The Underdog Effect

How indispensable are you?

[This is not a political post, so please don't send me notes or comments about politics. They will be ignored. :)]

Actual (but perhaps not 100% accurate) conversation that I participated in this weekend at a BBQ with someone I just met. You enter in the middle of a 5-minute conversation about technology...

Guy I just met: I couldn't live with out texting. Makes like so much better.

Me: I've never really texted much since I've always stuck with a basic cell phone, though I did just breakdown this week and get an iPhone. Maybe I'll start texting more now.

Guy: Oh man, I'd love to get an iPhone, except that Apple is--I probably shouldn't start talking politics, I just met you--but Apple is waaay left. In terms of their politics, I mean. Way left.

Me: Well, you know, they're in the Bay Area, so our way left is like their center.

Guy: Still, I don't think I could buy one of their phones because they are so left. But so is Google and I'm not going to stop using Google. [smiles and nudges me.]

[scene.]

Substitute any objection for this gentleman's aversion to "leftist" corporations. Are you Apple or Google in your customer's mind?

How indispensable are you?

Or put more directly: are the tangible benefits of your product so great that people will continue to do business with you even if they disagree with you?

How indispensable are you?

Don't get me wrong. I don't think your values should be out of step with those of your customers. That'd be dumb. I'm just saying that creating a kick-ass, truly remarkable product goes a long way. Start there.

Only the average care about averages.

David over at 37 Signals has a great post today about the problems with averages. It boils down to this: making decisions based on averages (average wait times, average turn-around, average production) means your making decisions on flawed data.

If a call center answers its first 900 calls in 1 minute and its next 100 calls in 20 minutes, it's average pick-up time is just under 3 minutes. Not too bad. Problem is, 10% of its customers waited a painful 20 minutes. Not too good.

Reading David's post will give you some better metrics than averages for measurement. I just want to point out that no underdog brand ever got anywhere by focusing on averages.

Underdog brands focus on outliers.

They measure where they are having the most success and they do more if it. They find where they are failing miserably and they learn from it. And though it may not be wise to get mired in analyzing extreme outliers--Black Swans--you can usually learn a lot more from outliers than averages.

Don’t mistake habit for loyalty.

Most of your customers are not loyal.

They are lazy and self-centered. (We all are.) This doesn’t make them loyal, it makes them habitual.

Your customers did not make their first purchase from you out of some deep-seeded personal devotion (that’s loyalty). They bought because they thought you could solve a problem or reduce a pain or provide some pleasure . And they continue to buy from you because you met or exceeded expectations or because it is too much of a pain in the ass to find another alternative (that’s habit).

Buying from you is a habit.

Habits are not always bad. Exercising is a good habit. But being delusional about having loyal customers, when you actually have habitual customers is dangerous.