| I had a feeling you might cite some of these examples :) Admittedly the Lyft example was unknown to me--I'll have to dig in, sounds interesting. Specifically to airlines, I'd direct you to some interesting info on Southwest[1]. While TBH the case study doesn't really prove to me the causation of success by being customer-centric, it does show that they can compete in that industry with that approach and be successful. For the cable industry I'd argue that Sonic.net has carved our a nice business for themselves in part because of their amazing service. That doesn't really disprove your statement that it relegates a business to a niche of the market and makes it hard to expand outside the niche, but I again think back to the question of correlation vs. causation. Comcast, TWC, etc. were all well entrenched before Sonic.net even existed. So it is hard to say how much of a factor that played in their limited ability to compete vs. the fact that they focus on customer service. Respectfully, what I still remain unconvinced of with your examples is what exactly Comcast and others like them are leaving on the table by not having awesome customer support experiences. You don't necessarily need to break the bank to have one, but you do need strong direction and culture, and that comes from the top down. I go back to the notion of customer acquisition costing potentially 5x as much vs. retention costs (all hypothetical averages of course). If an industry has razor-thin margins and cost-focused customers, wouldn't you think it would make them a lot of money to maximize the LTV of said customers? [1] http://digitalstrategies.tuck.dartmouth.edu/cds-uploads/case... |
As you mentioned, it's always hard to separate out cause and effect but I'd argue Southwest's unique fleet and labor arrangements gave it a temporary structural advantage. Now that those advantages are disappearing, it seems to be reverting towards the mean (http://www.wsj.com/articles/SB100014240527023039497045794596...).