The Unconventional Thinking of Dominant Companies: The New Formula for Market Domination

Copyright © 2018 by Jim Bramlett.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Any people depicted in stock imagery provided by Getty Images are models, and such images are being used for illustrative purposes only.

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Rev. date: 07/10/2018

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Contents

Acknowledgements

Foreword

Chapter 1 – The Discipline of Market Leaders

Chapter 2 – The Internet & E-commerce

Chapter 3 – The Hassle Quotient Formula

Chapter 4 – Amazon

Chapter 5 – Uber and Others

Chapter 6 – The Old Guard

Chapter 7 – 5 String Logistics Solutions

Chapter 8 – Dominant Compared to Trade-Off Companies

Chapter 9 – Companies that Get It

Chapter 10 – Durable Goods Companies and the Hassle Quotient

Chapter 11 – It’s the Small Things that Count

Chapter 12 – Summary

Dedication

Without my lifelong partner and bride, this book would not be possible. I could write an entire another book on what I put her through via various phases of my career. She always supported me even when I had crazy and bone-headed ideas. She made our family work and though it’s not a romantic novel, I am dedicating this book to you Pam. I love you and your patient loving way allowed me to go through experiences that culminated in this book.

I also want to thank my dear friend, author and entrepreneur Robert Ladd for your guidance, editing skills and overall support. You are an inspiration to me and I could not have completed this project without your unwavering support even though you were up to your eyeballs growing your own business. Thank you, my friend.

Acknowledgements

I have always liked surprising my wife. I’ve surprised her with trips, parties and special gifts. Some of the surprises were quite elaborate and took immense planning. I would include the writing of this book in this category. When I started writing this book I decided that I wasn’t going to tell anyone. I largely did that because I have never written a book before and didn’t know if I would or could do it. I knew it would take a lot of time and effort and so better to be safe than sorry and keep it to myself.

Once I got organized and decided on the content, it became fun and a mission. However, I never let the secret out except to my friend Robert Ladd who helped guide me on overall process. I decided that I would surprise my wife with the proof copy on a special trip we took to Mexico for a milestone birthday. That’s right, I didn’t mention the age of this milestone. I’m smarter than you think. Anyway, this trip was special as we decided to take our entire family. We took our three kids, their spouses and our wonderful 6 grandchildren. What better place than to let her know that I had written a book. A real surprise as I don’t consider myself a writer, nor even an ardent reader.

I got through the deadlines and ordered the proof and even paid expedited shipping so that the book would arrive before we departed on the trip. In fact, when the book arrived, I quickly opened it, inspected it and placed it safely into my backpack. Whenever I travel, I always take my backpack and this way I would ensure the gift was not forgotten.

However, as fate would have it, when we loaded the car for the airport I forgot to load my backpack. I was so excited about the trip itself and getting our huge suitcases in the car and making the 40-mile trip to the airport in time, I simply forgot it. I didn’t realize I hadn’t included my backpack until we arrived at the airport remote parking lot and unloaded the suitcases. Immediate panic set in and a few choice curse words shouted without revealing the reason for my attack to my bride. I simply told her I forgot my backpack and had to have it. I finally told her that I had a very important gift for her in the backpack.

I quickly looked at my watch and it was 6:35 AM and we had a 7:50 departure. What to do? So, I did what any guy would do. I called my buddy Bart Bergman. You see, Bart had previously bailed me out years ago when I took my 16-year-old daughter on a vacation and she forgot her photo ID. He rescued us by going by our house and finding her driver’s license and speeding to the airport and handing it off just in time. Could Bart do it again? He lives 20 minutes from our house and then a 40-mile drive to the airport and do that in about an hour? I still needed to clear security and get boarded before shutting the door 5 minutes before departure. Let me say this. Bart Bergman should be a Nascar driver. He got it done and for that I am forever grateful. I was able to surprise my wife and entire family and presented the proof in Mexico.

