Is perfection the answer?
4 MINUTESHow many companies pride themselves of their excellence and claim to be the best in the industry? In a digital age economy where consumers are more and more demanding, being average just isn’t seen as an option. However, a little-known but powerful theory in marketing strategy might dismantle this commonly held assumption. I’m talking about “The myth of excellence”- the argument against the belief that a company should try to be good at everything it does. That is to say, to excel at all the components of its offer - price, product, service, experience and access.These are the 5 key elements that are usually important to customers. They value honest price, look for consistently good products, value services that meet their everyday requests, want to be respected and be offered tailored solutions and get what they want how they want it. It seems intuitive to believe that if companies invest their resources to perform well in all these areas, their success will be guaranteed. As it often happens with marketing strategy though, we may need to think again.“The myth of excellence” comes from the work of internationally renamed strategist and former vice-president of Capgemini Ernst & Young, Fred Crawford, and strategy consultant Ryan Matthews. According to them, being the best at everything isn’t desirable for businesses, because it takes all the differentiation away. "The predictable outcome [is] that the company ends up world-class at nothing; not well-differentiated and therefore not thought of by consumers at the moment of need."So how do market leaders succeed instead? They engage in consumer relevancy, which is the ability to conduct business in ways that customers find meaningful. What does this mean in practice? These companies focus on excelling at one element of the transaction (i.e. the element most important to their target customers), differentiate on a second, and just meet expectations on the remaining three. It is argued, it is not sustainable to invest the same resources on all five elements, and consumers don’t want them to either.The research conducted behind “The myth of excellence”, which involved more than 10,000 consumers and interviews with directors of global leading companies, showed that customers don’t need “world-class performance” or “excellence” from all the elements of a company’s offering. They much prefer companies that have a strong and well defined value proposition, that are consistently good at what they do and can be relied upon in today’s rapidly changing world. As such, domination or differentiation on more than one attribute isn’t desirable, it confuses consumers and results in resources being wasted.However, it is important that companies still achieve industry-par (i.e. average) levels on the 3 remaining dimensions. The definition of average can continually change, as it depends on what other companies in the industry offer, and failure to keep up can cause scores to drop.This strategy has guaranteed longevity to some of the most successful companies in the world. Think about Zara for example, and why you go there. First of all, they have affordable prices, but also because they offer trendy and design clothes. However, I’m pretty sure that most of you don’t go there for the service (looking for a sales assistant is a similar experience to the quest for the Holy Grail) or a bespoke experience. Zara is a great executor of consumer relevancy: they excel on price, differentiate with their great products, and are average on service, experience and access. Does this make Zara less of a great brand? Not at all, that’s what makes it a strong top of mind brand!Now think about Starbucks. Their coffee is good enough but the prices aren’t what I would define as affordable, yet it still is the first place I think of when I need caffeine. And why is that? I think it’s because, no matter where I am in the world, Starbucks provides me with the consistent and comforting experience of feeling at home. It is also great that I can have access to the most customised cup of coffee without feeling uncomfortable (I’m the kind of person who asks for unsweetened almond milk, to give you an idea). Starbucks’ success lies in the experience it provides to the customer, and differentiates with access, customisation being at the heart of their business model. Their prices aren’t particularly competitive, and their service and products are average, and yet it’s one of the most successful brands in the world!Marketing strategy is often about trade-offs, and companies shouldn’t be afraid of considering which elements to prioritise. That is not to say that companies should settle for the minimum and not strive to improve, but more that they should be strategic about where they invest their energy and resources! Read more