Imagine if we as a society had an overwhelming social and emotional attachment to the taxi Industry. Rather than stories of bad drivers and dodgy mechanicals we sang out gushing praise of John or Mary our taxi driver for the evening and the fabulous travel experience we just had. We wouldn’t ever think of using an alternative service because frankly, we just could not imagine a better offering. Our society and politicians fighting tooth and nail to protect the poor rights of our hard working taxi drivers, just trying to make a living for their family. In such a world, would a little upstart ride sharing service (arguably operating illegally) ever have taken hold?
Unfortunately for the taxi industry, the reality is and has been very different. Despite protests, marketing campaigns, and some aggressive protectionism, the social movement against them has been swift. Laws were changed, exceptions made, and Uber became well… Uber. Believe it or not, the same hasn’t necessarily been true for Uber in every market. The idea didn’t change, but clearly the dynamics for each market can be very different.
Make no mistake, you could have the most innovative business idea in the world, but if your consumers aren’t ready to make the switch then you may not get very far. Conversely the more reasons a consumer has to stay with your brand, the less likely they are to switch. Don’t give them a reason to switch and they won’t. Simple right?
In the case of the taxi industry, consumers weren’t just ready to switch, they were hungry for it. Any viable offering could have potentially disrupted that market. Uber just happened to be the “bull in the china shop” of regulation, willing to smash and crash their way through it.
If you take a closer look at the Uber’s and Google’s of the world, there’s a pattern though that you could apply to just about every transformative or market changing business:
- efficient Processes: Waste is cut, bottlenecks eliminated. Their internal processes and customer workflows are more efficient and highly scalable. There is little or no limitations on supply chains or barrier to entry, very little human interaction in the middle of each transaction, and increasingly less overall friction for the consumer.
- social Alignment: They have a greater social and emotional alignment with their consumers than their competitors. This comes from some combination of complete disdain for the incumbent solutions, or some emotional attachment to the incoming brand. A little bit of both goes a long way.
- human Connectivity: There is an emphasis on bringing people together and creating a connection. Creating the ability to communicate and collaborate effortlessly with others at a time and medium that makes sense for them.
- enabling Technology: The technology for the most part already existed, or perhaps was a relatively minor evolution. People trusted the technology. It wasn’t new and scary to the masses, just put together elegantly and with a little thought and care.
Efficient Process, social Alignment, human Connectivity, enabling Technology, or PACT for short. Essentially, if you can tick all those boxes, or at least score pretty highly on them, then you might just be on to a winner. if you’re in a market or business that generally scores pretty low across the board, then you could be in a spot of trouble.
You only have to look at some of the markets most tipped for disruption; Real Estate, Finance, and Energy for example. They are generally inefficient businesses with high human overhead or constrained supply. They typically have a low social standing and a lack of personal connection. And are ripe for complete displacement by technology, nominally automation and AI.
Technology alone is not enough. Despite the prevalence of online retail, people still like to go physically shopping. They like the experience of shopping with friends, being waited on, trying on clothes they can’t afford, or simply to touch and feel the product they’re about to buy. Some brands also carry a strong emotional attachment; You certainly don’t buy a pair of shoes from Louis Vuitton say, solely because of their functional purpose. It’s these people factors have been key in keeping bricks and mortar retailers, and likely many other industries, alive!
In all the talk of disruption, it is sometimes forgotten that business is still about a connection between people. Whether you’re looking to displace a market, or just grow your brand, you need to capture as many reasons as possible for your consumers to switch. Reasons that extend beyond the pure functional and technical value of your product. Reasons the PACT framework sets out to provide.
The million dollar question is, How does your business measure up?