Comments

Mr. Neiss;

I believe you have just hit on the essence of management; as leaders, we consistently balance the essential performance of the bottom line and the value benefits of customer satisfaction.

If a customer is "anyone who influences the success of the business", the same balance exists with our employees, vendors and partners.

Companies that can achieve effective balance by understanding what's important to the customer and delivering it in a simple way, at a reasonable cost,will produce long term results.

And cheer up, it's Friday!

Posted by Roberto at July 25, 2008 7:45 AM

Thanks Roberto...I am cheery today! Off to the course for a little client golf. It is a beautiful day here in Michigan and they are three of my favorite clients...can't get much better.

Posted by Mike Neiss at July 25, 2008 8:37 AM

No, Mike, it's not just you being cranky. Where our oldest son works, they just sent out a company memo telling them that they finally made a profit in May and June—due primarily to all the layoffs. And I've noticed this pattern ever since, years ago, my employer shared his greatest nugget of business wisdom: "You know, if you just work faster, you can get more done in the same amount of time."

Yes, cutting costs is easier than being smart. In my classes I lean pretty hard on the idea that this is the time for a small business to ramp up services. While everyone else is cutting back, you'll stand out like a rose in the desert.

Ah, golf; I remember that. I had many a beautiful walk through the woods in east Texas ruined by it.

Posted by Joel D Canfield at July 25, 2008 8:50 AM

What a missed opportunity. These businesses could have reached out to their customers and asked: we find that our expenses are increasing, and we'd like to ask how we might cut costs. Here are our options, or maybe you can suggest some others that we haven't considered. In this partnering way, even if some of these measures were unavoidable, at least it signals that they care.

Posted by Brett Rogers at July 25, 2008 8:54 AM

You guys are so right- in a tightening economy people are looking for those little luxury moments to take their minds off their anxiety. The scratchy towels, the holes in the wine list, the lack of service- all these just remind us that things are getting tough and really, is that what we want to pay good money for?

On the other hand, as Joel points out, the business that makes the customer, especially the struggling customer, feel worthy of careful attention will thrive now and have an already established reputation of excellence when the good times return.

Posted by Lois Gory at July 25, 2008 9:01 AM

Roberto - Thanks for remembering the definition of a customer I published here on tompeters.com a while back.

This gets to the essence of Mike's point: What kind of changes in the behaviors of others happen as a result of blind cost cutting? Mike and I both had interesting hotel insights this week: http://yastrow.com/2008/you-touch-it-you-bought-it.html

Also, Mike, you might be better off not drinking the first drop of coffee in your hotel room. Check out this video:

http://clipmarks.com/clipmark/2595A97E-EB74-4455-B91E-6C518A7509FE/

Posted by Steve Yastrow at July 25, 2008 9:12 AM

And how about allegedly top drawer hotels charging extra for Internet access?

Posted by John Lassey at July 25, 2008 10:03 AM

Steve - points well made, especially re the hotel drinking glasses (I'm already copying the link to everyone I know) but I suggest hotels don't start off by mistrusting their guests. It's the way WE customers behave that sets the mini-bar and clothes hanger agenda. We influence the behaviour of the business, and if sometimes we get treated as if we want to walk out with the towels, maybe that's because hundreds of guests before us have done just that. I agree it's not pleasant to be lumped together with all the usual suspects. But this "we" relationship works both ways, and somehow I believe that the customer end of it goes beyond simply handing over the cash.

Posted by Rob at July 25, 2008 10:25 AM

‘Too bad’ or ‘nothing we can do about that’ are dreadful expressions. There is ALWAYS something that can be done for a customer.

I agree with you Mike that it feels like many places no longer go the extra mile for the customer and so customers WILL go an extra mile (or two) to somewhere where it isn’t ‘too bad’ or a ‘nothing we can do about that’ culture – this is just a no brainer!

Having just started playing golf again regularly my advice would be just to enjoy the golf … there is just no greater way to relax …. 18 holes ….Followed of course by a nice Chilean Red …. As long as the shop has not run out of course Mike …. Keep smiling.

Posted by Trevor Gay at July 25, 2008 10:50 AM

Cost cutting measures are fodder for the competition. Heard the Southwest Airlines commercials anyone? "We don't charge to check your first two bags." Only works when the others start to be cheapskates.

