Start With Why

Colgate’s sales started to slip. So the company introduced a new product that included a new feature, the addition of fluoride, perhaps. Then another. Then another. Whitening. Tartar control. Sparkles. Stripes. Each innovation certainly helped boost sales, for a while at least. And so the cycle continued. Guess how many different types of toothpaste Colgate has for you to choose from today? Thirty-two. Today there are thirty-two different types of Colgate toothpaste (excluding the four they make for kids). And given how each company responds to the “innovations” of the other, that means that Colgate’s competitors also sell a similar number of variants that offer about the same quality, about the same benefits, at about the same price. There are literally dozens and dozens of toothpastes to choose from, yet there is no data to show that Americans are brushing their teeth more now than they were in the 1970s. Thanks to all this “innovation,” it has become almost impossible to know which toothpaste is right for you. So much so that even Colgate offers a link on their Web site called “Need Help Deciding?” If Colgate needs to help us pick one of their products because there are too many variations, how are we supposed to decide when we go to the supermarket without their Web site to help us?
    Once again, this is an example of the newest set of shiny objects designed to encourage a trial or a purchase. What companies cleverly disguise as “innovation” is in fact novelty. And it’s not only packaged goods that rely on novelty to lure customers; it’s a common practice in other industries, too. It works, but rarely if ever does the strategy cement any loyal relationships.
    Apple’s iPhone has since replaced the Motorola RAZR as the popular must-have new mobile phone. Removing all the buttons and putting a touch screen is not what makes the iPhone innovative, however. Those are brilliant new features. But others can copy those things and it wouldn’t redefine the category. There is something else that Apple did that is vastly more significant.
    Apple is not only leading how mobile phones are designed, but, in typical Apple fashion, also how the industry functions. In the mobile phone industry, it is the service provider, not the phone manufacturer, that determines all the features and benefits the phone can offer. T-Mobile, Verizon Wireless, Sprint, AT&T all dictate to Motorola, Nokia, Ericsson, LG and others what the phones will do. Then Apple showed up. They announced that they would tell the service provider what the phone would do, not the other way around. AT&T was the only one that agreed, thus earning the company the exclusive deal to offer the new technology. That’s the kind of shift that will impact the industry for many years and will extend far beyond a few years of stock boost for the shiny new product.
    Novel, huh?

The Price You Pay for the Money You Make
    I cannot dispute that manipulations work. Every one of them can indeed help influence behavior and every one of them can help a company become quite successful. But there are trade-offs. Not a single one of them breeds loyalty. Over the course of time, they cost more and more. The gains are only short-term. And they increase the level of stress for both the buyer and the seller. If you have exceptionally deep pockets or are looking to achieve only a short-term gain with no consideration for the long term, then these strategies and tactics are perfect.
    Beyond the business world, manipulations are the norm in politics today as well. Just as manipulations can drive a sale but not create loyalty, so too can they help a candidate get elected, but they don’t create a foundation for leadership. Leadership requires people to stick with you through thick and thin. Leadership is the ability to rally people not for a single event, but for years. In business, leadership means that customers will continue to support your company even when you slip up. If manipulation is the only strategy, what happens the next time a purchase decision is required? What happens after the election is won?
    There is a big difference between repeat business and loyalty. Repeat business is when people do business with you multiple times. Loyalty is when people are willing to turn down a better product or a better price to continue doing business with you. Loyal customers often don’t even bother to research the competition or entertain other options. Loyalty is not