The best companies know what they’re good at and they tend to “stay in that lane.” For example, Ace Hardware is known for its helpful customer service, Nordstrom is renowned for its brand of legendary service, and Zappos is a leader in fast and amazing service. But what are none of these companies known for? Being the low-price leader. Instead, they are competitively priced and win based on the value of their exceptional customer service. They drive in the “customer service” lane.
On the flip side, you have the dollar stores. They advertise an incredibly low-priced product, and their bargains are sometimes amazing. But, unlike Nordstrom or Ace, you don’t find sales experts standing in the aisles ready to help. What you usually find are friendly people who ring up your merchandise simply and with a smile. There is nothing wrong with that. It works well for them. They have chosen the “price” lane.
What really got me thinking about this was the recent news that Radio Shack would close some 20 percent of their stores. Reports indicate that they’re struggling. Or perhaps they’re just ridding themselves of low-volume stores. How could this happen to a retail-industry icon? I may not have the entire answer, but I have a theory as to Radio Shack’s current situation.
The store I visit in the mall today is very different from the one I remember as a kid. I remember going to Radio Shack for things I couldn’t get elsewhere: batteries, wire and cables. They also had cool merchandise that other stores didn’t sell. Today, their merchandise doesn’t give me that impression. Are they in the “hard-to-find-in-other-stores” electronics business, the phone business or the TV business? Are they trying to compete with Best Buy and other electronics stores? At some point, they switched lanes, but I’m still not sure to which one.
Back to the companies mentioned earlier; Ace, Nordstrom and Zappos. We know which lane these companies occupy. There is no confusion. They have chosen to compete on customer service. Walmart and the dollar stores compete on price, another well-defined lane.
So, the question is “Do your customers know what lane you’re in?” In business, making a lane change isn’t illegal—you won’t get a ticket. But if not done properly, you run the risk of accidentally confusing the customer. And a confused customer won’t buy.
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- Don’t sell your service, sell your smarts
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- Taking the mystery out of exceptional customer service
Shep Hyken is a professional speaker and best-selling author. For more information on Shep’s speaking presentations, call 314-692-2200, email firstname.lastname@example.org or go to www.hyken.com.