space shuttle, from Morse code to smartphones.
It has been pointed out that in the last decade, as a result of the digital revolution we have experienced 100 years of change in 10 years and are likely to experience 1,000 years of change over this century. You don't have to look far to see that almost every aspect of our lives has changed and the business world has changed as well.
'Shrinking Product Lifecycles' was voted the eighth most important sales trend for 2012 from The 12 Sales Trends of 2012 voted by our readers. Technology has lowered barriers to entry and significantly shortened product lifecycles.
In addition, differentiation – once the kingpin in strategic positioning – has diminished in influence as the pace of change increases. For instance, the popular Flip video camera (which was considered a highly differentiated, innovative concept when launched), has gone from a $590m business to being shut down in less than two years – Cisco can't even sell the brand!
Proprietary branded product companies are facing increasing competition from generic manufacturers who are able to produce Me2 products at a similar or identical quality levels in very quick time frames. Gone are the days of cheap nasty rip-offs. It appears on many levels that quality is now a commodity.
Just look at the modern car. Cheaper cars now offer pretty much all the same safety and quality features of their higher priced competitors: airbags, air conditioning, media/comms accessories, GPS, etc.
Shrinking product lifecycles make it increasingly important for businesses to get innovative offerings into the customers' hands, quickly. With continuous product innovation and further market fragmentation, customers have more choices and leverage than ever before.
We are seeing customers become more demanding, insisting on both off-the-shelf products and more complex, customised solutions all requiring different levels of sales support.
BMW is a good example of an earlier adopter into the bespoke model (made to a buyer's specification –personalised or tailored). They were the first company in the world, all the way back in 1989, to offer mass customisation and did so in spite of the very rigid engineering process that binds motor manufacturing. It shocked everyone.
By contrast the retail sector in Australia is stuck in reverse and look backwards at convention. Fighting the internet, they have failed to embrace the new and are in their death throes, crying about how hard done by they are instead of embracing the internet and social media and finding new ways of doing business.
A great example of a modern retailer is the worldwide retail clothing chain phenomenon, ZARA. They have listened to their customers, read the market extremely well and, as a result, offer great design at affordable prices, with 16 range cycles a year and good service. What's even better is you can dress a whole family at ZARA in good looking, smart clothes for a reasonable price.
In 2012 and beyond, organisations must find fresh ways to respond to the ever-changing global marketplace or perish. Satisfying customers is only entry into the game. So what can businesses do to keep up and hopefully stay ahead of the game?
- You have got to delight your customers
- You have got to surprise your colleagues, peers and associates
- You have got to shock your rivals
This is what BMW did in 1989. They shocked everyone by showing that you could adapt a rigid engineering process by introducing flexibility and creating mass customisation. So they delighted their customers, surprised their internal teams and absolutely shocked their competitors.
In times of uncertainty the last thing you want to do is stick your head in the sand and hope your world will return to normal, because all that will happen is you will get a swift kick in the butt.
Here are some tips to get you going:
Open yourself to the outsider – are you looking beyond your own industry backyard? There are so many lessons to be learned in other areas, yet many people stay trapped in their own industry sectors often seeing the same old people with the same old ideas and then getting the same old results.
Be prepared to experiment and fail – you learn more from your mistakes than you do from getting things right, and so often new ideas and innovations come from mistakes – just think Post-It Notes. Yet so many companies and leaders are frightened to take risks; frightened of shareholder backlash; frightened of losing their jobs; just plain living in fear holding onto the old for dear life. That is no way to run an organisation or get ahead.
Make decisions – Henry Ford said he would rather employ executives who made the right decision 51% of the time than employ executives who made no decision at all. Being indecisive is far worse than making the wrong decision.
Define real value beyond the product – value is more than a product and a price. It involves effectiveness, efficiencies, risk and total cost of ownership and these are the types of conversations our businesses need to have with clients if we don't want to play in the cheap transaction end of the market.
So stop crying, because there is a world of possibility out there – you only have to look. As Marcel Proust said: The real voyage of discovery consists not in seeking new lands, but in having new eyes.
Remember, everybody lives by selling something.
Sue Barrett is a sales expert, business speaker, adviser, sales facilitator and entrepreneur and founded Barrett Consulting to provide expert sales consulting, sales training, sales coaching and assessments. Her business Barrett P/L partners with its clients to improve their sales operations. Visit www.barrett.com.au