If there is a silver lining about the current supply-side challenges of the economy, it’s that the playing field is being leveled. It doesn’t matter if you have the lowest prices if you can’t get anything — at any price. 100% of zero is still zero. The era of discounts has just been put on hold. If you have bigger competitors in your region that relied on huge volume discounts to attract business, they are now going to feel the pinch way more than you. Why, might you ask? Because their pricing power was their competitive advantage. They relied too heavily on it.
Disruptive innovation
The term disruption is often referred to in the sense of new technology displacing an incumbent. Think of the digital camera and the cordless phone. Disruption also applies to business models.
“Disruption is less a function of the innovator’s skill than of how fat, happy, and lazy the incumbent is.”
– Scott Galloway
The incumbent’s laziness here is an important distinction. Why did Uber and Airbnb make such amazing inroads into their respective markets? Because the incumbents could be considered fat and lazy. Look what’s happening to banking right now. The cost of physical bank branches and only focusing on top-tier clients gives way to disruption via PayPal and Square. They go after smaller clients and have no fixed real estate. Don’t cry for the banks; their profit is up, but do customers like them? In a recent Gallup poll, only one-third of responses showed a high approval rating for banks. The other two-thirds showed “some” or “very little” confidence.
Shortages are kryptonite
When a big competitor can no longer provide pricing power through discounts and volume, they lose their superpower. Like Superman with kryptonite, they become mortal again. Vulnerable. If the price and availability are the same everywhere you go, why not go with the small firm that values customer experience? You know what there’s plenty of? Time. Supply chain disruptions can’t take the 1,440 minutes each of us is given every day.
Your superpower is time
That really great e-commerce site with the automated chatbot on the homepage? Useless if they can’t deliver. The shelves of stacked products and deep discounts? Gone — at least for the moment.
When a customer comes in now, they are looking for anything that will solve their problem. They are no longer interested in what choices they have for products; they want to know what choices they have for solutions. You know who can thrive in moments like this? You. The shop owner who knows how to spend time with clients to really understand their needs. The business that takes customer experience seriously and collaborates on creative solutions with customers. The one that thinks outside the box to put together a package of “whatever is available” and turns it into “solved my problem.”
Big competitors are scrambling to figure out how to maintain revenue now that the “stack ’em deep and sell ’em cheap” strategy is a bust.
Capture your market
Consumers can be unpredictable and selfish. They are also afraid of change. Now is the moment to take advantage of the poor service of your larger competitors and capture their hearts with excellent, personalized service. When the slowdowns at the ports open up and things start getting back to normal, they will have permanently changed their habits. Your customers are thinking, “Why go back to the discounter when this business took care of me in my time of need?” People will always remember how you made them feel.
This is your moment
Disruption comes from the next great technology, but it can also come from well-timed surprises. Little moments of delight during difficult times build loyalty, consistency, and trust. If you haven’t already, coach your team to focus on active listening and really trying to understand the customer’s needs. The solutions don’t need to be elegant; they just need to work.
When the dust clears, everyone will look back on these times as the moment they re-evaluated everything. As they are re-evaluating your competition, give them every reason to consider you.
