Alberto Brea, Executive Director of OgilvyOne, caused a bit of a stir on Linked In recently with his post Amazon Did Not Kill The Retail Industry. Alberto goes on to say that Uber did not kill the taxi business, AirBNB did not kill the hotel business and Netflix did not kill Blockbuster. His premise is that technology itself is not the real disruptor.
We could take issue with any one of the examples he provides, but the real point is to understand the role that technology plays in disruption. If it, in itself, is not the real disruptor then what is? Alberto offers up the possibility it’s being more customer centric. On a simplistic level this is true. But let’s look a little harder.
Firstly, we have to overcome our own prejudices. We work in a technological industry so we like technology and we believe in its power to change things. We’re partly justified in that belief. However, we have become blinkered. All too often we believe that technology is the main differentiator. It’s why MVNOs announce they are rolling out 4G, for example. It’s why we talk about the abolition of roaming fees in Europe, but fail to mention that national roaming and international calling are not included – along with all the other complicated caveats and provisos (see The truth about roaming billshock). It’s why we’re obsessed with speed – speed that all-too-often is merely theoretical.
This begs the question what is the real differentiator? In all the examples that Alberto gave, the key differentiator was that things became easier and more convenient for the customer. Differentiation is a customer issue – it should be clearly perceived by the customer. It should not require complex explanation.
Apple’s real innovations weren’t technological – the technology had been developed by deeply techie companies such as Nokia. What Apple did was make it easier for the customer. They innovated through customer experience. And they did this by doing simple things like charging the batteries so you could use the phone straight away. They made the design simpler, more usable, more intuitive. And they made it easier for you to use your phone to do things you wanted to do.
Uber just made it easier to book a radio cab. AirBNB’s innovation was to put people who needed somewhere to stay in touch with people who want to rent rooms or houses or flats. Amazon just makes it easier to buy and sell stuff. And easier to get it delivered.
There are certain pillars to this. For example, the brand is deemed as delivering value and is reliable (safe, secure, delivers on its promises). These brands aren’t perfect, but they’re passionate about their customers and wary of insulting them. They’re also focused on moving forward, improving, innovating, never being satisfied with the status quo.
Now compare that to the mobile industry where things move slowly, technology is to the fore, and customer experience is often secondary to the internal needs of the business. The industry is ripe for ‘uberfication’. When you read our post on Vodafone’s new offer Voxi, ask yourself what is wrong with what Vodafone has done? My view is that age is a mindset and no longer defines behaviour. I know people in their 50s who have the same behaviour as 25 year olds and 25 year olds that behave like 50 year olds. Therefore the commonality is about interests and behaviour, not age.
When you design for customer experience the 80:20 rule is important. Eighty per cent of what you do is common to everyone. It’s about ease of use and politeness, trust and so on. The secret sauce is the 20% that makes the thing zing.
Digital opportunity is everywhere, but in one sense it’s just business as usual. The railroad and the motorcar disrupted the horse and cart. The airplane disrupted the transatlantic liner. Money disrupted bartering. History is littered with examples of where things have been improved and previous approaches obsoleted. This is what progress looks like folks. But we didn’t invent progress.
The key is to be able to point a finger at something that doesn’t work well and then figure out whether you can make it better using a different approach and, critically, whether anyone will pay to make it better. If someone will pay then there’s a business in it.
Digital technology is just the latest toolset to improve things. And it’s one that the MVNO industry has not yet fully embraced in its search to improve its business performance and differentiation. Don’t out-telco the telco – be different. To do that you need to think fresh and focus on real-life problems that your customers would appreciate solving.