Anyone that has studied basic biology will have a general idea of how our vision works. Human sight is produced by two images, one from each eye being received by our brain via the optic nerve. Because there are two different images, we get a double description of the view in front of us which results in us gaining extra information i.e. depth of field. This is easily demonstrated by closing one eye, extending your arms out to the side and attempting to get your index fingers to meet in front of you. Sometimes your fingers will meet and sometimes they won’t because with one eye closed, you are not getting the full picture.
In a business context, it is important for us to constantly look at our approach from multiple perspectives. Business owners that try to go it alone often suffer because they are operating on a single, potentially biased perspective. They are running their business with one eye closed!
It is good practice to regularly examine your offerings and imagine yourself as your own customer. If your competitors are offering something better than you are, acknowledge that and strive to either improve your product or service or add value in other ways. You could make your delivery and customer service outstanding, offer additional benefits free of charge or implement an extended guarantee. Quality is not the only variable in a business buying decision; service, price, delivery time and guarantees are all ways that you can add value. As discussed in the section on business failures, companies that don’t provide continually improving services to their customers stand to lose to their competition. In order to be an effective seller, it is important to step into the shoes of the buyer from time to time. Where possible it is also good practice to purchase from your competition to see how they deal with their customers.
It is important to understand your market well and be wary of making quick decisions about your products or services. When it comes to knowing exactly who your customers are and what they want, it’s not just smaller business owners that have difficulty. In the late 90’s, Coles Myer decided that the Grace Brothers and Myers department stores should aim at the youth market. This strategy saw them reducing the quality of the merchandise in their stores. Along with the ‘down-grading’ came untidy stores, lower quality products and poorer service.
What Coles Myer management didn’t take into account was that the 22% of the population responsible for 50% of the nations discretionary spending were more interested in quality and service. Customers began comparing Grace Brothers and Myer to cheaper discount stores and they left in droves. Regular competitor analysis is an important part of finding out where you stand in your industry.
Some business owners believe that they don’t have any competition. Someone who thinks this way, particularly in small business should be concerned because, assuming it’s true, you are in a market that others are not interested in occupying. You may need to ask why!
If you have competitors selling similar products or services, you need to know what separates both offerings. This is especially important if you plan to charge a higher price for your goods or services. Getting involved in a price war with your competition can be a very uncomfortable experience. In the end everyone suffers if margins are squeezed because quality and often service are negatively affected which of course impacts on the customer experience. The way to avoid this is to be the best at what you do and do it differently to everyone else. Problems arise because business owners continue to do things the same way. If you are facing a recurring issue you need to do something different to solve it. It’s a simple fact of life - tackling a problem in the same way as you always have will always net you the same result. As Einstein so famously defined, ‘Insanity: Doing the same thing over and over again and expecting a different result’.
It is very common for business owners to get so close to their business that they can’t see the forest for the trees. Whilst it’s understandable to get bogged down in the details it is imperative that business owners remain focused on the big picture.
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