QUESTION 1: How does a profitable business become a no-profit business?
There are two pre-conditions of a non-profit business; the first is an excessive amount of ‘sameness’ in an industry or market. I often refer to it as ‘commercial marketing incest’, where everyone looks to everyone else in their industry, for what to do; they copy each other feverishly and after a while it really does begin to resemble some form of incest – because everybody just gets dumber and dumber! One industry where this is most frustratingly evident is the real estate industry. With a few outrageously successful exceptions, all real estate ads and their selling methodology respectively, look and sound the same.
When everyone vies for business in the same way, most often they do so based on price alone. Their product or service has become a commodity! And this is where a lot of companies go from making money to losing it!
The worst thing that can be allowed to occur in business is the playing field becomes level! And that’s why I advocate creating your OWN playing field with your own rules and equipment; one where your competitors won’t and can’t play! In the real estate industry, John McGrath does this by hiring a handy man to change locks, replace broken light globes, fix leaking taps, turn on hot water systems, and clean up gardens and such, for the new owners of properties he sold them. John even arranges for the electricity, gas and telephone accounts to be transferred to the name of the new owner and turned on ready for the day they move in. By taking care of these things, he turns what is generally considered to be an enormously stressful experience, into as pleasurable a one as possible!
So is “commoditisation” developing or has already developed in your business and industry?
The second condition which can turn a profitable business into a NON profitable one is the loss of a profit centre the industry has come to rely upon. In an advertising and marketing sense, any one of the following media may have been relied upon; email, broadcast fax, telemarketing, infomercial, print media or radio. Pokie machines are the profit “life raft” of certain hotels and clubs. What might happen if poker machines were outlawed or if every hotel was allowed to put them in? Without any prejudice whatsoever, where have all the real estate seminar guys gone, since the “protective big brother” turned its intense focus in the real estate seminar industry?
Are YOU dependent upon any one profit centre which could be “kicked out from under you”? Is it possible there could be a sudden disruption to an accepted industry pattern?
QUESTION 2: How does an unprofitable business which has allowed its product or service to become a commodity, become profitable?
Starbucks redefined coffee; from being simply a beverage (commodity) they have turned it into an ‘experience’. Surf shops have done the same, by employing the “Disney” marketing principal of “Do what you do so well, people can’t help but talk about you”! And then of course they take the money to the mouse. That’s the case with John McGrath; he delivers the unexpected (with little cost to himself) and customers and prospects TALK about it!
The client you are getting by accident can be MULTIPLIED with purpose!
Here’s the opportunity; virtually NO-ONE is WOWING anyone in any industry. Chances are it’s not happening in your industry either. The BIG opportunity though, is in seeing that it happens by DESIGN, not leaving it to chance. How do you WOW your clients so they can’t help but talk about you?
Best regards ,