Eddie Sung (Author) has released an easily readable book, Customer Moat: Unveiling the Secrets of Business Strategy, that some might call a primer.
Although his discussion does not break new ground (like “Blue Ocean Strategy“), he brings life and enjoyable reading to the basics of profit-building, illustrating the complex interrelationship of customer voice mixed with market factors that lead to profit. Thus, his story builds the analogy of a “moat” serving to isolate customers from competitive choices and alternatives.
His experience derives from a family-owned retail business and his rhetoric is biased by simple decision-making. Readers from more complicated commercial, industrial, and institutional environments may lack an easy conversion to their complex reality of multiple purchasing voices and influences within one customer organization. However, Eddie provides an excellent series of end notes and bibliography to both support his claims, thus making it easy for you to dive deeper based on your own, discrete scenario, and customer moat perspective. Therefore, his primary thesis builds upon eight “customer moat builders” including (alpha sort):
Customer Moat Protection
- Branding
- Cost
- Distribution
- Location
- Networking
- Scale
- Supply
- Value
(Part One)
The early premise provides a clear compendium of his MBA background and research. His explanation that customer moats impact market share, profit margin, and price is basic, although nicely illustrated. This section provides more value in growing and retaining a customer base than it does in providing insight into acquiring new customers and markets. He stresses “. . . how businesses hold on to their customers.” through operations, scale, positioning, and control. He concedes later “ . . . it is better to foster repeat customers. . . keeping existing ones is often more cost-effective.” and “The main purpose of the Brand moat builder is not to get new customers per se but to keep existing customers returning.”
(Part Two)
His detailed discussion about the eight customer moat builders remains vibrant and research-supported. While some of his examples are classic business tales (e.g., Ohno’s Five-Whys at Toyota), his writing style keeps the reader engaged as the pages turn quickly. However, he again primarily illustrates his claims with simple retail examples including 7-Eleven, Amazon, Costco, Krispy Kreme, McDonald’s, Southwest Airlines, Starbucks, Toyota (automobiles), Walgreens, and Wal-Mart among others.
His discussion on Network Effect (Scale) provides some of the freshest material and does not pre-supposes that he has the answers, he does offer up some excellent questions:
- “How do we get customers to enhance the experiences of other customers?” and
- “What types of information do our customers possess that we can use to improve their future experience?”
In the end, you should buy this book. Although I’ve never met him, I’m convinced that Eddie is a “good guy” and he certainly researched well, worked hard, and wrote clearly to make this book on customer moats available. Treat it somewhat as an updated “In Search of Excellence” as the takeaways are clear and valid, even fun. Be forewarned however that clear actionable takeaways may be lacking for readers who are not directly in the retail sector.
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Terrence Metz, MBA, CSM, CSPF, PSP01, HTTO1, is the Managing Director of MG RUSH Facilitation Leadership, Training, and Meeting Design, an acknowledged leader in structured facilitation training, and author of “Meetings That Get Results – A Facilitator’s Guide to Building Better Meetings.” His FAST Facilitation Best Practices blog features nearly 300 articles on facilitation skills and tools aimed at helping others lead meetings that produce clear and actionable results. His clients include Agilists, Scrum teams, program and project managers, senior officers, and the business analyst community among numerous private and public companies and global corporations. As an undergraduate of Northwestern University (Evanston, IL) and an MBA graduate from NWU’s Kellogg School of Management, his professional experience has focused on process improvement and product development. He continually aspires to make it easier for others to succeed.