I can't tell you how many hotels I have gone to where the amenities (admittedly small things) are lacking. Who wants to fight for one of the three irons available in the morning before a presentation? Or when your shampoo or toothpaste was confiscated as possible terrorist weapons prior to your flight and then you get to your hotel room at $350/night you get cheap shampoo and no one can seem to find any toothpaste? (real story, btw!) That hotel is not on my list anymore for stays in San Francisco.

When I was working as a chef (admittedly long ago now) we had a saying: "If the food is late it tastes like sh*t". Of course, that is a back-house view - in the front, with the wait staff, there was a different observation: Your demeanor rubs off on your customer. If you are impatient and rushed for time, so will your customer be.

Seems to me that the things that create brand loyalty have to do with the customers feeling that the company cares about them. Many times it is precisely the small things that will do it. And the disappearance of them means they cease to be distinguished from the pack. Worse than that, maybe it is me, but there is a sense of betrayal.

Posted by Martin Koning-Bastiaan at July 25, 2008 11:41 AM

I don't want to get this discussion side-tracked. However, along John's comment: why do the higher end hotels charge for internet and the "lower" level hotels (Hampton Inns et al) give it to you for free? As far as I can tell, it's not faster or more secure. Any thoughts on this?

Also, in the case of the linens. How would customers feel if the note said, "Like you, we're watching expenses and also looking to save our planet. So, we give you the option of..." This wouldn't work in the case of a luxury hotel where you're trying to escape. But it might work in a budget travel hotel.

Posted by Todd Reed at July 25, 2008 11:46 AM

Todd - I like your rewording of the linens note. Makes it palatable at very least. Perhaps higher end hotels don't see free wi-fi as a selling point (if you are going to be considering the Four Seasons, free internet is a blip and not significant). Now, they might be wrong... seems like they should just make their rates 10 bucks more and include it.

Posted by Martin Koning-Bastiaan at July 25, 2008 1:03 PM

"why do the higher end hotels charge for internet and the "lower" level hotels (Hampton Inns et al) give it to you for free?"...because they're assuming that a high % of the people staying there are on expense accounts and thus are price-insensitive.

Posted by david foster at July 25, 2008 4:01 PM

Of course you are not just being cranky. This is not "in search of excellence" but completely OK with "take it or leave it". Like you, I thought I was just having an off week when I:

1) Arrived at my health club to find that my personal trainer of 6 years had substituted his far less experienced protege for the week. I take my training seriously and everyone got an earful on this one.

2) Said health club starting charging for water, towels and chalk. This is above and beyond their monthly payment and training fees.

3) My long time nail technician (15 years of regular manicures) announced that her pricing will be increasing, she will be moving to a location in a not so great neighborhood but it will "be OK, there will be lights added to the parking lot soon".

4) Same story on the local restaurant that I have frequented for 15 years with personal and business relationships...smaller portions, higher prices, extra for water, extra for water with no ice, no condiments on the table, non-English speaking customer facing employees.

5) And of course the airlines. After flying American religiously for 35 years, a local representative delivered the message to me on Wednesday that my flight was cancelled and I should just go out to Love and get on a Southwest flight; which I did.

I was thinking that I should just suck it up, a sign of the times. Maybe not.

Posted by Kate at July 25, 2008 4:40 PM

One instance that really stood out for me when the day that Northwest decided to stop serving beverages to economy passengers on flights under 3 hours.

They didn't mention it in a courtesy email, nor in the airport... no, they waited until the plane was flying and made the poor flight attendants break the news.

I remember feeling very cheated, and thought that they could at least have mentioned it beforehand.

Too many companies don't seem to care how their customers view their decisions.

Posted by Katie Konrath at July 25, 2008 5:36 PM

Thanks all for the comments...I feel better! Steve, I already quit eating store bought tomatoes and jalapenos...guess using hotel glasses is next. 36 holes today followed by dinner with my wife...what a country!

Posted by Mike Neiss at July 25, 2008 9:02 PM

and Steve Yastrow...all the above in South Haven...a summer place we share in common....

Posted by Mike Neiss at July 25, 2008 9:04 PM

Dear Mike, your comments as a customer are justified. But I am not sure whether that would hold true as a consultant. If one were to explore why the businesses in all the cases, except the third, had to resort to these cost cutting measures, possibly some genuine explanations would emerge. Having said that, I am surprised that even upmarket customers in US are feeling the impact of the deteriorating economy, which is forcing businesses across the board to cut costs.

