Commoditization, is it happening to you?

28 11 2007

“We are living in an era where there are too many retailers serving too few customers and where there is no longer any brand loyalty or retail loyalty” Kevin Burke, President/CEO. The American Apparel and Footwear Association.

From this comment by Mr. Burke I believe the apparel and footwear industries are in the midst of an important struggle, to move away from their current status of a commodity business.

The winners will be those with strong design, distinct brand, and smart developed distribution systems. The same can be said for almost any current industry.

Too many retailers and points of sale? I doubt it. What I interpret from this comment is that there is intense competition between retailers, and instead of seeking exclusivity or innovation to attract and maintain customers, they are using the oldest,simplest trick known….lowering product prices and with it, the quality of the shopping experience.

It is a classic example of commoditization.

Manufacturers are also to blame. The rush to sell their product to high volume buyers insures loss of control of the marketing and retail channels.

The rush to sell everywhere, to everyone, at the same time allows and promotes price competition and price wars between the various manufacturers and retailers.

Too few customers? The real problem is overproduction. Current manufacturing focuses on high volume production and this encourages the standardization of product. The desire to reduce fixed costs drives manufacturers to seek out cheap world labor, increase productivity through mechanization (which encourages product standardization) and the outcome is a mountain of finished products, created all over the world, that are indistinguishable from one another.

Commodities. Most apparel and footwear companies focus on low cost, high volume manufacturing, they sell to wholesalers or retailers that also focus on volume. So suddenly branded products can be found in department stores, boutiques, grocery stores, flea markets and the Internet. The product is everywhere, consumers have learned that one should just look for it where the price is lowest.

This also makes it easier to pirate and sell a product to a growing network of sales outlets focused on offering a brand name for less.

No brand or retail loyalty?
If there is no customer loyalty (read as no perceived advantage to shopping with you versus the competition), and loyalty is important for continued growth, profit and success, then it’s time for a serious reevaluation of how one is doing business.

How can one stand out from the crowd, do something different and unique, and create a sense of exclusivity and prestige for the consumer?

This is the future.

Related Links

The easy way

10 top reasons for poor customer service and their solutions

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Are you listening to what the customer needs?





Top 10 reasons for poor customer service and their solutions

13 11 2007

Customer service, the interaction between the client and the supplier is an integral part of the purchasing and user experience, and as such, is the key to continued success in business.

What are the reasons for poor customer service?

Top 10 Reasons for poor customer service and their solution

1.    People are not trained.  When an organization does not spend the time to fully train their people the consequence is poor service.

Solution:  Dedicate resources (time and money) for training and reinforcement.   Employees should be fully informed about company goals, the products and services.  Emphasis and training should be focused upon the importance of listening and responding to the customer’s requests.  People can only do the job if they are given the right tools and objectives.  It costs money to train people.  It will cost more if you decide not to train them.

2.    People don’t care.  Selecting the correct personality is crucial for your business success.  Apathetic or self centered personality types have no place in a business that requires customer contact.

Solution:  Focus the selection and evaluation process to identify personalities that do not fit the required profile.  Get the wrong people out immediately, it also sends a clear message to everyone.

3.    Sabotage.  Angry or frustrated employees can actively work to sabotage and try to destroy the company.

Solution:  Keep honest and open communications with employees.  Informally and formally review performance, goals, objectives and feelings to stop potential problems before they reach the customers.  Get these people out of the front lines immediately.

4.    Employees don’t believe in the company, product or service.  If the image, marketing and promotion of the company is quite different from the reality, workers will not be able to sustain a positive attitude in the face of problems they know exist.

Solution:  Be honest.  Work closely with customer service, marketing and quality control to identify real problems and fix them.  Don’t let  marketing advertise over problems, solve them.

5.    Personal problems reflected in work.  When an employee’s personal life is in crisis or out of control, they may exercise control, aggression and negativism toward customers in an attempt to put some part of their life in order.

Solution:  Clear communications with employees:  If their personal life is affecting work performance, talk about it.  Time off, access to counseling or just listening may prevent more serious problems.

6.    Burnt out.  Too much negative, too many complaints can lower a person’s level of commitment and move their positive and helpful attitude to an apathetic one.

Solution:  Constant communication helps to identify who is burning out and why.  Get customer service people together to talk of success and how to deal with the frustrations.  Provide recognition or incentives for excellence in dealing with problems.

7.    Not providing the correct solutions to customers, lack of empowerment.    There is nothing worse than dealing with an employee who listens to a problem, then shrugs and says they have to ask someone else in the company to intervene and provide a solution.

Solution:  Give the people on the front lines the authority, power, tools and ability to solve problems.

8.    Don’t see the benefits – don’t understand their role in the company. 

Solution:  Employees project an image of the company.  They are the company.  They should be reminded of their importance and value to the customer and to the company.  Incentives, recognition, training and constant reinforcement are important.

