Volume 19, Number 9
Watch a 4-minute interview with Niraj Dawar on why companies should shift their focus from products to customers.
“Tilt is a powerful antidote to product-centricity. It is no longer enough to make better products, or add service or to empower the frontline as a means of building competitive advantage.”
That’s the message from Niraj Dawar, whose provocative new book, TILT: Shifting Your Strategy from Products to Customers, (Harvard Business Review Press)discusses why today’s advantage comes from activities of a different sort: a focus on reducing customers’ costs and risks of buying and using your product or service.
“Products are important in the sense that they represent table stakes – you can’t play without achieving competitive parity on products, and you can’t stay in the game without maintaining a certain new product development pace. But to win, you have to achieve superiority in the downstream,” he said.
So what is the “downstream”? It is the set of business activities companies perform in their interactions with the customer: in customer acquisition, satisfaction, and retention. But when it comes to systematic processes for creating new forms of value in the downstream, there is often no R&D lab, no R&D manager, no R&D budget, and most importantly, no R&D process.
In TILT, Dawar offers a guide to companies looking to build sustainable competitive advantage in the downstream, not by selling better products, but by selling products better. Dawar said TILT explores a wide range of examples including several companies with which he has worked, such as BMW and Janssen Pharma, and startups in information and social media.
TILT will be available in bookstores on November 5 from Harvard Business Review Press.
Follow Prof. Niraj Dawar on Twitter @NirajDawar.