There are quite a few companies out there that just seem to have everything figured out. Just look to Quicken, Amazon, Coca-Cola and Toyota, or even some smaller companies you’re personally aware of that are so successful that they can’t keep up with customer demand or are maybe even forced to turn business away.
By: Scott Seroka
When companies achieve such high levels of success, some maintain it by constantly reinventing themselves, by always staying relevant and providing ongoing value to customers. But then there are others that are either afraid to change and adapt to maintain their success, or even worse, become complacent or arrogant while riding the wake of their success.
These are the companies that get repositioned into second place by a formidable competitor, and then third place by another, and so on and so on… Below are some examples of high-profile brands that were once leaders in their categories that have either lost their lead, or have perished.
Countrywide. At one time, Countrywide was the US’s largest subprime mortgage company. And although many believe it was the financial crisis of 2007 and 2008 that led to its demise, the fact that it was found guilty of defrauding federal mortgage giants Fannie Mae and Freddie Mac at the height of the housing crisis cannot be ignored and hence, sealed its fate. Unfortunately, other financial companies also failed due to deception and unethical business practices. But in the end, everyone remembers Countrywide.
Harley Davidson. It was about eighteen years ago when I was at an after-hours business event where Harley Davidson’s CMO shared the company’s strategy for making the Harley brand more appealing to younger riders. The company had legitimate reasons to be concerned. At the time, the average age of a Harley rider was approximately 43, and many other motorcycle manufacturers entering the market were taking giant bites into Harley’s younger-demographic market share by offering higher-performing, better-built, higher-tech, and more reliable motorcycles at much lower price points. And to attract those who liked the looks and lines of a Harley Davidson, some manufacturers built bikes strikingly similar in looks and design, competing on price, technology, build quality, service and warranty.
It was no secret these were direct and unapologizing hits to the Harley brand. Despite numerous, aggressive branding and marketing strategies to counter these competitive attacks over the years, the average age of a Harley rider continues to rise. And although Harley is making electric bikes to try to appeal to the younger generations, The Harley Davidson brand may need to do even more to retool its brand.
Sears. There are many theories about why Sears went from one of the top, most beloved retailers of all time to a company that is dying a slow death. From a brand perspective, while it tried to be all things to all people by offering tools, lingerie, a driving school, a photo studio, an optical department and many other things, it simply couldn’t compete against specialty retailers and of course, amazon.com.
And remember Blackberry? The final straw occurred when customers painfully suffered through a three-day interruption in service. Competitors gladly came to the rescue by offering disgruntled Blackberry owners deep discounts on trade-in programs.
What about Garmin? Do you have one mounted on your windshield? Why would you when newer cars come with built-in GPS and smartphones that have as-good-as, or even better navigation technology that is free?
These failing brands have taught us what I refer to as the ways seven ways leading brands lose their lead. Aside from poor financial management which often leads to bankruptcy, here they are:
- Failure to innovate, or at least introduce new products that satisfy minimum customer expectations. When camera manufacturer Canon released a long-awaited update of their prosumer camera, angry and bewildered photographers headed to forums, blogs and social media criticizing the leading camera manufacturer for releasing a product with three-year-old technology. Many called it the “last straw” and vowed to sell their gear to invest in better camera systems. As one person stated, “It’s like buying an expensive brand-new car and discovering that it doesn’t have Bluetooth!”
- Ignoring trends and waiting too long to see how they play out. You’re likely familiar with the saying that there are three kinds of companies – those that make things happen, those that watch things happen, and those that wonder what just happened. Which one are you?
- Not paying attention to what the competition is up to. Every day that goes by, your competitors are one day closer to launching a new product or service to make yours less relevant.
- Not listening to customers. Customers are on Twitter, Facebook, LinkedIn, Yelp, YouTube, Glassdoor, blogs, and forums. They are filling out surveys and sending emails. They are talking about your products and your services. Are you listening? Many are not.
- Loss of agility. One of my favorite quotes comes from Christopher McDougall, who said: “Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn’t matter whether you’re the lion or a gazelle-when the sun comes up, you’d better be running.” In other words, if your company doesn’t move fast, you’re already defeated.
- Taking the focus off the customer. Your customers need to be on the very top of your corporate hierarchy because businesses need customers – happy and loyal customers, to survive.
- Deception and unethical business practices. Look what happened to Wells Fargo. They were so focused on rapid growth and market dominance that their people, who felt intense pressure from above to cross-sell additional products and services, started opening fake accounts to meet arbitrary numbers to keep their jobs. The company was dragged through miles and miles of mud and was forced to pay more than three billion dollars in fines for the scandal. However, that price is small compared to the self-inflicted damage they’ve done to their brand.
The fact is, every large brand has a following of loyal customers. Some will be patient, others will not. But very few will wait around forever or tolerate deceit.