9.    Apathetic from hearing the same problems over and over.  A fundamental role of the customer service division is to provide constant feedback on how customers view the company, the products and the service.  If this feedback is not analyzed and acted upon by upper management a feeling of apathy and frustration is created.

Solution:  Set up a model and procedure for the accumulation, analysis and implementation of solutions for the problems identified by customer service.

10.    Incentives/salary not tied to results.

Solution:  If you insist that the company depends upon people, and that people are the key to success, implement compensation packages, evaluations and incentives that support and reinforce this.

Related Links 

Are you listening to what the customer needs?

Broken Promises

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Don’t find a solution, find a way to make it better





Are you on the right team?

21 05 2007

 When the focus at work is on providing a great product or service to the customer (maximizing) the perceived value of the product is higher for the customer, and they are willing to pay more.

This translates into more profit for the company.

When our focus is on maximizing profit for the company, management tends to rush toward cost cutting and/or reducing product quality (minimizing) many times resulting in reducing perceived product or service value for the customer.

The customers may not buy your product now, resulting in less profit for the company.

It’s all about providing a product or service that will be appreciated, sought out and embraced by the market.

Creating a product or service that is valuable to the market.

The more people want YOUR product, the more money they will pay for it.

It’s about listening to customers, creating new ideas, innovating, and taking calculated risks based on your expertise and understanding of your business.

It’s not easy.  Creating has never been easy.

Success is not guaranteed.  In fact the higher the risk the higher the potential payoff and profits.

But it sure is more exciting and rewarding than cutting pennies off manufacturing, administration, sales and logistics costs.

It takes a different type of leadership, management and employees to make this happen.

What team do you want to work with, lead or manage?

Related Links

The 6 Fundamental Concepts Behind Every Successful Business

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Determine cultural conflicts between Mexico and your home country

26 03 2007

This site will help determine possible cultural conflicts between your home culture and Mexico.

It compares 4 dimensions of cultural differences; Power Distance, Individuality, Uncertainty Avoidance and Masculinity.

From the site: “Welcome to the Intercultural Business Communication tool. This simple online tool offers a great resource for people wanting to get some intercultural business communication tips when working with people from different cultures. All you do is choose your own country and another country and we produce a graph that shows the the major differences between the two cultures. You then get some insightful intercultural business communication tips for working in or with that culture.”

Intercultural Business Communication Tool

It provides a comparison between the countries, and then provides tips in order to reduce or manage this cultural gap.

Very interesting.

Related Links

Intercultural Business Communication Tool – Kwintessential Language and Cultural Specialists

Geerte Hofstede, Cultural Dimensions

Cultural Misunderstanding- it can happen to you

Create great international business relationships





How we react to unethical actions and behaviour

21 03 2007

There are a number of reasons why individuals and organizations refuse to perform in an ethical manner or raise their voice against unethical behaviour.

6 Reasons why we don’t object to unethical actions or behaviour.

1. Ignored and Ostracized. We will be eliminated from the “group”. Showing opposition to an idea that was created by someone with power or the power of persuasion can result in being ignored and left out of future decision-making.

2. Fear. Not on board with the company philosophy? You might get fired. Fear of unfavorable personal consequences.

3. Demoted. Will lose power, prestige, and income if you speak up or oppose the idea or practice.

4. Insecurity. Perhaps we are not sure if the means justify the ends. Inability to clearly see the situation as unethical or wrong.

5. Reward. We see a payoff (money, power, prestige) that overwhelms our sense of ethics. Justifying wrong in order to receive personal gain.

6. Lazy or uncommitted. Unwilling or unable to challenge the group or idea.

5 Reasons why we should speak up and question unethical actions or behaviour.

1. Be true to yourself. Stand up for your own beliefs.

2. Be a leader. Others in the group might believe the same thing, but are timid or afraid of voicing objections. Create a dialogue and open a discussion of the issues.

3. New point of view. The group might not have thought of the consequences, or not see the situation as an ethics related decision. Open their eyes.

4. Protect the organization. Your intervention might save the organization from scandal, embarrassment, legal and financial problems.

5. Clarify. If you are unsure, voice your concerns and let the group present their case in order to clarify and resolve any doubts that you might have.

Related Links

Is your company noble, moral, ethical or virtuous

Sales and marketing terrorism 

Corruption, bribes, mordidas and tips – Doing business in Mexico

Where do you draw the line





The dangers of success

13 03 2007

Today a Google search for the word “success” turned up 321 million websites.

“Failure” got 218 million sites.

We all want to be successful. Leaders are expected to be successful.

We’ve been trained, rewarded, pushed and prodded to become successful. School, work, games and personal life, we are always focused upon success.

It is probably genetic in nature. Competition to survive demands success, and therefore the desire to succeed is an inherent quality in human beings.

Success brings recognition, wealth, favor and fame to the individual or group. All are benefits and rewards of being successful. We like the rewards and benefits….we really do.

