Saturday, August 20, 2005

Creating Your Category

Let's think about air travel. There are 10-15 airline carriers that serve the continental United States. The majority of today's airline companies are on the brink of bankruptcy. They're losing money hand over fist. Two airline companies stand out from the rest and post profits year after year. Why is it that only two airlines make money?

The majority of airlines compete strictly on price. They don't offer the consumer anything other than a cheap fare. There are two sides to a business: employees and customers. An employee's job should be to satisfy the customer. With airlines, the employees hate their job and the customers have no loyalty.

The employees hate their job because management keeps cutting salaries and terminating senior employees. These cuts are necessary because the airline has to keep their fare prices in line with the competition. (Rising fuel costs are another major factor, but only recently has this been the driving issue when it comes to airline profitability.)

The customers have no loyalty because price is the sole decision maker. That same customer will pick another airline next time if the price is right. The customer has no reason to think differently because the airlines don't give him any reasons to think differently.

Except for two small companies called Southwest and Jet Blue. They make traveling fun. They create an experience around air travel. A customer walks out of the plane feeling different because the flight wasn't just another flight. They've created their own category and it's called Customer Service. Customer satisfaction can only occur if the employee buy into the customer service philosophy. Poor employee relations equals poor customer service.

Sometimes, these airlines offer the cheapest fares. Many times, they offer a higher fare. It doesn't matter. The consumer consistently selects these two companies because of their past travel experience.

Air travel is a commodity. There are several ways to separate yourself when you are competing in a commodity business. You can be the cheapest, you can be the biggest, or you can create your own category.

Two Maids & A Mop has created its own category. We're the most customer friendly housecleaning company in the world! We prove it time after time in each of our customer's home. Our employees buy into the philosophy and our customers consistently choose us because they know we want to make them happy.

In business, you're either going forwards or backwards. Create you own category or start walking backwards.

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