We would flatter ourselves to believe that even occasional readers know we believe fervently in basing our work on data and research, not just hunch and intuition.

So we warmly welcomed it when PwC’s often useful “strategy + business” published a little bit ago an article with the title of this column addressing what firms that find themselves “caught in the undifferentiated middle” to can do to connect with their customers.  Think that a “connection” with your clients is a loosy-goosy nice to have?  According to a large scale survey they did (15,000 respondents in a dozen countries), people would pay a price premium of 16% for a superior experience as a client.

Yes, this study covered retail consumers, not B2B, but consider (a) people are all human, and we prefer doing business with people we like in a pleasant interaction; (b) all successful marketing has rational and emotional elements; and (c) industries covered included healthcare and financial services, so PwC is not just talking about visiting the (increasingly forlorn) mall or shopping online for paper towels or lawn mowers.  Back to the data.

What does a “superior” experience mean?

The top-ranked attributes in terms of importance were:

  • Efficiency (damn, did they have to rank that absolutely #1?, you may be exclaiming)
  • Convenience
  • Interacting with people who are “knowledgeable” (yay!) but also (in a tie) “friendly” (hmm….)
  • And dealing with people who are “human” and who “personalize it.”

How do you know what your firm might need to do if you fear being lumped in the “undifferentiated middle?”

Start by engaging in a cold, calculating, hyper-realistic analysis of where you are.  PwC identifies four handy possibilities:

  • Differentiators have both a differentiated brand strategy and effective operations.
  • Visionaries have a differentiated strategy but fall short on operations.
  • Doers have effective operations but are in need of a cultivated strategy.
  • Hopefuls need both a differentiated strategy and effective operations.

Rephrasing this a bit to suit Law Land, a “differentiated [brand] strategy” means your firm is a destination for something in particular; when a client is need of that particular type of service or practice specialty, you should by rights be on the short list.  Not being differentiated means you-know-what.

Similarly, “effective operations” means your firm is superb at (a) producing work efficiently, (b) (project-) managing it consistently, predictably, and transparently; (c) pricing it fairly and without surprises; all while (d) guaranteeing top-caliber quality.

Suppose you’ve gone through this exercise and accurately identified where your firm fits on this conceptual map.  Now what?

Now this, basically:

Is this beginning to look like real work?

The good news is it should be  worth it.  PwC says it analyzed  20 widely known consumer brands and found the “differentiators” had by far the highest five-year CAGR of revenue at 10.9%.  The hopefuls brought up the rear at 1.7%.

Is a differentiated brand more important than slick operations, or vice versa?

At least in the PwC dataset, strong brands did better than weak brands even if their operational capability was less than excellent.

Intuitively to us at Adam Smith, Esq., this makes sense.  One of the Ten Commandments we have (well, we don’t actually have Ten Commandments here) is, “Strategy always comes first.”  If you don’t know what your distinctive brand components are, the most finely tuned operating machine in your industry will only help you to tread water longer.

Here are some examples:

Ashley Stewart

A plus-sized women’s apparel company founded in Brooklyn in 1991 to focus on the urban African-American community was, by 2013, floundering and facing bankruptcy.  It was then that Board member James Rhee (a private equity investor with a Harvard Law degree and, not insignificantly, a Korean-American) believed that there was still a strong core of community connection with its customers and took over as CEO.  He capitalized on the community connection with a message of, I kid you not, “kindness:”

“We will never be the biggest, richest, fastest, most prestigious company,” Rhee said. “But one day, if people say that this company did more for its underlying customer and employee base than most any company, I think that we’re going to have a tremendous amount of success.”

Two years later, the brand was earning all-time record operating profits, organic sales growth was >25%/year, and it was one of the largest, most profitable, and fastest-growing plus-size fashion brands.  As Rhee put it writing in Harvard Business Review,

We are a mission-driven business — we believe in advocating for a woman who could sometimes use more advocacy. Everything we do is to serve her. Period. And she has led the way forward for us. She has driven us to become a global leader in social media. She is driving us to explore enhancements to our nascent mobile capabilities.  And yet until and unless she cares, we are not concerned in the least about winning a “Store of the Future” award. Indeed, some of our most innovative forms of consumer engagement are laughably old-fashioned, like “sip and shop” events and in-store model searches. We are investing heavily in customer service and employee training, because we believe that’s what she wants. And we will continue to work hard for her and show her the respect she deserves.

A message that is both rational (“we have the sizes  you need and we’re conveniently in your neighborhood”) and emotional (“kindness,” “consumer engagement,” “we’re advocating for you”).

Warby Parker

For every pair of glasses purchased, Warby Parker donates a pair, adding up to more than 5-million pairs across 50 countries so far.

Yes, it demonstrates operational excellence in spades (I can testify, I’m [disclosure] a customer), but that would be merely checking-the-box in the impatient online retail ocean without the appeal to customers’ social values through its “buy a pair, donate a pair” mission.  As our PwC friends write (emphasis theirs), “realize that value involves more than just price.”

Rational:  Highly competitive prices, wide selection, hassle-free online shopping, free shipping and returns.  Emotional: We’re challenging the bad old over-priced eyeglass monopoly and we’re donating eyeglasses one-for-one to people who really need them.

Finally, repeat: They express this in a number of cumulative ways.

  • “Keep evolving.”
  • “Complacency is not an option in today’s environment.”
  • “Brands that already have a differentiated strategy must stay vigilant.”
  • “Embrace disruption.”
  • “Foster a test-and-learn culture [and] encourage teams to fail fast, learn, and adapt quickly.”

We can distill this even further: (1) Know what you’re superb at and make sure your clients know it too; (2) be kind and empathetic–be “nice to work with;” and (3) deliver reliable quality predictably priced.



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