The economics of abundance in the moving industry

Recently Mike Masnick, the founder of TechDirt, was commissioned by UPS to develop several short videos designed to explain the difference between innovation and invention using a simple white board. The contributions are being produced for the shipping giant's PopurlsBrown's 'Seizing Opportunities' YouTube channel.

TechDirt is very popular group blogging community that focuses on how changes in government policy, technology and legal issues can affect a company's ability to innovate and grow.

While some think these 'subsidized' commercial presentations are too overly simplistic in their style and content, the messages they've delivered so far have stimulated a number of very interesting comments and discussions among the site's 850,000+ loyal subscribers.

In The Economics of Abundance, for instance, Masnick discusses how traditional economics is about effective resource allocation in the presence of scarcity.

If you're part of the moving or relocation industry, you know the dilemma he's trying to address. There's too many trucks/technicians/clerks/counselors/salespeople/laborers/drivers/dispatchers/warehouses/accountants/assistants/managers and chiefs and not enough customers/clients/accounts/writeoffs/contracts/leads/SEO/loopholes/opportunities or innovative new SEM plans or ideas to support the current business
model.

The message is more relevant to what's happening with recent industry trends when he noted that in a economy of true abundance, new business models and markets evolve when scarcities are created. But more about that later.

In the latest TechDirt addition, Fostering A Culture Of Innovation, Masnick talks about how innovation requires the ability to change and adapt rapidly!

Iterating... improving...innovating! Simple message delivered in a simple way ... in an immensely popular medium. Too bad many long established, reputable service providers in the moving industry still don't get it.

Turning the Corner

Throughout the winter, most of the well-recognized brand names in the moving industry have tightened their belts yet another notch. They've laid off more staff, updated their collateral material to reflect the subdued changes in their company's scaled down business model, revised their sales and marketing plans, hung new clothes on all the pages of their website(s), and now sit anxiously waiting for the arrival of the traditional moving season...hoping it lasts longer and delivers more peas to the plate than the last few years. Unfortunately, it appears those still at their post are busy cranking out more of the same ol', same ol'!

Ever since Congress deregulated household goods carriers in the '80s, the industry has been paddling furiously to stay afloat in the sea of change that's segmented and then slowly decimated the full-service moving and storage business.

First the uniqueness our products and services were challenged on Capitol Hill, then in the marketplace. Self storage facilities became enormously popular as Americans outgrew their homes and the cost of maintaining a conventional multipurpose warehouse. About the same time, general freight motor carriers began offering a variety of long distance DIY moving services using conventional spring ride trailers to combat the competition in the LTL and TL trucking industry.

Traditional movers were blindsided in the '90s when an entrepreneurial real estate developer in Florida introduced a unique on-site delivery system that placed a huge portable container in the driveway of their budget-conscious customers. Several years later many acted unconcerned when AFB, a mid-sized freight carrier, introduced a smaller mobile/portable container option to compete against PODS, GoMinis, and
SAMs. 

Today everyone wants to capitalize on the immense popularity of the DIY moving and storage fad. Unfortunately, they're finding it costs a bundle to get into the game.

But not everywhere.

New business models using old resources

NorthStar Moving Corporation started as a traditional local moving company. Visit any of the company's dozen or more websites, however, and you'll quickly realize that the Los Angeles – based company is anything but typical. In fact, according, to their advertisements, they provide “eco-luxury” moving services. Go ahead. Google it.

Not only have co-founders Ram Katalan and Laura McHolm carved out their own their own unique 'moving' service niche, they've been “iterating, improving, and innovating” everything they do since they first opened for business in 1994.

Take their 100,000 square foot warehouse in LA, for example. It's a conventional high-overheard behemoth filled with old, used wooden pallets. You know, the kind held
together with antiquated rusty nails and metal climps. But you wouldn't know it if you visited their websites at http://www.northstarstorage.com/ or http://www.northstarmobilestorage.com/ . Not only has Northstar figured out how to put a new spin on an old twist, they appears to have successfully bridged the gap between
innovation and invention.

Getting social … with discretion

How does a mover use 'social media' to build their business and engage their customers? Again, Northstar appears to have mastered the art. Not only is the company's management active in the popular Facebook, Twitter and YouTube community channels but they've actively embraced the 'rating and review' process of a half dozen hot new venues that capitalize on user-generated content to appeal to not only their affluent Hollywood clientele but also younger, more mobile and culturally diverse members of the moving public.

Instead of thumping their own chests, they let their customers do it for them … using video testimonials!  Real people sharing honest appreciation. Scroll through the long list of 'atta boy' vids and anyone can find 'someone like me' who's enthusiastically sharing their moving experiences with a Northstar crew.

I recently stumbled upon this 30+ minute 'infomercial' by accident. In it, Laura McHolm, Northstar's CEO and CMO discusses how her company created their niche by listening to customer needs and then building a strong internal culture and corporate structure to fulfill those individual expectations using many of the old tools of the traditional moving industry. Apparently they've figured out how to successfully use the “same ol', same ol'” to grow their business in this weak economy.

As Massick reiterates in his Seizing Opportunities series, new business models and markets evolve when scarcities are created!

Join me at RELORoundtable – a gathering place where interested visitors can participate in a mutually supportive but commercially neutral learning environment that
deals with the trials and tribulations of movin’.