Last week American Airlines stopped accepting cash to pay for on board beverages and meals. Good decision. Now, instead of scurrying for change, flight attendants can focus on their core task: keeping passengers safe and comfortable.

Photo Credits: The Consumerist

Many companies complicate their operations by trying to please everybody. Others, engage in activities that are not aligned with their goals and objectives, just because the other guys are doing them. The misguided belief that the customer (any customer) is always right often results in a muddled and unfocused brand, and operational inefficiencies.

Some companies, though, are not afraid of making tough choices, like deciding which customers they want to serve and what activities, processes and products they will focus on. Those who do create strong brands and efficient businesses.

For example, Internet banks are able to offer better rates to people who don’t mind banking online instead of a branch office.

Writers and musicians can increase their revenue by selling their work only on their website, a minor inconvenience that their true fans won’t mind.

An Italian restaurant in my neighborhood serves a killer lasagna only the first Wednesday of the month. They don’t take reservations and the average waiting time is about an hour.

As a company, the trick to “have it your way” and still build a thriving business is to focus on your best customers (in the case of Internet banks, the relatively young and web savvy), find out what is important to them (higher interest rates), and what is not important to them (branch offices).

Some companies have even been able to create entirely new market niches just by observing an existing industry, challenging the validity of some of the standard practices and assumptions, and incorporating elements that nobody else is focusing on.

If you would like to read real case studies of companies that became successful following this approach, I recommend reading Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, by W. Chan Kim and Renée Mauborgne.

This entry was posted on Saturday, June 6th, 2009 at 3:04 pm and is filed under Branding Basics. You can follow any comments to this entry through the RSS 2.0 feed. You can leave a comment, or trackback from your own site.