Around the turn of the 21st century, standard management practice was to check-in annually with a company’s customers. Often called a “Customer Satisfaction Survey” market research departments outsourced the data collection and analysis to an external research company.
With sample sizes often as small as 300 responses, the reliance on statistical science was heavy. This created a need for highly-trained researchers who could extract relevant stories and implications out of the data. Lots of great insights and useful guidance often came out of these studies, and still do.
Also around the turn of the century, I was responsible for the development of Pfizer’s (formerly Warner Lambert’s) business at several supermarket and drug stores chains across the country.
Ecommerce at the time was in its infancy, and internet access was still mostly through clumsy and slow dial-up modems. But it was easy to see that someday brick and mortar retailers would see an influx of new competitors, online.
Some of those online retailers would enjoy the advantages of a continual flow of customer feedback that an annual study could never provide offline. I saw an opportunity to create a blue ocean, providing chain retailers with a continual flow of customer feedback. I call it “customer active listening”.
I left Pfizer, got together with a small team of software developers, and we created a company now called inmoment. Comparing our offering to that of the market research firms, here’s how our offerings diverged:
We…
*removed entirely all need for statistical analysis.
*reduced the use of demographic and geographic questions in our questionnaires.
*added a new service: automated delivery of reports and alerts directly to managers up and down the organization chart.
*augmented the annual survey, asking different questions, and systematizing the process to provide a continual flow of customer feedback.
This is the formula later articulated in a 2005 Harvard Press book called, Blue Ocean Strategy.
The book introduces useful language as well, helping us clearly see and articulate something new, an innovative strategy that renders the competition completely irrelevant. The language begins with defining two markets (oceans):
(1) Red Ocean
This is a marketplace where many people or companies are offering the same product or service. Each competitor might be described as “just another_____”.
If your company, or your personal resume, can be described as “just another___”, your margins (or your pay) may not be what you would like. Your rate of customer conversions or job offers may be lower than it once was. Your offering is bleeding sales and margins, certainly an ocean turned red.
(2) Blue Ocean
Create a company in this type of market, and you have just made all competition irrelevant. You are NOT just another_____. And no one offers what you do. This is what Guy Laliberte did when he founded Cirque du Soleil. He had been a circus performer, identified an opportunity, and left the circus to a unique offering, to a new audience, certainly an ocean clear and blue.
Compared to the circus, Guy Laliberte…
*removed animal acts entirely
*Reduced “the 3-ring circus” to 1 show at a time
*Added music and theme
*Augmented the use of acrobatics, making it more prevalent
Cirque du Soleil appeals to an adult audience; the circus more to children. One would never consider one entertainment option against the other. Circuses are irrelevant competitors to Cirque du Soleil. So what are the results? As of 2005, Cirque du Soleil had performed for more than 40 million people in more than 90 cities worldwide. In less than 20 years they achieved revenues that took the largest circus company in the world 100 years to achieve.
Knowing the language and the formula would have helped me immensely in helping get inmoment off the ground. It might have helped Guy Laliberte in his early days at Cirque du Soleil. If you are actively seeking a way to create your own blue ocean, rendering your competition irrelevant, I wish you every success.
