'Yesterday’s home runs don’t win today’s games.' – Babe Ruth.
Business owners are well aware that how people perceive value has (are) undergoing a significant transformation. Not only are consumers increasingly looking for relational value (Does this align with who I am? Do I trust the entity offering this?), but they are also looking for contextual utility (How does this solve my specific problem, makes me feel, or enhance my life at this moment). In our conversations with business owners, we’ve seen how incredibly hard you work to deliver such consumer value. We also understand and respect that doing your best to provide such value takes physical and mental energy - and the appeal (and sometimes rightfully so) of “take it or leave it.”
However, what if the potential issue isn’t your level of commitment but an imperceptible decrease in relevancy?
Reading the tea leaves
As business advisors, bringing up that your brand and business are potentially losing relevancy is never easy. It also doesn’t help that such conversations are rarely based on hard facts (if they were, it would be very late in turning the boat around) but rather on some early and potential indicators that need to be tracked or understood better. Although such conversations can initially be perceived as personal, the intent and purpose are opposite. By positioning such discussions within the context of the butterfly effect, our first objective is to change the discussions from a perceived “issue” to a “potential trend.”
The butterfly effect, a concept from chaos theory, suggests that small, seemingly insignificant actions or decisions can significantly impact a company’s trajectory. Even small shifts in consumer expectations, market trends, or operational practices can create a chain reaction that either rejuvenates your business or accelerates its decline.
Maintain boundaries - it’s not about doing more.
It’s also not about you as a business owner doing more. Most business owners are already mentally stretched with the demands of owning and running their business and delivering their absolute best in meeting changing and sometimes challenging consumer value expectations. They realistically cannot give more. They also have the same concerns for their teams, and expecting more from them to meet increased consumer value expectations would not be fair. Strengthening, maintaining, or regaining brand and business relevancy does not require changing the “mental boundaries” you have set for yourself and your team.
What to look out for?
Identifying the potential erosion of relevancy is complex and rarely gets picked up through the regular discipline of management reviews and dashboards. However, some early indicators to watch are:
- Declining Repeat Business: Not always easy to spot, a slowly declining purchase trend by loyal customers or increased customer churn over the medium to longer term can indicate that your offerings no longer align with their evolving needs or expectations.
- Reduced Customer Engagement: Depending on your approach and commitment to marketing, lower customer interaction rates across all your marketing channels (e.g., email open rates, social media engagement, website traffic) generally suggest waning interest or relevance in your messaging.
- Negative or Neutral Feedback Trends: Unless customer complaints increase perceptibly, customers who start expressing lukewarm praise or vague dissatisfaction are the most tell-tale signs to look out for. Such comments typically point to a slowly growing issue.
- Stagnant or Declining Revenue: Sales that flatline or seem to be “out-of-trend” with favourable market conditions can signal that your product or service is losing its competitive edge.
- Competitors Gaining Ground: If your competitors are slowly moving onto your turf, is it because they are lifting the game, or are you opening the door for your customers to look at other options?
- Increased Price Sensitivity: With customers becoming increasingly value-conscious, what has been your experience with pricing or price increases? Are customers increasingly questioning the value of your offerings or choosing lower-cost alternatives?
- Sees problems versus opportunities: An increasing sense that customer requests or suggestions and opportunities to lift your value proposition are being met with problems and reasons why it cannot or will be difficult, to get done.
What can you do?
In our conversations, we have yet to meet a business owner (and team) who lacks commitment to delivering value to their customers. Advice focusing on gathering insights, reassessing their value proposition, experimenting with minor changes and engaging customers in two-way dialogue is also not new to them. However, for many, it’s looking at an event in time or an increasingly visible issue - versus an approach and ability to connect seemingly disconnected events. You can spot potential trouble and act proactively before it becomes a problem by critically examining the seven early indicators mentioned above.