Business loves success. In fact, business is not very tolerant of failures, especially leadership failures. To be a leader in a business environment means that you must be successful and get your objectives accomplished.

We strive for success, we really want it to happen, we plan for it, we train, we learn new things, we even modify and manipulate external factors to assure the outcome we desire. Despite all our planning, spending and preparations we are not always successful. No one is successful all the time.

We often forget that past success is not a guarantee for continued success, and that failure is always a learning experience, not always a bad outcome.

The illusion that we must always be successful, and the glory and attention that success brings is not always a good thing.

“Pray that success will not come any faster than you are able to endure it” Benjamin Nnamdi Azikiwe

Success, and particularly continued success, can lead an individual or organization into the following behaviours and attitudes.

  • Cult of Personality / Fame. The focus is on the personality and not on the present or future work outcomes. It becomes more about who is doing it and less about what to do.
  • Fear. Avoiding or agonizing about doing something different, new or original, “ we were great doing this…let’s keep on doing it”.
  • Can’t let go. Inability to let go of a success and move on to the next challenge. Unwillingness to say “that project and party is over…what’s next”.
  • Over Confidence. Invincible attitude leads to strategies, theories and attitudes that may provoke attacks on enemies or punish those in a weakened position.
  • Loss of control. Inability to gauge or control excess or weakness. Losing touch with the reality of the situation.
  • Yes Men. Lack of honesty from the people around you, no real challenges to ideas, methods and objectives.
  • Hangers on. Distractions and undesirables begin to fill the agenda and schedules.
  • Closing Networks. Cutting ties with old networks and individuals to move “up” in status.
  • Depression. When the happiness or emotion of succeeding does not reach previous levels of emotional highs or didn’t meet the expectations.
  • Risk. Anxiety about repeating the success may drive one to take larger risks, or to eliminate risks.

So go on seeking success, it’s the right thing to do.

Don’t take the failures too hard, learn from them, pick them apart and understand exactly why failure occurred.

Celebrate when you do succeed, take your 5 minutes in the limelight. Then put your feet back firmly on the ground and get back to work.

“Try not to become a man of success but rather become a man of value” Albert Einstein.

Related Links

Why do we fail

Leadership lesson – A Message to Garcia





Don’t find a solution, find a way to make it better

12 03 2007

We make a large error in our business and personal lives if we believe that every problem or situation can be solved immediately or in the short term through our decisions and application of resources.

Theoretically it’s possible, but our focus on solution instead of optimizing and making changes to make it better can blindfold us toward evolutionary processes that in the long term provide better, stronger and long lasting solutions.

I’m suggesting that every situation should be initially evaluated based on two basic criteria; can it be solved now, or can it be improved now.

The situations that can be solved now or in the short term, should be. The organization should dedicate the time and resources toward the solution.

An example would be a delivery service that has 3 trucks and cannot cover the current delivery area on-time due to an increase in customers and package volume. A possible swift solution would be the purchase of another vehicle and hiring of a new driver.

A situation that cannot be solved now or ever should be approached by identifying areas where improvement should be made. The time and resources of the company should be focused upon the improvement.

An example would be government’s attempt to eliminate poverty or disease from a population. A perfect solution is not possible or practical, but by focusing on specific areas one can find great opportunities for success or enormous impact (vaccinations for children against polio).

When we look at every situation as a problem that needs to be solved right now we may be missing the best solutions and strategies required to resolve the situation over the long term. Ask yourself:

  • Can we solve the problem quickly and efficiently with simply modification of variables or a shift in technology? If the answer is yes, then set the process and resources in motion.
  • What if the problem is not able to be solved quickly or has no practical or economically viable solution? This is where the approach of resolving and modifying parts of the problem comes into play.

This evolutionary approach to problem solving is not often requested or expected in business (the quick fix is always applauded and sought after), but often the best long term strategy is optimization and gradual modification.

This evolutionary problem solving process will provide new opportunities for change and solutions to be developed in the future.The identification of areas, processes or resources that are the bottlenecks in your organization become areas of opportunity.

Modifying and improving these bottlenecks will automatically create new bottlenecks, in new areas. The focus on identifying and solving these “new” situations leads to a process of continual improvement and a better, stronger organization.

This is one of the fundamental ideas behind the Theory of Constraints (TOC).

Common sense tells us that in a complex world not all solutions are simple, quick or painless. The “quick fix” is a great idea, but not often found in everyday life.

Observation of science, technology, philosophy and business ideas and strategies show us that change occurs through the rare revolution (paradigm shifts and new discoveries) and through the more common evolution (gradual modifications leading to continual change.

What can be changed, fixed or modified today to make the organization, process, product or service incrementally better?

Related Links

Why don’t they?

Starting over

How to systematically analyze any situation for better decision making

AGI Institute – Theory of Constraints

Evolution (Disambiguation)