The most revolutionary products fulfill a previously unmet need. I recall my first iPod. I never considered that every cassette, album and CD I had ever owned might fit in my pocket. With the iPod came the end of a lifelong search for the ideal music storage vehicle.
Once they breakthrough, great products work to maintain their established beachhead. That means refining or evolving their products or services to continue to solve people's problems. In the best instances, these are problems people didn't even know they had.
In my case, now that I had all my music in my pocket, why not add my calendar, address book and phone to the mix. This kind of focus endears brands to us and forms tribes of loyalists. This is the path to category leadership, and with it comes imitators.
Next comes a crucial intersection:
- Take the difficult route: Continue to solve different but related problems. Limit profits by budgeting for major investments in top talent, research and development and the launch of new product lines.
- Go mass: Sacrifice the affinity of your base by making your product or service more affordable, thereby growing your audience.
- Take advantage of new revenue streams: Allow your product or service to become a means to other passive income. This typically involves taking advantage of your customers' needs or weaknesses instead of continuing problem solve for them.
Very few companies choose option A. It's not just because it is difficult; the allure of ever expanding profits is just too great. Businesses become so obsessed with growth that they cause their own undoing. I call this the greed trap.
The proliferation of social networks, constant texts and email notifications has tethered us to our cell phones. Data plans, streaming content and constant communications have lead to an "always-on" lifestyle. Adults and children alike have a growing compulsion for screen time. Being away from our phones causes separation anxiety. We are addicted – and the resulting behavior is pretty ugly.
In the 1950s and 60s people walked around smoking. There were ashtrays everywhere: on elevators, in cars, in hotel lobbies, bars and restaurants. Instead of smoking, what do you see people doing in these same places today? The smartphone industry isn't solving problems anymore; it's creating them.
The greed trap is a failure to think strategically and act responsibly. It happens when companies and their leaders stop thinking about their clients and focus on themselves. Eventually, the result is backlash. We're just beginning to see this with cell phones, and I predict a serious increase of it in the future.
Here are three questions you might consider when planning for your organization:
- What problem does our company solve for its clients?
- How would our customers be impacted if your organization closed its doors?
- What common customer issues in our space remain unsolved?
Asking yourself, your colleagues and your customers questions like these are the key to sustainable growth and customer retention. Take the time to answer them and your next step will be profitable for both you and your customer.