How Sticky Is Your Business?

Establishing a strong relationship with customers in the marketplace is crucial too long-term business success. Such a relationship creates the type of stickiness with a brand that results in top-of-mind behavior. Stickiness refers to the attachment to a brand that would make a customer unwilling to switch to a competitor that may offer an equivalent product or service or better price. As such, this type of loyalty can add up to a significant advantage in the marketplace.

To achieve the level of loyalty we are referring to, a company must become a master in the art of listening to their customers, understanding their needs, and developing products and services that meet the customer’s expressed needs. These companies understand that the voice of the customer reigns supreme and it is the customer who is the ultimate determining factor of a company’s longevity and relevance in the marketplace.

Companies that listen closely to their customers can develop a type of foresight that can give them an advantage that makes it very difficult for competition to match. This customer foresight allows companies to predict, instead of reacting, to customer stated preferences. This type of insight allows a company to shape customer purchase criteria. Well in tune companies are able to shape customer criteria because most customers do not know what they want. All customers know they have problems. However, they do not always know how to solve them. Sometimes customers must be shown what they need to solve their problems.

Leaders in market segments define what performance means for their respective category, which in turn creates a brand identity for leading the marketplace for that performance standard. Customers then use that performance standard to make sense of the behaviors within the marketplace and to connect with brands. For example, Starbucks set the standard for ambiance, community, and service for coffee shops. Now, most other coffee shops are judged based on the standard set by Starbucks. The same is true for Toyota and automobile reliability, The Ritz Carlton and hotel service, and Chick-Fil-A and fast-food customer service. Notice that those who defined and subsequently set the standards are also leaders in the marketplace.

If a company places all its eggs into the downstream (production process) basket, the competition eventually catches up and sometimes passes the originator. Thinks about all those early entrants into markets that are no longer the leader or even in existence today. Netscape Navigator, Friendster, Pan American World Airlines, Sears, Atari, and Motorola were all leaders in the marketplace at one time. All were also passed by because they reacted, as opposed to predicting, the needs of their customer. Therefore, the customers were eventually lured away. They didn’t stick with those brands.

The reality is this, the more customers interact and engage with a brand, the more likely it is that they will stick with a brand. Blockbuster failed to understand what consumers wanted and failed to see where the marketplace was headed. Netflix saw the direction of consumer behavior, which began with movies mailed to customer homes and evolved into on demand streaming video. Blockbuster is now popcorn and Netflix is still competing in what is now a very crowded space.

Brands that are the standard reap the benefit. The more consumers are awed by a brand the more those who are in their target market are willing to pay. Think Apple, Mercedes, and Sub-Zero/Wolf. How do you position your brand, product or service offering in the mind of your customer or target audience? BMW is known as a driving machine. Subaru is known as a dependable and safe workhorse vehicle. Each brand meets a need and solves a problem in their own way. They pair the solving of a problem with a high-quality product that can meet the standard they have set for themselves.

What problem are you solving? Is it the same as your competitors? How are you defining the market for your brand? If you are a water filtration system company, do you run alongside household appliances or bottled water brands? What problem are you solving? Too many plastic bottles in the ocean? The cost of buying bottles of water? Is your athletic sock company making water wicking socks or are you manufacturing a compressions sock that energizes the leg while keeping you dry? Does your packaging look like your competitors? What about your storefront, lobby, or logo? If you do not want to be compared to other brands, then you need to position yourself differently.

What empirical data can you gather that becomes accumulative and leads to more data that leads to more information about how to do things better, giving you a larger competitive advantage? Is it data about how to do something that will lead to lower costs and better outcomes for your customer? Is it data that can lead your team to deliver better results for your customer? Is it data that makes you more efficient and results in a better customer experience?

The question remains, how can you steer consumer purchase criteria, so you become the leader in the marketplace? It is not only through innovation of an existing product that drives marketplace dominance, but it is also understanding consumer needs and guiding them to a solution to a problem they know they have but do not know how to solve. How do you develop new criteria that renders the old obsolete? Solve that problem and you may identify a new criterion that ends up becoming the market standard.

Once you are know as the market standard, your brand becomes more valuable than your entire production process. Think about this, if all of Apple's manufacturing facilities were destroyed in an earthquake, investors would line up to support the rebuilding of them due to the brand's reputation and recognition in the marketplace. If Apple lost its brand reputation and recognition in the marketplace investors would think twice. Producing a great product or offering a great service is a table stake. Every company must produce great things or offer great service. Becoming the standard allows you to build a brand that withstands the test of time.

Randy Stepp is a Principal Renaissance Leadership Group. RLG is a business development company that drives growth though the combination of strategy, purpose, and passion.

Visit Renaissance Leadership Group at www.renaissanceleadershipgroup.com to learn more about business development