Posted by S Goel at July 25, 2008 11:55 PM

How can we preserve profits and improve (or at least maintain) customer-service as costs rise? Does TP have suggestions? It seems we need to think outside the box of "no toothpaste and cheap soap".

Posted by Mike L. at July 26, 2008 1:13 AM

"At what point is the brand compromised?"

When senior management a) fails to recognise the values for which the brand is appreciated; and b) issues an instruction that cost saving is more important than maintaining those values. You could also argue it happens when they hire people who don't practice the values. And you could argue it happens when they don't go out into the field and live the values by example.

The sad thing about so many of the incidents quoted above is the remote way in which they were done. A little bit of thought and communication might have smoothed over quite a few of them.

Posted by Mark JF at July 26, 2008 1:52 AM

"At what point is the brand compromised?"

At the precise point that you the consumer become aware of something, however small, which makes you question whether your previous assumptions (negative or positive) are still valid. It's never about what the company thinks its brand is, it's what you think that matters.

On chargeables, as well as hotels, I would also include business-class airport lounges that charge for wi-fi in the list of cheese-paring villains. Frankly, I would rather have free wi-fi than free alcohol, given a choice.

Posted by Rob at July 26, 2008 3:33 AM

Customers must be the second priority for any company, being number one the employees. Most likely in those examples the cust cutting started with the employees. Therefore not suprising reaction by the employees. "they don't care about me, why should I care about the company's clients?"

Cust cutting is simply an example of poor and boring management, lacking vision and powerful, funy and winning strategy.

Posted by Liberto Pereda at July 26, 2008 3:46 AM

I agree with your points Mike - but think this is the just a teensy outcropping of the major problems with capitalism. What you are saying is that, in order to save some money, the organisations you mention are making changes that are unacceptable to their customers.

The realisation that really gets me going though is that organisations save money at the expense of people who are not their customers. Their suppliers, we good people in the street who ultimately have to bear the cost of environmental pollution, the long-term health of our planet, our children and grand-children to whom we will give a degraded planet. Those people. We people.

And we are all on the down-stream of things that corporations are refusing to take responsibility for. Pollution is a clear example of how this works. Almost a prototype for all the other things.

This has to change. And it will change. It is just a question of how bad it has to get before we people demand action from corporations. And, we people have the power - we give our power to corporations when we don't protest. Ultimately corporations will have to take full responsibility for their actions.

So, in the examples you quote, yes the brand is compromised. But the brand that is really being compromised long-term is capitalism.

How can capitalism change or be changed to start being a force for good in the world instead of a fertile source of long-term problems?

Posted by Mike Bennett at July 26, 2008 7:49 AM

A fine, cranky post, Mike. Bravo!

There are two forms of the cost cutting that really get to me. The first is when they try to trick me. Suddenly, there are four sticks of gum in a pack. Do they think I can't count?

One local supermarket switched to cheaper plastic bags. There's a bonus is that one. When the bag breaks and the jar of salsa shatters, customers come it to buy another one.

The other kind that bothers me is the cost cutting in areas that won't show up for a while. Deferred maintenance is one. Cuts in the training budget are another. Both look like they work until you get down the road a ways.

Posted by Wally Bock at July 26, 2008 2:57 PM

I'm starting to notice how often I can put up with cost cutting & customer neglect as long I am able to reach a human being with a brain wave at the other end of the phone whom I can express my complaint to. Often I get compensated on the spot with free stuff - which is great - but I'm often satisfied when someone can just listen to my tirade without getting defensive and simply say, "I'm really sorry this has happened." Training CS reps in basic listening skills is a cost that shouldn't be cut, methinks. BTW, Mike, the answer to your question - "Am I just feeling a little grouchy today? Or have you noticed this as well?" - might be yes and yes. :-)

Posted by John O'Leary at July 26, 2008 8:58 PM

Well John....they just ticked me off! Much better now...:)

Posted by Mike Neiss at July 26, 2008 9:23 PM

"At what point is the brand compromised?"

When the organization doesn't take the time to identify the programs that the customer deems to be both highly important and done highly effectively (Thrills) by the organization.

If the org doesn't identify these things, then they cut based on dollar signs alone, not on what they actually are providing their customers (i.e. the upscale golf course wasn't just providing a place to play golf).

As Headmaster of a private school, I am urging my staff to increase the service we provide to our parents,especially in the "Thrills" areas. If we don't do this, our parents become much more price sensitive and may start looking around...

