What Your Coffee Teaches You About Brand Strength 

There are certain things in life where brand matters more than commoditization.  When you get to the core of any business strategy, the primary goal of any company selling products or services to customers is to find the right customers that appreciate and value the unique set of attributes the brand means in the purchasing process.  Once you’ve been able to do that, the hardest thing to do in all of business is to then keep delivering on that value proposition and lock in customers for the long-term.

For me, there are a few very special products in life that really matter and when your favorite brand isn’t available, you really miss it.  I’m talking about things like razor blades, laundry detergent, and coffee which I will use to tell the story of this blog.

On the rare occasion that I don’t have my Gillette Fusion razor available, I really miss that consistent and beautifully smooth shave.  And on those occasions where I have to do laundry on the road, I really miss the clean feeling of my Tide.  But there is nothing in life worse than really bad, watered-down, tasteless coffee.

In terms of my coffee, I import my primary coffee in yellow cans from the Café Du Monde in New Orleans.  Their Coffee & Hickory blend is spectacular and when I’m home, I brew it every morning and consume several cups of deliciousness before I work out or run.  In the office, I have their Keurig packs and will usually brew a cup to help get me through the afternoon.

It’s when I’m away from home or the office when we have a problem.

I’m probably like most people who will drink the coffee available.  Starbucks makes a nice cup of coffee and I am very satisfied, but hotel coffee and “office coffee” is just terrible.

But then there is the situation where there is no coffee and that’s unacceptable; which happened to me last weekend while facilitating a business simulation workshop.  At the location of the workshop, they have a very nice system that provides a freshly ground cup of coffee in one of those ultra-modern machines. While not my brand, it’s good and gets the job done. Except on this weekend, there was an “out of order sign” on the machine throwing the entire weekend into chaos.

To solve the problem, I brought my personal Nespresso machine down to the simulation workshop location and created my own pods of Café Du Monde thanks to an ingenious reusable pod system. 

As I was sipping my coffee and thinking about the upcoming Business Acumen lesson and workshop, I was reminded of a strategic framework that I have used in the past called “The Delta Model” by Arnoldo Hax.  The Hax model presents a different way of thinking about strategy through the lens of customer connection.  In the model, there are three types of customer connections:

• Best Product –Customers buy the because of the combination of low price and reasonable quality (commoditization).
• Total Customer Solution –Customers buy because the value proposition offers a valuable solution that differs from competitors
• Total System Lock-in – Customers have to buy the solution because it’s critical to them and there are no real competitors

In my previous razor blade discussion, I am happily locked-in to Gillette because my Fusion razor only works with Fusion razor blades.  Another example is Microsoft as most of us are locked-in to all of the application because they run on Microsoft’s operating system.  People who travel out of cities such as Dallas, Charlotte, and Philadelphia are locked-into American Airlines because those are hub airports.  And I am locked-into Café Du Monde coffee because I joined their coffee club and receive an automatic shipment of fresh coffee every three months.

Key Take-Aways and Thoughts

There are numerous strategic frameworks that can fit your thinking and business.  The Delta model offers strategy through the lens of the customers.  Here are 3 key take-aways:

• Your customers pay you, so your best customers should be the center of every strategy and tactic. The most successful customer bond is the system lock-in bond so you need to do everything possible to drive it.
• Customer Bonding is more important that beating the competition. There is no competition unless you can find customers who see, appreciate, and will pay value for your solution.
• Customer lock-in means that two classic strategic sayings are both wrong at the same time; “the customer isn’t always right,” and, “All we need to do is listen to the voice of the customer to develop new products.” With system lock-in, you need to focus on the right customer, and you also need to deeply understand the needs of those customers (not every customer).