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Simplification-Back to the Basics

As a society we have made things complicated.  If you take a stroll down the condiment aisle in your grocery store you will find a section devoted to pickles, mustard, and barbeque sauce.  As consumers, we must be fortunate to have so many options and varieties.  Once you arrive at the mustard section in your grocery store you will find Yellow mustard, Brown mustard, and Dijon mustard.  After several minutes we decide on a mustard and move on the next mind wrenching food decision.  Once we get home we start up the barbeque and grill the regular hot dogs and vegan hot dogs.  We then slather the dogs in mustard and think while we enter a food coma.  Would I have been happier if I chose Guldens Spicy Brown Mustard?  I wonder if this hot dog would have tasted better on Martin’s Potato Rolls? Everyday, we as consumers are being bogged down by too many decisions.  From fast food restaurants to grocery stores to dating apps we are overwhelmed with choices.  Having many choices is great, but it also leads us to question our decision making.  Would I have been happier if I chose the alternative?

Disruptive innovation in business is the notion that technology can improve existing businesses by creating efficiency and changing established methods with new and improved methods.  This is simplification through technological means.  If something is easier, faster, and better, it will be adopted.  Disruptive innovation happens without technology as well.  For example, look at Five Guys Burgers and Fries.

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In a world that was oversaturated with fast food such as McDonalds, Burger King, and Wendy’s an underserved portion of the market was created.  The fast food behemoths that originally started with burgers branched out into other food realms to appeal to a bigger diverse group of customers.  While menu expansion brought in more customers the quality of the original product had diminished, and the brands became far removed from their original purpose, Burgers.  Five Guys went back to the basics.  They decided that doing two things extremely well would be recognized and rewarded.  Make high-quality burgers and fries.  By simplifying their offering Five Guys was able to make economies of scale work for them.  As sales increased costs decreased. Furthermore, the feeling of poor decision making was reduced substantially at Five Guys.  The menu consisted of burgers, dogs, and sandwiches.  If you visit a Five Guys you know what you are getting before you enter, and when you leave you know that you chose the right thing, because there were only a few choices.  Going back to the basics, an exercise in simplification is the new disruptive innovation.

Scale Local

Scalability is the ability of a business to expand and grow while maintaining the core business model that generated the initial success. If a business finds success, the next logical step is to grow the business by replicating what worked and open ancillary locations with the same business model. Here are some challenges that you may face when scaling your business.

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Quality Control
As a business grows it can be challenging to maintain consistent operational processes that result in consistent quality standards. A great example of quality control through operations is McDonald’s. If you go to any given McDonald’s restaurant you can almost guarantee that the bacon, egg and cheese biscuit will taste the same. It is by design that McDonald’s menu items can be produced by each location with little variation from the original menu item. Strict procedures and instructions are maintained for how to produce each menu item with accuracy. Furthermore, the components of McDonald’s menu items are made in large quantities off premises to ensure that consistent product is distributed to each location. To build an empire with standardization to the max takes time and sustained effort while maintaining control over all aspects of food production. What McDonald’s has done to streamline their operations and remove variation from their final product is commendable. However, a cheeseburger in New York City is different than a cheeseburger in Los Angeles. By removing all the variation from your final product there is no room for creativity. Creativity, gave rise to the initial idea to make quality hamburgers at a reasonable price with high quality ingredients. Creativity and passion is stripped away from the workers that are now forced to follow operating procedures that still work, but lack personalization. Big corporations strip away the fabric of our local communities. Scaling local will allow businesses to personalize products to their unique customer base.

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Culture Consistency
Whenever you attend the grand opening of a store or restaurant you are met with enthusiasm, excitement, and passion. With every additional store front that is added, the levels of these emotions decrease. Welcome to Moe’s! You can demand from your workers a requirement to say or do certain things, but is that genuine? Is every worker at Moe’s really happy to see me every time I step in the door. No. Maintaining culture is about having your employees live the brand. If your employees are selling something that they themselves can not afford or share the wealth, how can they feel passionate about what they are selling? A relationship between a business and its workers needs to present for a culture to maintain its vibrancy. Here is an excerpt from Moe’s website:


From the second you walk into a Moe’s, you’ll notice there’s something different. You actually feel welcomed. Ever since our employees at the first location in Atlanta, GA in the year 2000 shouted “Welcome to Moe’s!” – which probably scared the bejesus out of those first guests – that phrase has embodied our entire culture. Everybody is welcome at Moe’s. Except, of course, fugitives.


The first employees were the passionate ones. These first employees had an opportunity to grow with the company and rise through the ranks with expansion. The employees at the 100th Moe’s are not as passionate about welcoming you to Moe’s. Those employees just know they have to say “Welcome to Moe’s” to keep their job. Workers need to have a closer connection to the profits of our corporations. Corporations are making millions and billions of dollars for shareholders at the expense of workers. By scaling local a corporation can keep the passion of the initial store concept with each new store. Scaling local will give workers an opportunity to grow with the brand and share the fruits of their labor.