Posted by Dan Tubbs at July 26, 2008 10:23 PM

In response to Dan's point, I would suggest that a large (perhaps the largest) part of The Brand is in the accumulated small detail, rather than the "highly important". For brand providers, these details may seem tiny and insignificant in comparison to the "big" product qualities, but to the brand consumer they may mean the difference between enthusiasm and indifference. And their removal signifies, justly or unjustly, either inconstancy or thoughtlessness, both betrayals of the brand consumer's loyalty. It's the death of brand by a thousand cuts.

Posted by Rob at July 27, 2008 12:47 AM

Rob-That's a great point! It reminds me of what my mother used to often say to us, "it's the little foxes that destroy the vines." Her advice to us always was to take care of the small things.

Posted by Judith Ellis at July 27, 2008 4:02 AM

Although I agree with much of the above. It's all seems a little theory based - I have one question - so what do you do when the money runs out? You have to make savings somewhere.

Also some changes to brands/services are deliberate. I know one IT company that I deal with has recently axed some of it's higher end services - they were simply not sustainable. Most companies have customers they would rather not deal with. Many have customers who are not profitable. Perhaps some companies actually don't want you in their brand? The "brand compromised" maybe a sign of you being incompatible with them not the other way round.

Posted by PaulH at July 27, 2008 5:52 AM

PaulH's comment seems to relate to target markets. But I can't imagine brands or designs being produced or marketed as incompatible. It seems to me that this works in reverse; the market determines compatability and not the brand or design. Tommy Hilfiger, Gucci, and Louis Vutton must understand this well--the producers and artists of rap too. The brand and design may have been developed with a particular target market in mind, but its incompatability or compatability seems to be determined by the market en masse.

Posted by Judith Ellis at July 27, 2008 6:14 AM

PaulH...I have always agreed with a frugal approach to business. At UPS we didn't have carpet in our offices because it was more expensive to clean than vinyl tile...But, it seems to me that business folk ought to consider the potential productivity improvements and corresponding cost savings they could get if they engaged their employees. It does not take business genius to run numbers on a spreadsheet, then arbitrarily order cost cuts..I will bet on the companies that look longer term and try to increase value per resource rather than mainly focus on cost reduction. Aside from the obvious design errors, I would trace the beginning of GM's trouble days to the reign of Mr. Lopez and his tyrannical cost cutting. And by the way, some of the examples mentioned are doing a very good job of filtering me out as a customer. I do disagree that companies are consciously trying to weed out customers. Thanks for the comments....Mike

Posted by Mike Neiss at July 27, 2008 6:30 AM

PaulH - "so what do you do when the money runs out?"
Here is an instance where focus groups of customers and employees could help prioritize cost-cutting. For me, a big, obvious cost-cut is easier to take than those nasty little surprises.

Posted by Mike L. at July 27, 2008 6:59 AM

I do, however, support PaulH's position that the company has the right to alter its services as it deems fit for financial stability. Chrysler has just announced that it will no longer lease cars, as it is no longer profitable for them. In this sense, I understand the position taken.

Posted by Judith Ellis at July 27, 2008 7:30 AM

Agreed Judith, but Chrysler is an exception as it is tottering on bankruptcy and actively seeking a suitor to buy them. And if you have read any reviews on their products the last few years, most have pointed out that their over reliance on plastic in their cabins has taken them right out of the high end market. It was pretty obvious to the automotive press that bringing in Nardelli was a signal that they were courting new ownership.

Posted by Mike Neiss at July 27, 2008 11:53 AM

"...so what do you do when the money runs out?"

It's the point (well, actually about 3 months after) at which you have to say, "Sorry, but we got it wrong. We figured we could make money from this product / service but we were wrong. If you like what we're doing, then I'm afraid we need to raise the price by x% to maintain the same level. We're going to do that and we hope you understand our commercial dilemma and that you appreciate this level of product / service demands a certain premium. However, we can only sustain this new model for a couple of months else we fall into the commodity market. If you'd be happy with the cost cutting we'll have to do, then we'd be glad to see you again as a customer. But if you appreciate what we're trying to do and you'll live with the x% rise, we're going to sign you up as a charter member of our loyalty scheme with a y% discount. We hope you support us, whichever way it goes."

