Ninety Seconds To Success Series: Your Biggest Competitor
Volume 142 NO.2 March/April 2012
Furniture World Magazine
By Ray Morefield
Sam Parker wrote a distinguished work titled, “ 212: The Extra Degree”. The core concept of the book focuses on the fact that at 211 degrees water is hot; at 212 degrees, it boils.
Seemingly small things in the “profession of persuasion” make a significant difference.
Mr Parker suggests that applying an extra degree of temperature to water means the difference between something that is simply very hot and something that generates enough force to power a train.
That is a beautifully uncomplicated metaphor that should ideally feed our every endeavor from persuasion to parenting, from providing service to selling, consistently pushing us to make the extra effort in every task and every action that we undertake.
Since the 1950’s we have lived in the golden era of civilization. When we enjoy the good life, and we do, why is it critical that we strive to operate at 212 degrees and consistently seek continuous improvement?
Some answers may be obvious, but in addition to challenges in the Furniture industry there may be additional challenges... and they may involve ….. other industries.
COMPETITION IS KEEN
Competition may be keener in our society today than at any previous time in our history.How do we arrive at that conclusion?
Well, let’s look at and list your greatest competition.
Some may say, other independent furniture retailers; some suggest chain or big box stores, mass merchandisers, discounted imported goods or email merchants, but careful consideration may cause us to pause... and justly so.
Step back for a moment and look at the competition for our customers’ personal checkbook.
Let’s see how Mr and Mrs John Doe divide their disposable dollars, after withholdings, provided their income is over $40,000 annually.
Demand For The Dollar
The demand for the dollar from the consumer’s checkbook, on average, suggests we spend:
- 31 to 32% on our homes, our furnishings, amenities and upkeep;
- 15 to 16% on food and beverages;
- 14 to 15% on transportation, fuel and maintenance; 9 to 10% on clothing and accessories.
All remaining categories are single digit. They include: additional taxes, electronics, recreation, vacations, computers and communication, utilities, pets and vets, medical care and pharmaceuticals, insurance plans and protection, miscellaneous and sometimes savings.
We did not include college educations, charitable donations or emergency expenditures.
Add up most budgets and you get 102% on the high side. Sound familiar?
The average American consumer saved little money until 2011. Using credit they regularly spent 2% more than they normally took home.
Now, I’ll ask the question again… who’s your greatest competitor?
Well, it soon becomes obvious that every person that is managing a business is your competition, not just those who sell either furniture or furnishings.
Every time your customer drives past -- a gas station, an auto dealership, an amusement or ball park, a grocery or convenient mart, a mass merchandiser or discounter, a travel agency or airport, a medical center or a hospital, a university or college, a fast food or a 5-star restaurant, a home improvement or lawn and garden center, a drive-thru or pizza parlor, a cemetery or mortuary -- they are driving past your greatest competitor.
Every Consumer Has Limited Dollars
Every consumer has a limited number of dollars. They stretch only so far and every merchant wants a cut – of – the – buck.
And if your customers do not drive past your competitor’s place of business, other entrepreneurs call on the phone; send an email or direct mail. If they don’t advertise by mail, they sell their databases to someone that does; use TV, radio, newspapers or magazines; highway billboards; bumper stickers; even take to the sky with hot air balloons and blimps.
Now -- I’ll ask the question again… who is your greatest competitor?
Regardless of what we sell, regardless of how we increase our knowledge or improve our skills, it is imperative that we seek continuous improvement.
Remember that adding just one extra degree to hot water brings it to a boil. That one extra degree of improvement can make the difference in successfully competing for your customer’s disposable dollar and a share of the market. for your consideration are eleven actions that can help you to ad that extra degree:
#1- Frequently Engage In Continuing Education:
New management and business concepts evolve continuously and it is essential for managers to keep current. The good news is that it is easier to access continuing education from a variety of resources such as the internet, industry associations and institutions of higher learning.
The American Management Association (AMA) conducts hundreds of seminars each year. Of the courses they offer, one of the most frequently attended are the time management seminars.
Ralph Waldo Emerson said: “This time like most times is a very good time – if we know what to do with it”. Many of us suggest if we had more time we would be more successful. It is important to note you have exactly the same number of hours per day as William Shakespeare, Madam Curie, Mother Theresa, Thomas Edison, Henry Ford, Steve Jobs, Thomas Jefferson or Bill Gates.