Agility and Adaptability
Turning a jet ski is easier than turning a cruise ship. Once a business has scaled, making a change can be difficult or impossible. For businesses, failure to change and adapt results in being forced to shut down operations that are not fit for existing competition. To avoid the pitfalls of over standardization, companies should operate new locations as their own autonomous locations. The competition that businesses face locally is different than the competition that businesses face on a macro-economic level. Relying on an all-encompassing franchise management team can be catastrophic for franchisees. By localizing your franchise locations each location can adapt to find its own place in the local community. Allow a community to mold and shape each of your franchise locations rather than forcing a local community to the way that your franchise operates, is the direction that franchisors should take. Scaling locally allows businesses to form relationships with the people of their community. The next wave of businesses should employ a local mindset that will allow each store to build a local social presence while connecting with the customers surrounding their store.

Contact DJR Jeeves Consulting today!

Exceptional Customer Service Wins

Beneath every corporate logo there is a team of people that are trying to determine how to increase revenue and decrease costs. We have departments such as revenue management which attempt to maximize revenue given constraints and process controllers that minimize costs by reducing process inefficiency. While one of the major priorities for all publicly traded companies is to provide a return to shareholders, there should be more of a focus on customer service. Price increases can be made to make more money today, but how does that impact future sales and customer perception?  Costs can be cut by reducing in-person customer service with an FAQ chat bot, but are you customer’s problems really being solved?  The heart of business is customer service. Here are three companies that understand how to treat people like people.

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Disney

Known for magic and pixie dust, Disney has exceptional best in class customer service. While I was being trained to work in the Magic Kingdon, the leadership team explained to me that there is something called a magical moment. A magic moment is when a child loses their beloved stuffed animal, a ride gets shut down when Guests have been waiting for over an hour, or a child drops their ice cream cone. The remedies for these situations seem obvious, but not all companies take the action to correct problems that may not even be under their control. A child misplaces a plush Mickey Mouse and I just so happens that the family is headed back to Brazil tomorrow.  The Guest shows a receipt to Guest Service while their child is crying frantically. The Guest gets a new Mickey Mouse plush.  Problem solved…lifetime customers. A Guests favorite ride breaks down after the Guest has waited over an hour and never reopened. The Guest goes to customer service an explains how the annual visit to Disney wasn’t the same without Space Mountain. The Guest gets a couple fast passes for the ride when it reopens. Problem solved…lifetime customers. Children sometimes fail to understand that holding ice cream cones upside down results in ice cream on the ground. Children cry when their ice cream is on the ground instead of in their hand. The cast member simply makes the Guest a new ice cream cone with a cup just in case. Problem solved…lifetime customers. These magic moments are touch points that the customer remembers. Disney cares about customers.

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JetBlue

I read an article recently about a bridesmaid who booked a JetBlue flight, but prior to the wedding she had a falling out with the Bride. About a week before her departure the Bride sent the Bridesmaid a nastygram requesting the bridesmaid to send back the dress since the bridesmaid would not be able to attend all of the wedding events. The bridesmaid vented on Twitter about being stripped of her duties and how being at the wedding was no longer comfortable given the confrontation that she had with the Bride through email. The bridesmaid tagged JetBlue so they could understand her situation.  JetBlue responded to the Bridesmaid’s tweets and cancelled her flight with no penalty. Furthermore, they offered to fix the friendship of the Bride and Bridesmaid by offering them a free JetBlue Getaway. This is the kind of customer service that goes viral. Companies need to be doing more with customers on a personal level. Big companies rake in millions to billions of dollars and they can afford to fix the problems of everyday customers. Fixing a friendship is priceless.  JetBlue now has 2 lifetime customers and probably attracted new customers from their amazing customer service. JetBlue is not just an airline that gets you from point a to point b they care about customers.

Amazon

Let’s face it, ordering things online can be hit or miss if you’re never actually seen the product you are purchasing in person. Furthermore, it can be a guessing game of when you will receive what you’ve ordered when buying online. Amazon took those concerns away from consumers and created an industry benchmark that is tough to match.  Free two-day shipping on Amazon Prime eligible items, or if a certain price threshold is met (not a prime member). In addition, almost all returns are honored for money back or at least a gift card. A while ago I made a relatively large purchase on Amazon.  The top on my Jeep Wrangler had a leak and I was tired to driving to work with water in my shoes. I went on Amazon and found what I thought was a stock OEM replace top for my Jeep and ordered it. A couple days later the Jeep top arrived, and I opened the box to find a jeep top that was not an exact replacement of the top that came with my Jeep from the factory. I managed to get everything back in the box and sent back the $800 Jeep top wondering if I would receive a refund. Sure enough a few days later my account was credited. I never paid a dime for shipping. I was not hassled for returning a product that was not what I expected. I continue to buy random things from Amazon.  Amazon knows that good customer service leads to good customers. Good customers continue to buy things with confidence. Businesses need to do what is right for the customer and the customer will be loyal. Amazon cares about customers.

Where are you Searching?