Now of course I had an ulterior motive for taking the proof to Mexico. We were there an entire week and I figured that multiple members of my family would have time to read it and provide me feedback, commentary, check my grammar and help me edit it. So, for that, I want to thank my wife Pam and my daughter Angie for giving me excellent proof-reading services. The others wanted to help but with 6 grand kids under the age of 6 running around, it was a busy and hectic schedule. I love my family and this book is for them.

Foreword

In my 40 years of working for companies, including my own, I have probably attended 40,000 meetings. Yes, that is an exaggeration but feels it like that. Meetings are crucial to companies coordinating efforts, communicating and being in sync. They also are often a huge waste of time. Now that I work for myself and have no employees, I can be so much more productive.

My experience with meetings is that we typically discuss revenue, budgets, how to cut costs, how to increase sales, how to refine products, add new services, develop new technology, develop new programs, re-organize staff, hire new people, change operations, purchase new equipment and a myriad of other topics.

I don’t ever recall a meeting starting like this: We are here today to figure out how we can make it easier for our customers to do business with us., or let’s figure out how we can remove the number of steps it takes a customer to buy from us. Never had a meeting where someone wanted to reduce the number of keystrokes to navigate our website. Don’t recall any meetings where our sole focus was on developing a mobile app that would take less effort for a customer to enjoy a better experience with our company. Or, how we could layout our store where customers can more easily find what they are looking for and spend less time shopping?

You see, almost all the meetings I’ve ever been involved with improving internal efficiencies, making more money, spending less, charging more and never has been led by what customers really want. Now, I have worked for a lot of good companies and even a few great ones, but none that are dominant. I define a dominant company as one that has double the market share of their closest competitor and is the most recognizable brand in the industry in which they participate.

You see dominant companies put the customer first in everything they do. They know that if they take care of the customer, the rest will fall in line. It’s easy to say, but not easy to do. If you ask any CEO or President of a company, they will tell you they put the customer first, but most of the time, it’s just talk. They don’t practice what they preach. Good and even great companies take care of customers but don’t center every decision they make about how it impacts the customer. Dominant companies do. It’s a more natural tendency for good and great companies to focus on the bottom line first. I’ve heard executives say, This would be a great company if it weren’t for customers. Not exactly putting the customer first with those sentiments.

While they may not admit it, dominant companies use a formula to get to that position. They ensure that they provide the very best customer experience, at the lowest possible cost, while requiring as little time and effort for a customer to engage them. Good and great companies will trade one of those variables off for another. They might give you the very lowest price but trade-off the experience. Or they might give you the lowest possible price but require a lot of time and effort to get that price. Or, they provide an outstanding, incredible experience but their prices reflect it.

Amazon is the very best example of a dominant company using the formula where they don’t trade-off anything. They enable a consumer to engage them with little time and effort, have very competitively priced products and the experience has been outstanding, especially compared to competitors. I’m going to cover multiple dominant companies and how they utilize a specific formula to dominate and they never rest. Dominant companies know, especially in today’s world, they might be only one innovation away from regressing from dominant to great or good.

A company doesn’t have to be large, like Amazon, Uber, Facebook or Google to dominate. A floral shop operating on Main Street, can be the dominant florist in its area simply by putting the formula to work. And, it doesn’t take transformative change for many. It can be a series of very small things that can make the difference. It can be simple yet very difficult to go against the grain and do away with the trade-offs and elect to dominate in every element of engaging customers.

It takes an unrelenting focus on the customer and it isn’t easy to adhere to the modern formula to achieve dominance. I believe you can boil it down to mathematical formula I dub the Hassle Quotient.

Dominant companies have figured out how to make it easy to be engaged by customers, requiring little time, providing competitive pricing and the best user experience. The dominant companies won’t admit or recognize the Hassle Quotient but when you peel back the proverbial onion on how they go about business, they absolutely focus on the customer and enable customers to engage them easier than other companies. I hope you enjoy the book and glean something that you can use in your personal or professional life.

