The problem with Rex
Rashid Kotwal
Sales, Strategy & Leadership Consultant for Professional Services Firms | Driving Revenue Growth and Profitability | Building High-Performing Teams | Preparing Businesses for Successful Exits | Generating PERSONAL wealth
How much do you truly understand about your clients? Why they value and dare I say it, love you? And when was the last time you validated what you think is important really is?
Barbara and I are flying down to Melbourne for a funeral next week. Thought, “Let’s take Rex”. But they didn’t have the timings we wanted – so booked Virgin instead.
A somewhat fortunate decision for us – given Rex’s parlous state. And while my heart goes out to the 600 or so employees who lost their jobs – I had to wonder if all this wasn’t Rex’s own making.
Rex is a salutary lesson in a) not understanding your market and b) not sticking to your knitting. Picking a niche (regional air travel) and becoming the best at it. Hang on, they were the best. There was almost no competition for most of their routes – and they were a lifeline to regional communities.
Maybe in a moment of hubris they decided to take on the big boys. Enter an extremely competitive market – flying capital intercity routes.
Competing with Qantas and Virgin, the former with extremely deep pockets.
But what value did they add? They were competing in a “red ocean”. Low airfares, a race to the bottom. Losing $1,000,000 a week! Ouch!
Compare this to Southwest Airlines in the US who created a completely new “Blue Ocean” by creating a new point to point model of travel.
For any of you who travel the US, as far as I know every other major airline still uses the hub and spoke model – were you must travel to say Atlanta or Chicago then then catch a connecting flight.
<Interesting fact: Southwest modelled Greyhound Buses – just did it with air travel. A great example of taking something that works in one sphere with your audience and adapting it.>
Southwest now does more air miles than any other carrier in the US.
So if you’re thinking about changing markets, who’s your competition and if they’re big players what makes you think they’ll not fight to keep market share?
Often the grass is greener where you water it.
Bringing this back to our own businesses, ponder these:
If you’re stumped, give me a hoy.
So my question for you is, “Are you talking to your clients and getting the lowdown on why the buy (and continue doing so)”?
If not, what’s stopping you? And if you’d like my help doing so, our Client Interview Service could remove any excuses.
Rashid.
P.S. Whenever you’re ready … These are ways I can help you lead a better business and live a better life:
1) Access a range of free resources which help you attract, engage and convert new clients. Click Here.
2) Get rapid advice - Clarity and Focus Sessions help you look at situations from different angles, probing so you get clarity and then conviction as to the best course of action. Click Here.
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Rashid Kotwal & Barbara Sauter Revealed Resources Building better businesses Mob: +61 414 913334
Linkedin: https://au.linkedin.com/in/rashidkotwal
Become Future Fit
7 个月A perfect example for us to learn from!
Strategy sounding board, Auracle World, Non-Executive Director, ACCCN, Formerly Non-Executive Director, Allevia Limited, Co-Founder, BrandRead.i.y?, Adjunct Fellow, Western Sydney University, Finalist
7 个月No airline can create a hub out of hubris. Right you are, Rashid. Home work with customers = 'class' work against competition. ??
4 x author on securing #nonprofits, #SMEs, Associations and Charities from cyber events using enhance #cybersecurity concepts. Start now, do the self assessment and get your baseline!
7 个月There was no need for Rex to try to take on the bigger players. they had a niche market that no one was servicing
?????????? IP and Commercial Lawyer I Australian, Asia & Pacific Director I CDU University Law Lecturer I | I Speaker I Author ??
7 个月Many lessons to be learned from the business of airlines. Thank you for your insights Rashid Kotwal