Based on research from Search Engine Land, Google controls 65% of search queries while Bing accounts for 33%.  These metrics are wrong.  Search is not just taking place in the typical search engines such as Google, Bing and Yahoo.  Search is now taking place within websites and apps. Here are 3 companies that are taking over search.

Facebook

Not only can you find your friends on Facebook, but you can find businesses, groups, news and more.  Since daily active users spend upwards of 30 minutes a day on this platform people are finding content and engaging.  The news feed in a sense is an automated search.  The newsfeed knows what people may be interested in and presents that information to users pre-populated.  Chances are that at least once a day you click on an article in your newsfeed.  You can also type into the search box that Facebook provides.  This search box used to only be used by people to find friends by name, but now searches can be made for anything.  Facebook searches are on the rise.  In platform search is slowly taking away market share from search engines, but you will not see this reflected in search engine metrics.

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Amazon

In order to browse in Amazon a user typically types what they are looking for into a search box.  I would argue that in the past this may have been done in a search engine.  If you wanted to buy shoes online 10 years ago you may have typed into google “where to buy shoes online”. Now consumers skip that step because they already know where they are going to buy shoes.  They then search within the platform that they would like to use. This could take the form of an Amazon search for “men’s wingtip shoes.”  Amazon is also leading the way with Alexa.  Verbal search is on the rise and Alexa’s AI will continue to learn and improve as more and more people ask her questions.

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Apple

People have been talking to Siri since 2011.  She has been listening to your questions and finding results for you for quite some time now.  Like Alexa, Siri takes the form of a verbal search.  What differentiates Siri from Alexa is that if you have an iPhone, Siri, follows you everywhere you go.  Siri is with you in the car, on your run, she knows when you wake up.  The best part about Siri is that she can do things for you when your hands are doing other things.  She can make changes to your calendar, set alarms, and find take out restaurants.

Modern Television Social Revolution

I am putting my futurist mind to work for a moment to discuss where I think media consumption is headed soon.  Specifically, I would like to discuss what I think will happen with TV shows and live entertainment such as sporting events in the near future. Recently, media networks have gone through a massive paradigm shift due to OTT (Over the Top) services like Netflix and Amazon Prime Video who started gaining market share quickly and now have a strong foothold in the media business. The traditional route of selling media to MVPDs (Multi-Channel Video Program Distributors) has faded away quicker than incumbent media networks had anticipated. In short, the bundle of all the channels provided by MVPDs became too expensive for media consumers, so they cut the cable cord and opted for cheaper solutions that still met their needs.  The typical consumer went from a $100 cable bill to a $50 internet bill with an HD antenna, $10 Netflix, $10 Amazon Prime, Hulu for $8 while still saving $22 a month. Concurrently, cell phone providers like AT&T and T-Mobile started offering free HBO and Netflix respectively with the purchase of an unlimited data plan. The dollar savings for consumers were in plain sight…snip.

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More Content is NOT Better

What the television networks should have learned from the disruption to their pow-wow with MVPDs is that more content is not necessarily better.  The bundling of networks was inefficient for consumers. Joe who only watched ESPN had to pay for the Food Network and the Hallmark channel even though he only watched ESPN. Furthermore, Joe only has roughly 5 hours of his day to allot to leisure entertainment.  This time can be used for reading a physical book, browsing social media, or watching TV among other things.  Even if Joe only watches ESPN, he only has so much time to view content.  Offering Joe the ability to watch 3 baseball games everyday is pointless. Watching 3 baseball games a day would take 9+ hours to watch and average Joe does not have that kind of time.  Targeted relevant time conscious content is key.

People are Lonely

The more internet connected our society becomes the more isolated we become from each other in real life. This is a problem.  I’m not going to quote any studies, but if you google “Loneliness in America” you can have hours of content to read as part of your daily allowance of leisure time.  We are watching and consuming content unilaterally. A person who consumes content can not talk to their TV and interact with what they are watching.  Humans crave interaction. Humans crave being connected to each other. Humans crave being social. Slowly our humanity is becoming more comfortable with talking to strangers on the internet. As we become more comfortable with communicating with strangers an amazing shift in how we consume media will spark with a vengeance. We want to be connected to each other, and we may just find that connection through media.

Community Watch

Imagine a world that you and your friends can watch a TV series together while video chatting, calling, and communicating with text. You can share with each other how you feel during the show. Now imagine that you can watch a TV series with 1 million other people that have the same interest as you.  I hate to break the news to you, but this is already happening. You may not know this, but Facebook is leading Television’s Social Revolution. You can emoji while watching content to show how you feel at different times of the content.  Chronological comments allow viewers to see what people were thinking at different times during the content. This is truly a game changer in media consumption. Right now adoption of this content is slow, but once people realize how cool this is it will explode.

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Choose Your Own Path

The next wave of content will let viewers decide what happens next in a TV show. For example, two characters get into a fight and suddenly the action stops. The viewer then gets to choose what happens next, and as a result the show takes a different path. Of all the people that watch the show a portion will choose each path. From that point on the show can split paths again and perhaps reconnect at the end.  This will promote repeat viewership and more engagement with content.