I catch up with Joe Calloway in the hotel lobby during OneVoice, the 2008 Broker-Dealer Conference organized by the Financial Services Institute. A busy man with a tight schedule of speaking engagements, he arrived in Orlando the night before and is leaving later in the day for another event in Houston.
Who: Joe Calloway, branding consultant and business author
Where: Trevi’s, Omni Hotel, Champions Gate, Fla., January 28, 2008
On the Menu: Minestrone soup, learning constantly and avoiding becoming a commodity.
He begins lunch at the hotel’s Italian restaurant by ordering a minestrone soup and starting to rehearse his keynote speech, to be delivered in two hours. It takes me a little while to get him off a string of fairly generic observations of what makes managers succeed and into the meaty stuff that has earned his books praise from the New York Times and a variety of industry publications.
“The greatest danger financial advisors face is commoditization,” he finally declares. Like bankers, whose conference he will be addressing later, FAs are increasingly selling a very similar range of products across the industry. The industry trend has been a shift from selling specific branded products toward working for the client, which means selecting the best product that meets the client’s needs regardless of where it has been manufactured. Moreover, industry deregulation and a revolution in information technology ensure that best products are quickly emulated by other firms.
Sure, some stock pickers do better than others. But over time the law of averages obtains. Calloway, who seems masterful in applying today’s headlines out of the newspaper, especially from the sports pages, to problems in business management, observes that it has been a while since anybody in Major League Baseball hit .400 over an entire season.
The result for the FAs, says Calloway, has been that they run the risk of becoming a commodity. “And once you’re a commodity, price becomes the only factor that differentiates you, which means that your margins will come under a lot of pressure.”
The only way to differentiate in this industry, to provide true value-added, is by providing superior customer service. By developing a relationship with your client which is exclusive, which makes you indispensable and which distinguishes you from your competitors.
This message Calloway has made his trademark, which can be seen from the titles of his best-selling book, Becoming a Category of One: How Extraordinary Companies Transcend Commodity and Defy Comparison. His newest is called Indispensable: How to Become the Company Your Customers Can’t Do Without. Both are devoted to the same theme.
Excellence Across IndustriesCalloway believes that best practices exist across industries. In fact, he is convinced not only that successful managers do things similarly regardless of what they do, but that they look at other, often unrelated industries to learn lessons that can be applied to their own field. Once more, he is quick to quote the day’s paper.
“I was just reading about the New England Patriots,” he says referring to the upcoming Super Bowl. “A large part of their success is how many ways they have to score. Robert Kraft, the team’s owner, has been highly successful in business. It’s not surprising that he is applying his business strategies to football.”