Chapter 1 – The Discipline of Market Leaders

Let me give you a little context so you know where I am coming from. I have been working, at least part-time jobs, pretty much since I was 13 years old. It was the way I was brought up and work ethic was instilled in me at an early age. Back in the day, I was taught that if you work hard, good things would happen. I started my first real job before the personal computer was launched. I love the quote by Lou Holtz that he has written more books then he has read. I’m a bit like that. I love business and love the stories of entrepreneurs of how they started businesses. I enjoy hearing about the failures. A mentor once told me that, to succeed, one must fail. If you don’t know failure, you really won’t know and appreciate success.

I have seen multiple trends and theories on business. There were two business related books that I read that did strike a chord with me. The first was the EMyth, Why Most Businesses Don’t Work and What to Do About It by Michael Gerber. The myth was that owning a business often isn’t what one might think. It can often just be buying yourself a job and not giving you the freedom, one might think when owning a business.

The second book and one that really had an impact on me is The Disciplines of Market Leaders by Michael Treacy and Fred Wiersema. The 1997 edition was published before the internet became the mainstay of so many businesses. It was at the forefront of the original dot com era. And, the theories brought forward absolutely, positively makes sense, or made sense at the time when I first read it.

The proposition they support is that no company can succeed by trying to be all things to all people. It, instead, must find the unique value proposition that it alone can deliver to a chosen market. It professed that companies focus on a singular discipline and not try and be all things to all people and the options for the singular discipline were:

• Customer Intimacy

• Product Leadership

• Operational Excellence

Like I said, this book was written before the internet and before companies like Amazon, Google, Facebook, and Uber were founded. I believe the internet has revolutionized how business is now done. It’s had a bigger impact than the industrial revolution and even more profound than the computer becoming part of every-day business.

Companies like Amazon are the antithesis of the Discipline of Market Leaders. They do not focus on a singular discipline. They strive to be leaders in every discipline and not just one. They are a dominant company and not just a good or great one. I suggest the internet has changed the rules and now allows many companies to focus on more than just one discipline. It not only allows it, but mandates that companies embrace and adopt all disciplines. A company can focus on one and do fine, but if they want to dominate, they must excel at multiple disciplines.

Customer Intimacy involves the selection of one or a few high-value customer niches, followed by an obsessive effort at getting to know these customers in detail. This requires anticipating the target customer’s needs as well as, if not better than, they themselves do, and sometimes sharing risks with them when the development of new products or services is required. The operating principles of this value discipline include:

• Having a full range of services available to serve customers upon demand – this may involve running what the authors call a hollow company, where a variety of goods or services are available quickly through contract arrangements, rather than the supplier business having everything in stock all the time.

• A corporate philosophy and resulting business practices that encourage deep customer insight and breakthrough thinking about how to materially improve the client’s business are essential.

Two companies used as an example back in 1997 were Airborne Express and Nordstrom. Interestingly, Airborne Express doesn’t exist any longer. While they might have had some level of customer intimacy, they were acquired by DHL Express in their bid to become the third domestic U.S. package shipping company. That bid failed and DHL resorted to becoming a leading small package provider of international package shipping. Nordstrom has an outstanding reputation for customer service and customer experience. They have one of, if not the best return policy in retail. They even offer personal shoppers who will get to know you personally and make recommendations to fit your style. Nordstrom shoppers are disciples and advocates and love the experience.

In thinking about customer intimacy in today’s world, Netflix, Amazon, and Zappos come to mind. Of course, all of them have a very intensive internet presence and learn about the habits and buying preferences of each customer. Netflix tracks the movies and shows that I watch and then makes suggestions on other shows that I might find interesting. They will email me when such shows are available and freshly released. They are catering to my individual tastes and ask me for feedback on shows and movies so, over time, can improve the recommendations they make for me.

Amazon has done a remarkable job of offering nearly any durable good I could want, they help me make up my mind by recording other buyer experience and have an exceptional return policy. Amazon knows more about their consumer’s buying habits and patterns than practically anyone. For consumption products used over and over, one can set up a delivery schedule, and