Business Growth, Customers, Improved Results, Productivity, Sales

Why the business middle ground is no man’s land



In my previous blog I talked about how Tesco’s financial woes are largely caused by its failure to innovate, referencing how its rivals have taken market share by using customer experience as differentiation.  It is an example worth exploring because it illustrates how market places are diverging, and in doing so, are making the middle ground a dangerous place to be.

Business Competition

Businesses once sought balance: they provided goods and services at a price point that was sustainable, and the service experience simply needed to be satisfactory to retain customers.  Now competition in all sectors is greater, customer expectations are higher and speed of communication means that any failures are reported globally via social media in minutes.  

This crowded and fickle market makes it very difficult to stand out from the competition and Tesco has lost market share because it is fighting a battle on two fronts.  At one extreme are the budget supermarkets Aldi and Lidl, which in perfecting the low-cost, no-frills model, have made Tesco’s and the other more established supermarket’s price matching efforts seem convoluted and cumbersome.  At the other end of the scale we have Waitrose and M&S, which have upped the luxury game to capture the (relatively) low volume/high margin shoppers and turned grocery buying into a personal, aspirational experience. 

Faced with these extremes, what helps Tesco stand out? If shoppers value cost and experience as the greatest factor defining where they shop, what can Tesco offer differently? There’s no easy answer, but it illustrates neatly how businesses that were strong in recent times need to be mindful of how the middle ground is no longer safe, and doesn’t resonate or excite people.

What service is appropriate to your business?  I can help you build a customer service strategy that helps you win over new business. If you’d like to chat over a coffee and brainstorm some ways to help you build a customer service strategy, then get in touch : email, or call me on 01962 670200.

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