Hint: You do not sell product, whether it’s baked beans or loans or funky nautical gifts. If that’s the way you think, you’ll always be stuck in the center of the pack, loping along, but never breaking out to win big!
Let me explain by asking a question. What’s the difference between the various banks in your community? Or the grocery stores? Or even the fast-food joints? Too often, darn little, just enough to motivate customers to keep moving their business … playing each business off each other. (When it comes to restaurants, my friends and I know just where to find the “buck-a-burger” night on Monday, “Taco Tuesday,” and “Fabulous two-fer Friday” specials.” But that doesn’t buy our loyalty for the rest of the week.)
So, why lock yourself into an exhausting, low-profit, head-to-head, toe-to-toe competition over weekly specials and tiny price differences? (“Mortgage rates at our bank are .25% lower!!!” or “Peas this week only, save 7 cents!”)? Big woof! They do not work. Let me repeat that: They do NOT work. Sure, they keep you from falling behind the herd, but they sure do NOT put you in the lead. (And remember, “Unless you’re the lead sled dog, the view never changes.”) That’s kind of like having air conditioning. Big deal. You have to. But it doesn’t bring in business.)
Instead, let me take the example of grocery stores and show you how the lead dogs do it, starting with Fairway Foods in New York/New Jersey. Fairway is a fairly small, privately-owned mini-chain, with a funky personality that turns shopping into an adventure. One of their owners, Steve Jenkins, travels the globe periodically to find unique products and purchase them directly at competitive prices. (I could be wrong, but I think they have the biggest olive section in the world. And their cheeses. Well, Jenkins has become a self-taught — and world-famous — cheese expert, and finds cheeses that make you want to go to Fairway for them alone.) It’s a quirky, cramped, friendly place … and people love it. Yes, their prices are competitive, but their real competitive advantage is the experience of just wandering the aisles and discovering foods you’re not going to find at the Super-store chains.
Then there’s Trader Joe’s, another funky grocery store that tends to place their stores in inconvenient places, offer limited choices and provide gourmet selections at reasonable prices. They have created loyal followers that are the envy of every grocer. It’s not the products (well, it is, kind of), but the experience. They do limited advertising, offer no weekly specials, and drive the other stores crazy.
Finally, take Aldi foods, which I used to think of as low-quality, low-rent stores. I was wrong. First of all, Aldi’s owns Trader Joe’s, bought them back in the late ’70s, and their owners, two German brothers, rank among the top five richest people in the world! Aldi’s dominates the grocery business in Europe. They have made their fortunes by offering excellent quality at up to one-third lower prices, with limited selections (see why they bought Trader Joe’s?) and a no-frills atmosphere. They succeed by buying directly, managing overhead ferociously and providing quality.
The point: If you want to compete (and you’d better want to), get outside the box and find a way to make you and your products and your business unique. Give yourself a special competitive advantage and skip the weekly specials. As with Fairway, Trader Joe’s and Aldi Foods, make what you have to offer so compelling that customers come to you … and keep coming.“Retailers and stores are not in business simply to sell more products. They are value delivery systems.” — Len Lewis (The Trader Joe’s Adventure)
So, work hard, make money, have fun … and learn to compete on your own terms. [Mini-ad: Need help finding your marketing groove and your unique competitive advantage. Call me.]JR Ingrisano The Freestyle Entrepreneur (920) 559-3722
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