So how can you not only recognise when an Uber moment is coming, but use that information to innovate?
I’ve spent nearly forty years founding and growing businesses in a very traditional industry (hydraulic hoses), and one of the things I’ve realised is that innovation is essential to survival.
I founded Pirtek Fluid Systems with a partner in 1980, in the very early days of mobile service in the hydraulic hose market. Over the next 10 years, we grew the business, launching a franchise model in 1989 that we took to the UK, Germany, France, Holland, Spain, South Africa, and the USA.
After selling out of that company in 2000 I moved into franchising, until I was approached by one of Pirtek’s former competitors, to assess their business, refresh their marketing profile, and develop their traditional distribution model into a franchise model.
As I worked with this business, I realised that it was time for an Uber moment in our industry.
The industry has traditionally been divided into three very distinct channels – an irrigation product channel, an industrial hose product channel and a hydraulic channel. The problem was that separating these channels created a subpar customer experience, and made the products and services more expensive than they needed to be.
This prompted me to found Maximus Industrial Group, a one-stop-shop concept for the hose industry that combined the opportunities of those three channels into one business to reduce the cost of supplies, save the customer time and make procurement easier, improving the overall experience.
Through this experience, I’ve learnt that there are four keys to help you recognise and leverage the Uber moments in your own industry.
1. Change your perspective (from disruption to opportunity)
Most small businesses see the Ubers of the world as disruptive – destroying traditional fields and putting people out of jobs. The problem is that it’s very hard to see opportunities and innovate from that perspective.
The truth is that businesses like Uber are creating a lot of opportunities for complementary businesses, like designated drivers who can take your car home if you end up having too much to drink when you go out.
They also create opportunities to reduce costs or scale existing businesses. If we at Maximus needed to deliver a product to a client, we have the choice between investing in a company vehicle and a company courier, or using a service like Uber, which achieves the same result with a far lower outlay on our part. We then benefit from instant delivery from somebody who presents our company in a very positive light – someone almost appears to be working for us.
The problem is that if you’re too focused on the disruption these companies are causing, you never see the opportunities you can leverage in your own business.
2. Be aware of the changes happening around you
Once you’ve changed your mindset, the next step is to become aware of the changes that are happening around you – both in your industry, but also in terms of how technology is affecting other industries.
The reason Uber moments take people by surprise is because companies in traditional markets aren’t paying attention to the trends around technology, customer satisfaction and demand, and considering how those might affect their own businesses.
This is then compounded by the fact that change is happening more quickly than ever before.
Take the hydraulic hose industry – it’s a traditional field that had been servicing its customers in a traditional manner for the past 30 years. Businesses in our industry have been servicing three distinct channels – the irrigation product channel, an industrial hose product channel and the hydraulic channel. Maximus Industrial is the first business to offer a one-stop-shop concept for the hose industry.
Consider that 30-year evolution, then compare it to how quickly industries are changing today – particularly in the technology space, what was cutting edge five years ago probably isn’t today.
The key is looking at your own industry from an outsider’s perspective to see where a change might be obvious. More often than not today, it’s not in the product quality or the product itself, but the customer experience.
3. Focus on customer experience
30 years ago, companies were able to differentiate themselves through the quality of their product, or how well their product satisfied the needs of their market. Today, good products that are fit for purpose are standard. Instead, the point of difference today is around the customer experience.
In our industry, for instance, we realised that mobile service wasn’t the best experience for our customers. The people in the industry spent a lot of time travelling from one company to another, which meant that the cost of services to the end customer increased dramatically. At the same time, our customers were time poor, so we couldn’t expect them to travel between three different suppliers to solve a single problem.
This created a situation where it might have been more practical for somebody to send a mobile service unit to a service function in the field to make a new hydraulic hose for a customer, but the cost of that service outweighed the value of the service.
It became obvious that the customer, in a large number of the cases, would have preferred to come into a highly efficient service centre to have a hose replaced, rather than wait for a high-cost field service unit to attend the job.
We realised that if we could create a trade centre that accommodated about 80% of the customer demand across three product categories, we would also be able to help the customer save time, which is where the value would be in our service.
4. Collaborate for a competitive edge
One of the reasons a lot of businesses feel threatened by the Ubers, Airbnbs and Amazons of the world is that they see the world from a ‘us or them’ perspective. ‘Our customers will choose us or them,’ or ‘there isn’t enough room for both of us.’
However, much like viewing these companies through the lens of the opportunities they develop rather than the disruption they create, it’s also possible to shift your perspective from one of ‘us or them’ to one of collaboration.
By engaging with companies like Uber, Upwork and Airtasker it’s possible to use external or outside resources to better satisfy customer demand, while making better use of your own resources.
In our industry, when a customer has needed an urgent service, companies would have engaged their own capital to establish mobile service units to meet that demand, all of which require staff, equipment and management. Today, industry disrupters are actually creating a pool of external resources that companies can draw on on an as-needs basis. By using these resources, you can develop a personal relationship with the customer, even if it’s at arm’s length from your own business.
Whether your business is an industry disruptor, or you can sense the changes to come, there are plenty of ways your business can leverage these opportunities to better service your customers and remain relevant in the years to come.
About the author
Wally Davey is a serial entrepreneur, being the co-founder of Pirtek, one of the first industrial franchising brands to gain international market penetration within 10 years, and Maximus Industrial Group, a one-stop-shop for the industrial, hydraulic and irrigation markets.
Wally’s passion is the success of Australian niche businesses. He is a strong advocate for Australian presence in global franchising, a creative and innovative personality.