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There are many industries that are at risk of extinction through disruption, and many more that are already extinct. Disruption in a business or industry is often caused by innovation or advances in technology, which means it can no longer operate in the way it once did. The entertainment and travel industries are two common examples. Neither of these industries looks or operates today as it did just five or ten years ago, with many small businesses suffering as the internet gained momentum. In this article we will look at why some industries are more susceptible to disruption than others, and we will look at how you can bulletproof your business.

Who is at risk?

The industries that are most likely to be disrupted are ones that require less skill and expertise – the higher the need for professional expertise, the less risk of disruption. Think about the medical industry; it is unlikely that a web-based medical site is going to replace a “live” doctor any time soon. Most of us will still want to talk to an expert who can accurately diagnose our illness and recommend treatment. We will now look at the some industries that require less skill and expertise and see how they have changed over the last few years.[wlm_ismember]

Video rental: A thriving industry just five or ten years ago, your local video store is fast becoming a thing of the past. Customers have turned to more convenient online options that mean no late fees, no chance the movie is out of stock and the ability to watch what you want at any time and in any location. Companies such as Netflix have seen and taken the opportunity to disrupt the industry.

Taxis: With customers fed up with waiting for taxis, the long lines and inefficient service, the industry was ripe for disruption. Uber has provided an alternative that gives customers the option to choose their price point, to track where their vehicle is and a payment system that is transparent and cashless. These days you are more likely to hear someone say they are going to “Uber it” rather than call a taxi.

Travel: The internet and technology have shifted how we book and organise travel. Gone are the days when only travel agents could ticket your booking, having been trained in the complex airline ticketing systems. These days you are able to book online with the airline direct or with a site like webjet, and receive your ticket and boarding pass on your mobile phone within minutes.

How can you protect your business?

The key to protecting your business, even if it is in an industry that is suffering or is at risk of suffering from disruption, is to offer something extra. You need to offer customers a level of value that they cannot, for example, find online or with an app. There are two key ways that you can do this: offer a higher level of expertise or deliver an exceptional customer experience.

Expertise

In business, you need to be able to show you offer the customer knowledge and insights they do not already have or would have difficulty finding or understanding on their own.

With the amount of information now available on the internet, this is becoming more and more of a challenge. For many industries, the knowledge pyramid used to look something like that below. Businesses were able to show the customer a high level of expertise because they could access information that was not easy for the customer to find.

Today, for most industries, the knowledge pyramid looks more like the following:

 

This means that most businesses will have to work harder to show the customer value through expertise. Let’s take the travel industry as an example. Why would someone still use a travel agent rather than simply book online?

In reality, for simple airline bookings, customers will need a travel agent less and less. Therefore, for a travel agent to remain relevant in the current market, they need to be able to provide expertise and knowledge that the customer is unable to find online. Some options might include:

• Specialise in travel to a particular location or region – Given they have first-hand, reliable and detailed information, the travel agent would be able to offer the customer high-quality service that the customer could not easily access online.

• Become experts in a particular type of travel, for example cruising – Through specialisation, the travel agent can provide expert knowledge and advice so the customer can choose the most appropriate cruising option.

• Target customers who need to organise complex travel arrangements to multiple locations – These types of trips may still prove difficult for customers to book themselves and using a travel agent will give the customer confidence and certainty.

The following are ways that you can build on your expertise in your field or industry:

• Always be alert to new information and findings. Even if this information will become common knowledge over time, if you can be the first person to tell your customers about it you, it will add to your “expert” status.

• Look for areas of specialty or niche market opportunities. Being an expert in one area or field is much easier than trying to be an expert across too broad a range of products or services. You will find an article called “Identifying your niche” in this section of the website that shows how a sporting goods store threatened with extinction was able to re-invent itself by identifying a niche market.

• Keep your qualifications up to date. By keeping up to date and relevant in your industry and field of expertise, you can keep one step ahead of your customers.

• Awards and accreditations are an excellent way to show a high level of expertise. Look for opportunities to enter industry or local business awards as these will enhance your credibility.

• Become an authority by writing articles or a blog that is published across a wide market to promote your knowledge and expertise.

Customer experience

With so many options open to them, the power of the customer is now greater than ever. If you cannot offer a level of service and value that goes beyond the basics, the customer will very likely look elsewhere. Large conglomerates and online business can offer customers efficiency and lower prices, but what they cannot offer is a high level of personalised customer service. This is one area where smaller businesses still have the edge. There are a number of ways that you can do this:

• Building relationships – By their nature, humans are social beings; most of us prefer to deal with a person rather than a machine. You can use this to your advantage by working to build lasting relationships with your customers. Look for as many opportunities as possible to get up close and personal with your customers. A great example is a restaurant where the owner or chef takes the time at the end of service to come out of the kitchen to greet diners and to thank them for their business. This creates a sense of belonging that encourages the customer to return time and time again.

• Use technology wisely – Be wary of creating technology barriers that stop you from being face to face with your customers. A great example is the banking industry. Around 10 years ago, many major banks actively worked to stop their customers from coming into the branches. They did this through offering deals such as no transaction fees for using automatic teller machines and by closing local branches. Over time, however, the banks have realised that this was a mistake, and it only served to reduce customer loyalty. Customers switched to smaller institutions that still offered them the chance to talk to a “real” person about their banking. There are now extensive promotional campaigns by major banks centred around “relationships” and more local branches are offering additional value to their customers through extended opening hours and dedicated customer service officers.

• Value adds – Look for opportunities to give your customers added value as a way to thank them for their loyalty and business. Create a VIP or loyalty program in which you offer special discounts, invitations to events or gifts. A well-run program will allow you to tailor your communication to each individual customer or customer group, and this works to make the customer feel that they are special. For example, a real estate agent should be able to target their communication to potential home buyers depending on where they are looking to purchase, the type of property and the price range.

• Moments of truth – These happen each time a customer interacts with your business and at every moment of truth the customer makes a judgment on your business and how it measures up. Moments of truth may be face-to-face, over the phone or even online. It is essential that you know what the moments of truth are in your business and that you have systems in place to ensure that each one lives up to the customer’s expectation. We have a learning article dedicated to this subject in the “Sales and customer service” section of the website.

Summary

There is no doubt that there are some industries and businesses that are vulnerable to disruption and extinction if they do not work to adapt to new market conditions and forces. One of the easiest ways for you to assess your business’s vulnerability is to conduct a SWOT analysis. This will allow you to examine the strengths and weaknesses of the business, along with any opportunities or threats. We provide you with a template and guidelines in this section of the website, and recommend that you conduct a SWOT every 12 months as part of your business planning process.[/wlm_ismember]

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