Panera has done some amazing things over the past couple of years…but are they enough to deliver a knockout blow to their competition? Only Panera knows for sure but I am hopeful they are going to deliver a big knockout punch instead of miss a huge opportunity.
Based on an article in the Wall Street Journal, “What Panera Had to Change to Make Its Menu ‘Clean’” the CEO, Ron Shaich, describes how they have completely changed most of their food ingredients to be much healthier and without chemicals…kudos to him and Panera. This is a great start and something every company needs to be doing today and into the future. By doing this, Panera is definitely taking the lead and jumping out in front of many others.
But there’s an inherent problem with this strategy…have you recognized it yet?
With all the good work Panera and Ron Shaich have done to change the ingredients of their food, it’s still just food…a commodity. You can get lots of great food everywhere today and it because it is so readily available, it has become a commodity. And as great as their efforts are, there is nothing keeping any of their competitors from doing the same thing…or even more. That’s the problem with the “commodity game”, there is always someone waiting in the wings to “one-up” you and offer something just a little bit better than what you offer. It is a loser’s game.
Unfortunately, this is what most organizations miss today when they are thinking about how to differentiate themselves from their competition. They focus on their products and services and continually try to improve them more and more to be better than their competition. They are continually adding new features, new variations, and new versions. This is playing directly into the hand of commoditization. Anyone can improve their product to meet or beat your products and services at any time. This “leap frog” game of one being ahead of the other and then someone else leaping past them is the definition of being a commodity. And playing in this game is not only frustrating but very expensive over time.
While having an awesome product or service is a great thing, it has almost become the norm today for just about any product or service. There are just too many competitors and too many companies looking to jump in and seize the lead. It simply isn’t enough today to set you apart and differentiate your company…at least not for very long. It takes more to be the true differentiated leader today because someone is always waiting in the wings to “one up” whatever you offer.
Think about so many “disruptors” that entered the market in the last few years that were never on the radar screen of a particular industry and now they have a commanding position. Companies like Uber, Tesla, Airbnb, and many others. They didn’t exist but they saw an opportunity and so they created a more efficient model and entered these industries. Where did they come from? No one was even watching them and they showed up and took billions out of these industries. Don’t think it can happen to your industry…think again…no industry is immune when commodities are involved.
This is the situation Panera is sitting in right now. They are sitting on top of the commodity market with the best ingredients (today) in the market …they lead the commodity space of food in their segment. Congrats to them for getting to this enviable spot! But is it enough?
I believe they are well positioned to deliver the “Knockout Punch” if they recognize and seize the opportunity…but will they recognize it or miss it?
Here’s the Knockout Punch…adding an incredibly remarkable CUSTOMER EXPERIENCE to their existing leadership position with their products!!
That’s it…that’s the killer blow they could deliver to their competition. If they added a WOW, blow your mind customer experience to their stores to complement their existing great products with great ingredients, who could touch them…no one. This would put a huge gap between them and any competitor in their space…and for a long time. This is what would take them out of the “commodity game” and put them into the “Customer Obsession” game.
If they invested in designing a customer experience that was so much better than their competitors they would dominate their industry…period!
Why? Because even if someone came in and offered similar great products their customers are very unlikely to defect to the competition if they absolutely love the way they are being treated. It is proven that customers are unlikely to leave if they are getting an incredible experience. In fact, they are also willing to pay more for this experience as well.
So in the case of Panera, they are sitting on an incredible opportunity…capitalizing on their great work with their ingredients and products by offering an awesome customer experience to complement their leadership in the commodity space. Giving their customers and experience they rave about and food made from better ingredients is the “one-two knockout punch” they need to really set them apart from their competitors.
Will they recognize this opportunity or miss it? Only the CEO, Ron Shaich knows the answer to this question. If he isn’t thinking this way, I hope he reads my blog post and changes his mind. I really enjoy Panera and have spent many hours in their stores. I’m cheering for them…I want them to win. I want them to seize the opportunity sitting in front of them and create something that will truly dominate in their industry. I want to see this success story unfold…
I hope you will be watching Panera over the coming months and years to see if they recognize the opportunity and can take advantage of it. It should be an interesting story to watch and see how it unfolds. Maybe I should drop a comment card to Ron…
But this post isn’t just about Panera…IT’S ABOUT YOU! Panera is a great example of a company that may be just like yours. You may be leading in the commodity space of products…kudos to you. But are you leading in the Customer Obsession space and delivering a Customer Experience that eclipses your competition? Most companies aren’t…in fact some of the research shows less than 15% of the companies are doing this today…that is a big green field available.
So the question is what are you doing as the leader of your company to seize this type of opportunity and truly differentiate your company and put massive distance between you and your competitors? What is in your Vision and Strategy that would allow you to take advantage of this opportunity? Where is Customer Obsession on your list of priorities for your company in the coming year? These are the questions I would challenge every leader to think about and discuss with their leadership team. The opportunity is there for most companies in most industries…the gauntlet is on the ground.
If you want to know more or discuss what Customer Obsession is really all about, invest some time and a cup of coffee and I will be happy to share more about what this looks like for organizations. It might just open your eyes to the biggest opportunity your company has ever seen. What do you have to lose…staying as the commodity leader or becoming the unquestioned leader in your industry. I hope you choose the latter…it’s a wonderful place to live.
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