Companies need depth of vision to succeed, which means predicting what the customer will want before they realise they need it.
When the CEO of appliance retailer Godfreys was sacked in 2016, the board justified its decision by saying he had “failed to spot a market shift”. He had overlooked a change in consumer preference from floor vacuum cleaners to stick vacuum cleaners.
As well as costing the CEO his job, that inability to spot a shift in the market cost Godfreys a large chunk of market share.
You may well ask what this has to do with you as a small-business owner. After all, as the CEO of a public company, the Godfreys leader was answerable to a board. “I run my own business. No-one can sack me.” You are right that you may not be answerable to a board, but the fact is that you are answerable to your customers, and they can most definitely “sack” you. They probably won’t tell you why – they’ll just leave and find another supplier who does demonstrate depth of vision.
Depth of vision is the ability to look ahead and see what your customers need before they realise it themselves. It is commonly called “extreme customer-centricity”, which is just a fancy way of saying “we keep our customers at the front and centre of all we do”.
While this may sound in easy in theory, basing all business decisions around what the customer needs can be hard. That is why legacy industries such as taxis, video rental shops, record companies and hotels are all feeling pain.
Advertising executive Alberto Brea described it well when he shared his views on why legacy industries fail so spectacularly…
Putting customers front and centre is not a new concept. Many businesses have always sent out surveys, sought feedback and professed to “listen” to what customers want. But do the customers themselves even know what they want?
Surveys and the like are reactive in nature, and most people don’t know what they need until they see it.
In their book The Third Industrial Revolution in Global Business, management consultants Gary Hamel and CK Prahalad wrote, “Consumers are notoriously lacking in foresight and are unable to imagine products that do not yet exist.”
To find out what a customer really needs, we have to predict those needs; we need to look at the niche businesses, the fads and the trends that are brewing, because those outlier markets while small in number reveal what the future needs of our customers will be. In other words, you need “depth of vision’”, the ability to look further ahead than most and adapt your strategies accordingly.
For example, when online fashion store Showpo founder Jane Lu built her website in 2010, she predicted that people would find their mobile device more convenient for shopping than their desktop computer. While that observation seems obvious now, that was not the case back then. She took mobile seriously, long before others did, and that “early adopter” behaviour contributed to her fast growth. She is on track to turn over $100 million by 2020, so looking ahead definitely paid off for Lu.
Booktopia founder Tony Nash has a simple strategy for staying ahead: he goes overseas.
“I have always looked offshore in terms of seeing what’s happening next,” he says. “Some say, ‘You’ve been so incredibly visionary’, but a lot of the time I’ve simply gone to the US or the UK and looked at what’s going on over there with the internet, with e-commerce, then came back to Australia and basically implemented it.”
Not so smooth
For some industries, the ride is not so smooth. I met a taxi driver who bought three licences from the Victorian government in 2012, borrowing against his house to the tune of nearly $800 000. At the time those licences seemed like a sure bet. But a mere four years later, the government overhauled the commercial passenger vehicle industry, buying back licences at a fraction of their worth.
Now that taxi driver says he has a debt of $670,000 hanging over his head “like a noose”. However, other taxi drivers saw the writing on the wall and sold their licences before their value was wiped out. They had the depth of vision to see what was happening and got out first.
Even sectors such as associations need to look ahead. For example, an association that has millennials or generation Y as members or future members should be looking ahead and taking steps to rethink its membership models.
Unlike their generation X and baby boomer cohorts, these digital natives are increasingly turning to the freelance “gig” economy for work as its flexible nature suits their lifestyle. For others, there is no full-time work available. The result? Association membership is sliding, and without forward thinking and a restructure of their membership model, associations will find themselves no longer viable and at risk.
Ahead of the customer
Does every entrepreneur need to have depth of vision, or just those who seek to disrupt a legacy industry? For example, does a cafe owner need depth of vision? A car wash company? A fashion retailer? You bet. Everyone does.
The decision to not stay ahead of the curve shows up in the smallest of ways:
Depth of vision is not just about being ahead of the competitors, it is about being ahead of the customer and predicting what they will want before they realise they need it.
Customers look to businesses for leadership, to tell them what is happening next, what to care about. If we stop adding value to their lives, we lose their trust, and in this era, if we lose their trust, we lose everything.
Bernadette Schwerdt, founder, Australian School of Copywriting and author of “How to Build an Online Business”