Brand trust is harder to earn in today’s economy? The pressure to cut costs makes delivering day after day on promised benefits more challenging. Social media creates messages that listeners deem more reliable than your own. And retaining meaningful and hard-to-copy differentiation has become more challenging in our copycat global economy. Silicon leader Dow Corning is one company that has managed to build authentic brand trust by clearly communicating its value promise, aligning people, adapting its business models, and letting its culture evolve to support its two brands, Dow Corning® and XIAMETER®. Dow Corning created the XIAMETER brand in 2002 to preserve market share as specialty silicon products commoditized, a savvy example of business model innovation that I wrote about in late 2011. The fully automated (from ordering to fulfillment) business model enables the brand to maintain profitability at the lower price points…
Disrupt your business model before you’re disrupted
A well-known case study by Harvard Business Review documents how Dow Corning elected to disrupt its own silicon business rather than allow competitors to steal market share by offering lower price points. The story is worth retelling because Dow Corning’s business model innovation keeps evolving to meet the needs of price-driven customer segments. As the information age took full hold in the 1990s and markets globalized, Dow Corning recognized that its high-end offering of services surrounding its product left the growing number of price-driven customers shopping elsewhere. “We recognized that a number of product lines were becoming commodity-like, and customers were no longer willing to pay a premium for them,” comments 20-year Dow Corning veteran Stacy Coughlin, an architect of the 2001/2 business model innovation project that created a price-driven brand, XIAMETER. Now the head of Global Marketing Communications for this brand, Coughlin…