The 8020 Blog

We seem to be wired to “do” more than we are wired to “think”.

Nike’s adage of “Just Do It” is great if it follows “Just Think It”. But if “Just Do It” comes before “Just Think It” then all the “Just Doing It” is probably just going to have you spinning your business wheels at a faster and faster rate: working longer, working harder but staying in the same place.

The hard work is not in “doing”, it’s in “not doing”. The hard work is in thinking.

That is … thinking about how you can tap into the specific unmet needs of a small slice of a large market and then expand from there. Thinking about how you can re-engineer your product so that it has features (or pricing, packing, promotions) that are more seductive to your Ideal Client than your competitors’ products. Thinking about your distribution model and how you will motivate and empower re-sellers to wake up every Monday morning thinking of ingenious ways to sell my product - with a passion.

There is a lot to think about and I don’t have all the answers but I do know this: one gram of good business strategy outweighs a tonne of hard work.

When it comes to thinking strategy, most business owners over-invest in product development.

Here’s a step by step guide to what happens…

1. You have an idea for a new product/service that’s going to be a winner - for sure. Let’s call it a “Rupert”…

2. You spend money with graphic design people making your Rupert look sexy, you talk to your ideal customers about what they want/don’t want in a Rupert, you repeatedly work until 3 in the morning, you hire customer service people, you do a budget with your accountant and then you unveil your Rupert to the world…

3. Sales are encouraging but not as strong as you would like…

4. You change accountants, add more features to your Rupert, re-price your Rupert, fire your web developer and hire a new one and put a new fancy stripe on your Rupert…

5. Sales are encouraging but not as strong as you would like

6. You repeat step 4 with some variations…

7. Sales are encouraging but not as strong as you would like…

(and so the endless death-loop spiral continues…)

I’m not saying that a high quality, well-target Rupert is unimportant; I am saying that it’s not enough. Once you have your product well-sorted it’s time to focus (key word!) more of your thoughts, time, money and your team on the harder part of effective strategy: marketing and distribution.

The world will not beat a path to your door if you build a better Rupert. Ask Ray Kroc, Seth Godin or Steve Jobs - it’s marketing and distribution that makes the difference.

Hopefully you are real clear on:

1. Who your ideal client is
2. What the specific unmet needs are that you are going to fill
3. How you can find them
4. How you communicate your product proposition to them in a clear and compelling manner

If not then invite you to think about it.

If so then there is one more strategic step that will make your business a whole lot easier: instead of asking your clients to hit a home run, get them to first base first.

All too often marketing invites prospects to engage in a product or service at a level that represents a home run e.g. the product proposition is too complicated, too expensive, too intensive, too whatever…

If your ideal client is someone wanting to spend a million or more on a new home then perhaps invite them to “first base” by offering a $499 land appraisal service.

Why? Because it’s five times easier and 80% less expensive to up-sell an existing client than it is to find a new one. So create a “first base” value proposition that is packed with so much value that it’s a no-brainer (”I don’t need to think about this”) for your ideal client.

Then up sell them like a seasoned MacDonalds pro: “would you like a million-dollar house with that sir?”

Business strategy is about making the right big decisions before making the right small decisions.

One of the big decisions is how much to borrow. There are business leaders who mistook the Economic Cycle (goes up and goes down) for an Economic Spiral (only ever goes up) and borrowed accordingly. Their self-destruction was always assured and only a question of timing.

And that’s the bad news about a recession -  the culpable and the innocent get hurt alike - financially, socially, emotionally.

But the winds of change bring new opportunity for all. And the good news about a recession is that provided you work smart and hard you’ll emerge from it leaner and more profitable and with less competitors.

Recession are the commercial equivalent of natural selection.

I love the movie “Rocky Balboa”. OK so maybe Sly is not the best actor in the world and the final boxing fight scene is pure Hollywood dribble BUT - the script writers really shine.

In one scene Rocky is talking to his old trainer about getting into the ring again - “just at a local level” - his old mentor is doing his best to convince Rocky that it’s a pretty stupid idea and asks him why the hell he would want to fight again.

Rocky’s reply: “It’s in the basement” - pointing to his gut.

It’s the same thing for me and I know for millions of other business leaders. We love the business fight. We are addicted to figuring out a new strategy, putting it in place, getting knocked down, figuring out another  new strategy, getting it right, getting more happy clients, seeing the bank balance go up, trying something new, getting knocked down …

It’s in the basement: it’s a feeling in the gut - you get addicted to the game/fight/battle of business. The scoreboard is market share and new clients and retention of current clients. Sell your business and you will miss the game and you’ll want to get back into the ring again - cos it’s in the basement.