The best run businesses are obsessive. What they are obsessive about and how they manage their obsession, in my view, is one of the keys to long-term business success. So, what differentiates good obsession from bad? And why does it matter to your business?
Good obsession focuses mostly on the reality that the customer is king and must be well tended to… which causes management to seek the best ways to please its customers and constantly improve upon its best offerings… which helps a business gain and extend an edge on its competitors.
Bad obsession is when competitors are the #1 focus of a business and seen as mortal enemies to be vanquished… which causes management to lose focus on their customers, constantly lock horns in competitive battles, and neglect to build upon their advantages… ultimately causing a business to struggle or fail.
Based on your history and patterns, which describes you and your business?
A. Good obsession
B. Bad obsession
C. No obsession at all
If this were a graded test, “A” would be the only passing grade, because B and C can literally lead to failure over time.
Developing Good Obsession
Bad obsession in business looks a lot like the bully who must constantly put others down to make himself look good by comparison. This strategy, by definition, is more destructive than constructive, and often leads to some form of “live by the sword, die by the sword” trouble.
Don’t go (or stay) there!
Instead, the best “good obsessions” I’ve seen are when everything and everyone in a business is focused on continually making the business’ best and most profitable offerings (read here) more and more pleasing to customers, often with minimal focus on what the competition is doing… because the competition is usually busy trying to keep up with them, not the other way around.
Usually, in small business, great customer service and continual innovation and improvement are the hallmarks of this kind of good obsession. Show me a business that regularly adds these things to their best and most profitable offerings, and I’ll show you a successful business!
Competition is (Often) Over-Rated
Many of my friends are business owners, and one time when a few of us were together one asked another why he was so successful in business. His answer was: “Simple. Execution!”
He then went on to explain how the extras that set his profitable business services apart could be clearly seen by and repeated by his competition… but that few had the fortitude to stick with and do the extra little things on a regular basis.
Yes, competition is often over-rated, for this reason: most people and most businesses choose the easiest road over the best road. And over time, this makes competition over-rated, or at least very manageable, for those businesses that choose the “best road” and consistently execute.
Consistent with this reality, my advice is to forget obsessing about your competition. Instead, focus your attention on what you do best and most profitably and on challenging yourself and everyone and everything in your business to execute on delivering that product or service as best as possible to your customers each and every day.
Price Competition is for Losers
If you take the foregoing advice, you may soon find competitors trash talking your business and trying more aggressively to beat you through price competition (which is often a clue you are winning in competition).
Though I recognize some businesses can (for a while) survive or ding your business volume using low price as their advantage… price competition is literally the “plan” of losers in small business. It is the thing businesses most often resort to when their offerings are found by customers to be indistinguishable from or inferior to other’s.
If the low-price plan happens to your business or describes your own business plan, my recommendation is that you avoid competing with it or change it. Though you may help your business or business volume for a limited time, in many cases it will over time leave your business insufficiently-funded or constrict your business to offering average-to-inferior products or services to your customers... often leading to long-term failure.
Further, if your business is such that the only way to gain business is by the lowest price or bid, I recommend diversifying into other less-competitive, more-profitable offerings that are not solely purchased or won based on price alone.
Innovation and Improvement is for Winners
The opposite of competing on low price is competing on innovation and improvement.
Not every small business type lends itself as well to sustained innovation. Yet, the point is that customers do notice, appreciate and make buying decisions based on innovations and improvements - even if they are relatively small ones.
As a glaring example, I’m convinced the business model of luxury car makers is entirely dependent on the ongoing introduction of new convenience or cool add-on features that get buyers excited. It wouldn’t shock me if the decisive factor in many luxury car purchases hinges on some high "wow" quotient add-on innovation that catches customers imagination.
Even if your business is not selling luxury products or services, this same approach – constant incremental feature innovation – can help set your business apart from competitors!
Be a Winner
Some add-on innovations that set winners apart from the pack in industries we serve include:
- Better (honest, understandable, available, responsive) communication with customers
- Respectful and trustworthy employees or crew members
- Predictable, no-surprise pricing
- Cleanliness, especially for work done on customer property
- Well cared for and visually-pleasing work vehicles, assets and work samples
- Timeliness and predictability in completing work within schedule
- Availability in emergency circumstances
- Offerings that are more customer-friendly, even if just by a little bit, vs. what others offer
Like my friend and his successful business, you may be surprised how even a little extra sustained “execution” in any or all of these areas can set your business apart for success, and afford you the luxury of not having to obsess about your competition!
If we can help you set plans to get there, I encourage you to contact us here.
Long live small business! Long live small business owners!
Jim Smith, CFP, Founder, PERFORMIDABLE, LLC