Blindly implementing new innovation in your business does not necessarily translate to success.
LEGO is a 56 year old family owned business based in Denmark with a global customer base.
Beginning in 1978, however, the popularity of LEGOs surged, and profits doubled every five years during the 1980s.
In the 1990s sales slowed as competition from Chinese vendors picked up and retailer consolidation and big-box stores drove down margins.
In 2000, the company focused on growth through innovative new products. Movie themed products were only successful in the year the movie was released. Other toys either failed to gain traction or were only popular within small niche markets.
By 2003, the company was virtually out of cash. It lost $300 million that year, and the projected loss for the next year was up to $400 million. "Basically, LEGO had strapped on wings and was flying at 30,000 feet," Robertson noted. But the company had not asked or answered the questions needed to financially sustain such growth -- questions such as, "Where do you want to go?", "Where are you now?" and "How will you get there?" "If you are going to accelerate innovation, you need to know which way you are going," Robertson said.
The company turned around the situation not by walking away from innovative growth strategies but rather by applying sound mgmt principles. They analyzed what worked, what didn’t, turned off unprofitable investments and focused on what did work. "People are competing in red oceans because there is something there [worth going] after." The company sought to compete with LEGO-like toys in three dimensions and on video. It opened retail stores and created LEGO-themed board games and straight-to-DVD films.
By managing its innovative tendencies, over the last three years, LEGO's sales have gone up an average of 24% annually and profits have grown 41%, he added
So what is the innovative new strategy we are all looking at today to increase customer satisfaction and improve support metrics? Social CRM of course. But where is the reality of this new innovative approach to building a customer relationship? What is rocket science and what can you deploy today?
Let’s first look at the promise of social CRM. Explain United Breaks Guitars example of risks involved in ignoring social channels.
And let’s look at a different example also in the airline industry. This example shows the value of engaging in the communication channels your customers are using.
But how real is all this? How mature is social as a communication channel? How mature are the solutions in this new space?
Let’s look at the customer service space. Let’s specifically look at where inbound customer service interactions are coming from. Telephony and email still are the primary channel of interaction. While high profile support events are absolutely happening, call center managers are not seeing the traditional channels trend down in favor of social. Rather social is layering on top, at the very early stages.
Social support is growing and is a key area of focus. Nobody wants to be caught with their pants down like United Airlines.
So what does this mean to you? How do you translate this to your business? Where do you focus first?
