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industry.
For every service that has deployed technology as a weapon, another has
taken it right through its heart. You can find one conspicuous example every day
in the Wall Street Journal: the New York Stock Exchange.
The personification of the old ways of doing things among gentleman
brokerages up and down Wall Street, the Exchange was blindsided in the 1980s
by computers. Personal computers made it possible for investors to bypass
exchange brokers entirely. Just as significantly, the Exchange failed to adopt
computer systems, and once it added them, failed to integrate them. In a world
that required more speed, the Exchange’s slowness and inefficiency forced many
investors elsewhere.
Because it has such a strong brand, many people think the New York Stock
Exchange is still a giant. If it is, it is a much smaller one.
(Technology alone did not knock the NYSE from its perch. The Exchange
also was hammered by another force that drives service industries: innovations
by outsiders, which have included tax shelters, Keogh plans, IRAs, and mutual
funds. But technology dealt the Exchange several hard blows.) Consider
America’s poor—literally—car rental companies. In 1995, Budget lost over
$100 million. A major villain was Budget’s lack of a yield management system,
which can detect competitors’ rates and raise rates whenever demand for cars
increases. So each time Hertz or Avis dropped prices, Budget wouldn’t learn and
respond for days. Throughout the 1990s, car rental companies have seemed more
interested in bells and whistles— VCRs in minivans and Avis’s ill-fated
experiment with electronic maps on dashboards are two prominent examples—
than in basic time-and labor-saving technology, such as handheld remote
checkout devices and current, basic computers. Not coincidentally, while
America’s airlines and hotels were combining to earn almost $10 billion in 1995,
America’s car rental companies were combining to earn absolutely nothing.
In service industry after industry, technology creates the adapter’s edge. The
adapters become more proficient sooner, work out the bugs, and quickly
recognize the benefits of the technology. The adapters learn and turn that
learning into a great competitive advantage. They race to the head of the curve
while others lag, paying for the mistakes that the adapters already have made and
learned from.
Today, dozens of service industries are sleeping, content with how things
have always been. The sleepers in those industries are so many fish in a barrel
for the smart marketer who recognizes the many ways that technology can be
applied to make customer service in that industry better, faster, cheaper, and
more reliable.