#2 - Stay Active In Important Community Affairs:
Consider service organizations such as Rotary, Kiwanis, Lions, United Way, Meals on Wheels, Habitat for Humanity, YMCA, Scouts or the American Red Cross. Our normal sphere of influence is 220 to 240 people. Involvement in just one organization can double or triple your sphere of influence in your marketing area in a positive and meaningful manner.
#3 – Build Brand Recognition:
Much advertising stresses features and benefits, however, features/benefits are of little interest to your customers until it is time for them to make a decision. The critical first step when a need or a want arises is to trigger the name of your business or products in the mind of your target consumer at that time.
#4 – Become A Specialist:
Market with the intention to become the leader in a category. It is difficult to become all things to all people. When you become a generalist, like big box stores, price is frequently a leading consideration. As a result, to simulate sales, margins shrink and frequently, quality is moderated.
Innovators excel. Imitators follow. First in the market, gains and retains market share. Steve Jobs with new, innovative ideas, and creative ideology triumphed price and sales soared without price or discounting becoming the key consideration.
Specialization separates your products and services from the masses and protects margins. Perhaps the most significant way to create the Unique Selling Position (USP) is to become the specialist in your marketing area.
#5 - Understand Your Limits:
Don’t attempt to be all things to all people. Mastering and managing your inventory is a challenge that carries a cost of 2½ to 3% per month. The Dartnell Sales Corporation advised the rate of turnover was the most important factor in business.
Find your niche in the market. Make it the focal point of your business. Master the scope of your products, service or operations and you’ll become the master of your fate.
#6 - Measure The Effectiveness Of Your Forecasting:
All spending is predicated on forecasted revenues. When we find that our forecasts are not accurate, we over-inventory, over-staff and over-promote. When reality does not meet expectations we are frequently met with cash flow limitations.
#7 - Stress People Skills:
Stabilize your work force. Minimize your turnover. One of the major reasons that businesses fail is failure to match skills to the job.
Employees who enjoy their work excel. People relate to people, frequently more so than they do with products.
Michael Abrashoff, U.S. Navy military management specialist, advises when personnel turnover occurs, the cost of developing proficient skills for maximum effectiveness in the new position, as a result of change, is equal to 1½ times the employee’s salary.
Most impressions are made in the first 10 to 20 seconds. First impressions are important.
Psychologists suggest that if customers like us, they trust us. Trust is critical if we are selling service and quality as opposed to price. Price seldom generates customer allegiance and repeat sales. It is far more costly to advertise to bring in traffic than to retain an existing one.
#8 – Avoid Discount Fever:
Almost daily the frequent incentive to encourage traffic and sales is the insidious discount. Many who attempt to match competitors find it the road to ruin. Accountants advise cash is king. Yet nothing compromises cash flow more than discounting.
#9 – Learn To Manage Change:
Business is changing with the speed of light with advancements in logistics, communication and technology. Psychologists advise the biggest problem in business and industry is resistance to change or as Edwin Deming preferred to call the process “transformation”. Successful managers focus on building a “culture of change” that employees are willing to adapt. It is understood that more important than the change is the manner in which change occurs.
#10 – Stress Publicity.
Use a balance of advertising and publicity. Advertising is a necessity. However, publicity with emphasis on storytelling has proven to be 5 or 6 times greater than the readership of ads. In addition, when publicity features people the retention of the story is enhanced.
#11 – How You Purchase Products And Services Is Directly Related To How You Sell:
Buying in a manner that allows you to offer options is a meaningful step in closing the sale. Some suggest 3 major reasons we fail to close the sale are: a failure to offer options; coming back with the same sales pitch; and rationalization. Close by offering options of size and design. This helps minimize the yes/no closed response and involves the buyer in a meaningful manner. And consider the merit of options other than product including payment plans, guarantees, delivery, etc.
Remember To Apply The 212 Principle
Unless 212 is your constant companion, your business is at risk of attaining just lukewarm performance.
The history of successful business entrepreneurs suggests that the greatest challenge we face may not be external competition but the self-imposed internal limitation of the mind. If that’s true, regardless of the nature of your competition or the state of the Union, small things in the “profession of persuasion” do make a difference, and you are in control.
Ray Morefield has been affiliated with leading corporations in the housewares, hardware and coatings industries. He has also served other industries in an advisory capacity through Common Goals, Inc. Questions or comments can be sent to him by emailing firstname.lastname@example.org.
Read other articles by Ray Morefield