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Article CX Strategy

Throw Your Old Business Model Out

There a new sheriff in town — and his name is ‘the customer’.

So what’s the new law? — promoter checking

You better have a lot of promoters among your customer base — because now your detractors have a powerful voice.  Plus they can band together in a flash and do serious damage to your brand.

Look no further than Trip Advisor to find the known example. Regardless of whether you believe all the reviews on there, the fact is it influences a lot of buyers. The complaint that hotels have is that the detractors are the loudest voice — but who’s fault is that? I’ve stayed in 100s of hotels, and many times my experience has been remarkably weak.

Hiding behind regulatory protection

Some industries are still trying to hide behind local, state or national regulations. But what’s their motive? Is it the protection of the customer (which they claim) or is it the last stand of a dying business model.

Whether it’s the payments industry fighting smaller money transfer players, taxi companies fighting Uber or brick and mortar retailers fighting Amazon, the same question has to be asked — what’s best for the customer.

The truth is, in this era of transparency and social sharing, there aren’t that many upstart companies that are trying to rip off customers. Most are pretty customer centric, because how most disruptive business models are created in established industries — from the customer’s perspective.

Throw out the old business model.

If a business makes a big part of its money by (for example):

1. Using tricky terms and conditions and hidden fees

2. Making promises and not delivering on them (as a way to save costs)

3. Fails to provide basic support when customers have a core problem

Then it’s time to throw out the business model. Sure, things might be fine now, but you can see the trend coming. Just ask Hertz why they setup a hourly car rental business that undercuts the profit model of their core business (thank you ZipCar).

Promoters don’t demand perfection

All it takes to get more promoters is two things:

1. To know your customers and what they really value and

2. Delivering on that thing they value most really well and do the rest ‘well enough’.

It’s an approach that allows businesses including hotels to still work within their business realities and yet gain promoters.

Mar 4, 2014  
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