Posted by Mark JF at July 27, 2008 4:18 PM

As usual Mike I love John O’Leary’s take on this. Lets be honest most of us customers are not stupid – honest we’re not. Guess what? – we customers are even intelligent enough to work out when the going is tough for companies. Just tell us it as it really is instead of cutbacks ‘under the counter’ that you don’t tell us about – so instead we just sort of ‘find out.’ Customer care is about trusting customers, treating customers as intelligent adults and hey presto we can deal with bad news … we are really quite grown up actually. What will lose companies more customers is to patronise us or worse still con us through ‘stealthy’ under-hand unannounced cuts - its this 'small' stuff that really matters.

Posted by Trevor Gay at July 27, 2008 5:15 PM

Yes, Mike. My executive friends at Chrysler see Nardelli as preparing it for perhaps a possible break up and sell. Didn't the 300 do pretty well? My brother, by the way, as VP for Chase, does business in your part of the State and loves it. He too is often on the golf course in South Haven. What a lovely place!

Posted by Judith Ellis at July 27, 2008 5:43 PM

This is a funny read to me. How do you irritate the upper crust? Take away their pampering and claim "cost-cutting." That'll do it.
I didn't miss the central point. I just got home from nine days in a Chicago hotel. I don't think the carpet in my room even saw a vacuum but the management there sure lives in one.

Posted by nextgenradio at July 27, 2008 8:12 PM

Following stats were taken from I think Paco Underhill's "Why we buy" (forgive me if I've got the source wrong - I've kept the stats on hand but not the originator)

Of all dis-satisfied customers, 4% are moved to complain, the other 96% generally go quietly away and 91% never come back. Out of that 91%:
* 9% leave because of the competition i.e. price and perceived value
* 14% are dis-satisfied with the product
* 68% leave because they feel they weren't valued

[reflect on those stats - only 1 in 10 leave because of price and 7 in 10 leave because they don't feel valued]

A typically dis-satisfied customer tells 8-10 people. One in five tells 20 people of their dis-satisfaction. In all, 5 dis-satisfied customers will tell 60 people of the experience.

7/10 complaining customers will do business again if you resolve the complaint in their favour.

It costs 6 times as much to win a new customer as it does to keep an existing one.

Posted by Peter at July 27, 2008 11:22 PM

Interesting that esp about the health club, as recently experienced similar sloppyness from this 'service' industry. Not that scratchy towels are a minor problem, but I could live with that IF the product I needed a towel for after was working consistenly!

A key offer of a health club; and largely THE deterimining factor in my joining: the Sauna. Sure they break now and again, or the benches break, come loose etc and need replacing. But why do national chains insist on some coporate service level agreement that ONLY 1 carpenter/bench supplier can EVER fix the benches in the suana? So whilst there is a guy with a saw 2 mins walk away from the club, who could fix it that afternoon (and you could keep my membership money in the local economy by paying a local lad), I have to wait anything upwards of 3 weeks for some outfit to travel 200 miles from corporateville or wherever to fix the bench!

I'm sure someone will argue about head office drive for economies of scale, approved suppliers only etc, but this discussion is about impact on customers - and this impacts hugely (negatively).

So, I'm cranky too, best get to sauna and relax..........

Posted by Adrian at July 28, 2008 5:47 AM

We are just a few that read these posts and really care about brand and customer loyality. These kinds of stories just plain tick us off.

The reality is, corporate America is gambling on the large percent of Americans who really don't care that the towels are not as soft or you take this away or that. They may grumble, but at the end of the day they will accept and move on. I see the stats about 7 out of 10 don't feel valued. I think that is more of how they are treated by a person versus if the towels are not as soft.

Look how the government has figured out how to take just a little bit more out of your pocket over the years. Have you stopped working because of it? It takes basically 6 months for you to pay your share of taxes. Yet the majority of Americans just let it go on, don't say informed of who they are voting in to change it. It is a constant errosion at our paychecks.

It seems, in my humble opinion, that corporate America looks at the majority of the people the same way. A little here and a little there. Keep cutting the costs, let them grumble, but at the end of the day the majority will just keep coming back. "Thank you sir, may I have another!" is what they expect us to say.

I really start to miss the mom and pop stores that big corporate america has killed off. In my little town in Indiana, I would love to see bit Walmart go away and "John's Grocery" come back. But unfortunately the mom and pops don't have the buying power they need to compete.

Unfortunately the train has left the station and the minority of us who care about brand will make are decisions and only hope that others will start to take notice.

