Time and again, we have all realised the importance of differentiation and being first to market, and even then this is a lesson that evades us constantly. However, nothing truly replaces the above two wheels of strategy for the long term.
The basic state of all business is commodity, and just like gravity that pulls you down to earth, all businesses sooner or later will be subject to a non-differentiated volume play, devoid of value.
The urge to compete only on pricing in the absence of any real differentiation strategy is the culprit here and normal organisational momentum only amplifies the problem further. This, coupled with an industry/ sector behaving homogenously, results in what is called ‘sector implosion’. The only way to survive this implosion is to ‘distance yourself sufficiently’ from the ‘commoditised norm’ in the market and be the first to do it. This distance from the herd is judged by your customer quickly and the relevance of change and first mover advantage allows exponential build up of loyalty. This is the core of ‘improved business yield’ that then adds on to building shareholder value. Companies that merely then copy your change have to invest more and despite offering discounts and other freebies, can really never catch up on value or that ‘original’ momentum of change.
We are all familiar with the success of iPhone or iPad. The differentiation is relevant to the customer and was first to market. Many players have ‘copied’ the product, but the ‘magic of loyalty’ at the highest premium price is still enjoyed by the ‘original first’. You can find many such examples in various categories. The digital/ mobile environment is filled with instances of relevant differentiation and first to market combinations. These have transformed customer loyalty, improved yield and given the company (and its employees) a ‘unique image of itself’ that propels the company forward.
This is what drove us at Radio One. We wanted to transform ourselves by depicting distance and with a pioneering spirit. The equations governed by a commoditised market and its metrics were no longer important to us. We decided to be different and do it at a speed that gives us a sufficient prime mover advantage.
We started four years ago with moving our Bangalore station out of the commoditised regional space into a ‘disruptive Bollywood space’. In four years, we command the maximum premium with the largest customer base. Today, there is ‘experimental competition’, which do command largish volume but at the lowest price. So, in effect our customers willingly pay a premium for being the first to differentiate. We offer them, for that premium, a pre-established set of leadership norms in content originality, unmatched host equity, guaranteed response and continuous first to market re-invention.
And then a year ago, we were the first to differentiate ‘Mumbai + Delhi’.
The differentiation worked because, first, it was relevant to the listener. Educated listeners were tired of un-differentiated, Bollywood-based ‘immature/ dumb’ content. And we gave them an ‘international, intelligent/ mature and involving’ format. In no time, we moved to about nine million well-profiled listeners in these two cities. Being different and being first to market gave us a ‘huge value’ edge in a commoditised market. So much that we were able to shift yield back on to the on air product versus a market peddling ‘freebie on ground activations’. Today, every client honours us with this premium because they are able to ‘differentiate and innovate’ themselves in such an environment. This is helping them create ‘differentiated and first to market’ communication for their brands. Radio One the medium has undoubtedly become the message. We have and are bringing many new brands on to Radio One Mumbai + Delhi, who till now found undifferentiated radio irrelevant. It’s the combination of the two cities Mumbai + Delhi together that has resulted in the momentum of being first and the advantages thereof.
We followed this up with our ‘Hindi heritage retro’ exclusive formats in Ahmedabad and Kolkata, where we have found similar success. Respect from being the ‘first to differentiate’ has improved our value equation tremendously. Added to this change is continuous innovation that keeps us way ahead of the cycle.
Needless to say, we have had an exponential increase in our operating profits, but then derived from increasing value and not volume. And when you are the first at something, your costs go down as you move along versus companies who copy you by increasing their cost of people and cost of sale.
As the new phase of FM licenses dawn, our decisions of expansion or any relevant diversification will be governed by a simple but confident question – ‘where can we be the first to differentiate and at the lowest cost’ and not by ‘how can we be number two or three by using price as the only edge and throwing money at the market’.
Everyone at Radio One has begun to enjoy being ‘original and valued’. We thank all our listeners and clients for treating us so special! We thank the various brands before us who have been ‘different and first to market’ for showing us the way!
The author is Managing Director and CEO of Radio One
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