The Greatest Threat

In a world that doesn't just change quickly, but continuously, the greatest threat to your marketplace viability may very well be irrelevance. The graveyard of failed businesses is filled with companies that went from magnetic to irrelevant. It can be a gradual slide into irrelevance in which the company sees customers and revenue slipping away little by little, or it can be a sudden realization one day that it's just over—you simply stopped mattering.

Witness Radio Shack's long, slow, painful slide from magnetic to irrelevant.

It was kind of like the old story of putting a frog in a pan of water that slowly, degree by degree, became hot enough to kill him. The frog never jumped out because it was so gradual. Don't be the frog. Take action with your business long before the water's too hot!

Wild for CB Radios

It's likely that very few people reading this are old enough to remember CB radios, but trust me, it was a wildly popular fad in the late 1960s. Radio Shack not only jumped on that train but was the locomotive for it. Tens of thousands of people flocked to Radio Shack stores to get their CB radio, and the company was not only relevant, but vitally relevant to this huge consumer trend.

When CB radios began to lose popularity, Radio Shack was ahead of the curve and totally relevant in the next great consumer electronics craze, the personal computer. Again, not many remember the days of the TRS-80, the first mass-produced personal computer. Radio Shack made it and made millions from selling it.

The computer hardware business became unprofitable, Radio Shack got out of it, and they were right there for the next big thing—cell phones. In fact, Radio Shack became the go-to place for cell phones. But the mobile carriers moved away from using Radio Shack and opened their own stores. And that was the end of that.

The rise of the cell phone also made a lot of the products sold by Radio Shack irrelevant. GPS devices, voice recorders, camcorders, and answering machines were all replaced by that one cell phone in your pocket. From an inventory standpoint, Radio Shack was becoming a confused mess with no identity.

Next up in consumer electronics was e-commerce. You could now buy products online from Target, Walmart, Best Buy, and many others right from their websites. The Radio Shack website gave consumers a store locator. Radio Shack did finally begin to offer a ship-to-store program, in which consumers could order products online and pick them up at the nearest store. But with Amazon and everyone else shipping straight to the consumer's home and doing it with great speed, The Shack (as the company had lamely begun to call itself) was simply irrelevant.

Radio Shack was unable to take advantage of what was seemingly its best shot at relevance, which was serving the emerging “maker” community. These are electronics enthusiasts who make their own devices. It could have been an opportunity, but somehow it just slipped away.

Next stop for Radio Shack: bankruptcy.

Dogs are Loyal. Customers Aren't.

There was a great TV commercial with two young guys on an elevator, each of them totally focused on their smartphones, obviously engrossed by their choice of social media. One of them, without looking up, asks the other, “Hey man, you on Woo Woo?” The other responds, without looking up, “Yeah, man. Everybody's on Woo Woo.” Later the two are on the elevator again. One asks, “You still on Woo Woo?” The other says, “No, man. My mom's on Woo Woo.”

The days of customers staying loyal to companies for long periods of time are numbered. The amount of trust consumers put in brands is steadily decreasing, and a typical consumer will now switch brands without hesitation if they get a better offer or if that brand becomes irrelevant to the consumer.

There's only one way to defy the declining loyalty of customers. You have to start over every day and re-earn it. One mistake that many businesses are making is to see the defection of their customers as a marketing challenge. Usually it's not. It's a value challenge. Customers leave because they don't see the value anymore.

There are any number of reasons that you might lose customers or see a slowdown in your ability to attract new customers. In addition to irrelevance, some of them are:

• They didn't know. Now they do.
  1. Your product, service, and price is being instantly compared to your competitor's. Anyone with a smartphone, and that's everyone, can check the marketplace to compare anything with everything. Car buyers now often know more about the cars they buy than the car salespeople do.
• Your competition is everyone.
  1. You may think that because you provide the best service in your industry, it makes you bulletproof against customer defections. Think again. Your service and everything you do is compared to best-in-class companies across the spectrum.
  2. If my customers get more personal treatment from their dry cleaners, they are going to wonder why I'm not willing to give them the same thing.
• You are disconnected internally.
  1. See the chapter You're Fired! for my phone company example. I was bounced from department to department, and the lack of information that these employees had about my situation was staggering. One department didn't know what the other had said or was doing. A lack of communication, working in “silos,” or a failure of your people to understand one another's jobs can result in your customers thinking that you are either incompetent or, worse, that you don't care.

Think Again

If you are thinking to yourself, “These stories about companies like Radio Shack are interesting, but they don't have anything to do with me,” think again. I would say that as a business writer, consultant, and speaker, I'm about as different a business entity from Radio Shack, Subway, and as anyone or anything could be.

But I do have one thing in common with Radio Shack, you, and every other business: the fundamental need to stay relevant. For all of us, relevance is the most important survival factor in business. The moment you begin to matter less to your customers, that's the moment that you begin going out of business.

Keep your magnet for attracting business strong by staying vitally relevant to your customers.