Posted by George at July 28, 2008 8:10 AM

George...I think you are on to something...It seems to me people used to be much more inclined to fight back..I remember the consumer boycotts of brands and television networks that advertised them in the 60's. They worked. Maybe we get what we deserve, eh? And for the life of me, I can't figure where all the cost savings are going? Certainly not to wages. Shareholders? Execs? My standard line when I am asked to cut the cost of my product is that I will cut the same amount they are cutting the cost of their product. So far, no cuts..:)

Posted by Mike Neiss at July 28, 2008 9:45 AM

These businesses do not owe us anything. They are free to survive, thrive, or go out of business on their own. If you do not like the product, service, amenities, attitude, etc. just vote with your dollars. Go find somewhere you like. For every hotel, health club, etc. that is trying to cut costs via cutting services and amenities there is another that understands how to get and keep customers. We can not expect every business we deal with to be superb. As an old coworker of mine used to say, "if everyone were as cool as us, no one would know how cool WE were..."

Posted by mike at July 28, 2008 2:19 PM

The cost cutting where I work is looking more like a butchered back room abortion, and is hurting client service very much. I believe the Neutron Jack GE management mentality has hurt American business and is the cause of S&P 500's stagnant growth over the last decade.

Posted by Stoic at July 28, 2008 3:31 PM

You are soooo right... everything does matter.

I've been working on a project called Leading With Kindness and one of the people we interviewed for the project is Pitney Bowes CEO Marin Murray.

Mr. Murray talks about how leadership's values affect the way the company performs and how satisfied it's employees are.

You can see his video here:
http://www.thirteen.org/leadingwithkindness/video/managements-values

Posted by Kevin at July 28, 2008 4:22 PM

There's a book I love—which Susan wishes had never been written, Roger Rosenblatt's delightful (I think) Rules for Aging. S's irritation stems from my penchant for referring to it again and again and then again—she's got a point, actually. - Toms words on...
http://www.tompeters.com/entries.php?rss=1&note=http://www.tompeters.com/blogs/main/010451.php

Page 1...Rule No1: It does'nt matter!

Posted by Craig Jones at July 28, 2008 9:25 PM

There's a book Tom 'loves' - Roger Rosenblatt's Rules for Aging.

Page 1...Rule 1: It does'nt matter!

Posted by Craig Jones at July 28, 2008 9:31 PM

Brilliant post! As they say “The market decides everything” – So, if more & more customers start experiencing a deterioration in the perceived value of benefits (products / services) being offered, the lesser the customers these businesses would have (hopefully). So, lets leave it for the market to decide – remember, we live in a “free-market” world…?

Posted by K.Sriram at July 29, 2008 1:00 AM

Layoffs and other cost-cutting measures are a (very) short term, quick fix. If companies continue to sacrifice quality workmanship, quality custoemr service and quality follow through...then the losses and the missing customers will only start piling up again.

While everyone is laying off and cutting costs, why not be contrarian and step UP the service you offer? Why not work HARDER and offer MORE? This way, in a world where the customer has almost unlimited choices...you always become the First choice. You look like a winner in a field of losers and mediocre-at-best competitors.

Posted by Defmall at July 30, 2008 2:54 PM

Now you know more about those brands--that they don't give a sh*t. Hoping they'll change is like hoping a friend who is mean to you will change. Doesn't mean they will. Maybe you put too much stock in them.

Once customers are more responsive to price increases than they are to service cuts, you shouldn't see a problem. This change is well underway and well documented.

Premium is being redefined.

Places that make service/staffing/quality cuts--think Brooks Brothers or Eddie Bauer over the last 30 years--are spending their brand capital. Are slowly selling out.

There are other brands that are building true value. Some are working harder/going crazier and others are raising prices and delivering more.

In the long run the only thing that really works is the latter, which is why there's so much talk about premium brands these days. It's no longer enough to fight for technological advantages, outsource and hammer suppliers--that's the price of admission these days.

Growth has to come from somewhere--and it costs money. Standing still is an impossibility, though many consumers enjoy the consistency. It is the hobgoblin of little minds after all.

Brands are either getting better or failing--there's no stasis. Established brands can easily become more profitable while eroding their true value--it's done all the time. But it shouldn't be confused with actual growth.

Brands that embrace fixed or cut rate pricing--that compete on price--have already started the decline.

Posted by Eben at July 30, 2008 3:22 PM