Lessons to be learned from the Blockbuster demise
Tom Dougherty, CEO – Stealing Share
23 September 2010
3 Lessons from Blockbuster
- Never define your brand by a technology or delivery system. No one has seen, let alone watched, a “video” in to years or more. When you define your brand by what it is you are selling, you open yourselves to the risk of a change in technology that renders your brand obsolete. Look to Apple as an example of a brand that has defined itself in terms of a brand promise rather than a technology. That’s is why the company is no longer called Apple Computer but rather just Apple, Inc.
- Evolve your brand constantly to reflect and anticipate changes. All economies trend towards efficiencies (that is why they are called economies). This means that all markets will inevitably evolve towards the most efficient delivery system of the served benefit. If you can receive a benefit, without the inconvenience of having to go somewhere to purchase it, the destination aspect of your brand business will become a hindrance rather than an asset. Netflix is an example of this principal with its Instant Viewing availability. However, Netflix is in violation of the first principal if the delivery system moves from Internet to some other delivery system. After all, “Net” is part of their name.
- “Local” is a value only in a market with inefficiency. Having stores on every corner is not a value. It is a cost. It only speaks to the brands inability to attract loyalty beyond what is “on the correct side of the road.” Markets trend once again to efficiencies and the value of local (as in your local bank) becomes way overstated. Anyone who forms an attachment to a brand believes the attachment is local and personal. Fashion has understood this for years. When someone buys a designer purse, they have developed a personal bond that transcends distance.
Blockbuster Goes away
Brand evolution too often is shelved because the price of diligence and change is not insignificant. It requires every CEO and CMO to constantly reevaluate the brand’s proposition and adjust it to reflect customer changes. It is the textbook example of the epoch battle between what the company wants to have transpire and what the customer desires. At the end of the day, all that matters is the customer’s beliefs. The brand’s proposition needs to reflect it.
If we do not heed the lessons of Blockbuster and invest in the brand’s evolutionary cycle — recognizing that the investment may not be a short-term profit center but a long-term strategy — there will be a cost to sticking our head in a hole like an ostrich. Just ask Blockbuster. Unless it asks for help from us, whatever it does will be too little to late.
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