The Vision: Competition
By
Dave Tate
From 10,000 Feet, The View Is Clear: Introduction
The first installment of this series -
The Vision - was published
during our 2009 holiday rush. Although it was very well received, I forgot to
publish an introduction describing what this series is about and how it began.
The Vision and all preceding segments actually began two years ago as an email
correspondence between me and consultant
Mike Szudarek, a
business advisor.
Mike first contacted me four years ago regarding potentially working
together. At the time I wasn’t in a financial position to hire him, but we
shared a similar passion for training. If it wasn’t for Mike being a competitive
powerlifter and our sharing an interest in training, I would never have
responded to his e-mail. It's hard enough to explain my own passion for training
to family and friends - let alone a business advisor.
Keep in mind that EliteFTS’ target market is you, the person reading this.
For the most part, our target market is made up of people who would say that
training is one of their top four priorities in life. If you don't "live it,"
you won't "get it." This caused problems when I started looking for advisors and
consultants to grow and expand my business. If they don't “live" in your market,
they will never "get it.” Trust me on this one, I've been there with others and
all they did was cost me money with zero return. At the same time, just having a
passion for training isn't enough. They HAVE to know their stuff.
I’ve learned over the years that when you find someone who fits both of
these requirements, you need to be sure to find a way to either make them part
of your team or keep them in the wings. DON'T let them off your radar.
Because of Mike's skill set, it didn't take long until we had him on
retainer. This, however, isn’t an article about Mike or his firm - although I
could write many with regard to things they helped the company develop and even
more on how they helped educate and develop my own personal skill set - this is
about the progression of EliteFTS over the years. Mike thought it would be a
great idea to go back and look at the early years, and each growth phase from
there, to see how my own personal perceptions have changed over the years. This
began as a teaching and gratitude tool and became more and more interesting as
it unfolded with each question.
What makes this even more interesting is the fact that we never finished
it. It wasn’t critical to other things we had been working on, and it was placed
on the back burner as more and more things came onto the table. In time, it was
forgotten. As I was going though my folders, I found the document and spent the
next hour reading all the Q and A's. Now the concept has been reborn, except it
has become much more interesting because SO much has changed. What we had listed
as "A Mature Business - Today" was no longer "Today." Almost every system we
used had changed over the past year. The recession hit us very hard, and now the
way I look at the future of the business isn’t the same as when I wrote the
"Mature Business" section two years ago.
Q: Is competition important?
The Early Years
A: This is a hard one to answer. I’d like to say it wasn’t because I really
didn’t study it, but at the same time, I knew weaknesses that I “as a customer”
didn’t like. For example, some companies take forever to get products to their
consumers, while others have cheap equipment, and rarely did anyone have
everything I wanted in one place. At the time, I didn’t see any of this as a
competitive advantage because the market was used to the policies of these
companies. I just knew I hated it as a customer. I grew up in a household where
my parents started and grew a successful small business. They were very
customer-oriented and engrained this quality into my mind. I wanted to take care
of the customer with great service and quality products. This quality was
lacking in most of the industries we were to compete with. In these aspects, the
competition was important.
I didn’t study what they did, the products they offered, or the policies they
used. Everything was formulated based on what I wanted if I was the customer.
It’s important to know that I WAS and AM a customer in the industry, and have
been for most of my life. It was easy for me to know what the market would like,
because in most cases it was what I liked. All of my friends and associates were
also athletic competitors, trainers or coaches, and we all spent a very large
part of our lives in weight rooms. Not only did I know what I liked and what I
wanted, but I also knew what other potential customers wanted. I figured it was
far more important to figure out what the market needed and wanted, rather than
spending my time worrying about the competition.
Plus, I wasn’t sure who the competition really was. We serve the
powerlifting, personal training, strength coaching and strength enthusiast
markets. We have products ranging from books and videos to high-end weight
lifting equipment. Other companies focus on one or two of these markets, but
very few try to target all of them. We’re also an online company, so we compete
with all other online retail and auction companies. We publish articles weekly
and have an ongoing Q and A section, so we compete against all other online
media outlets. To be successful, we needed the customers sitting at their
computers, so we’re actually in competition with television, video games and
everything else that keeps the customer away from the internet.
Rapid Growth And Expansion Phase
A: As the business grew, I started studying what the competition was doing. I
compiled detailed research of every company I felt I was competing against, as
well as the ones I felt we would be competing against in the future. The
research reports detailed their history, strengths and weakness, and included
interviews with customers that I knew did business with them. I also ordered
from them and noted how many rings it took before they answered the phone, what
was said, how long it took to place an order, whether they used my name, and
whether they said “thank you” - EVERYTHING. I then tracked the time it took to
get the product, how it was shipped and what packing material was used. As I
stated before, these were very detailed reports that took close to two
months to complete. After I gathered the data, I had two people retrieve the
same information from EliteFTS. This was hard because we only had two employees
at the time and I didn’t want to know, or want my staff to know, that we were
being tested. This is a practice I still use today and never know when we will
be tested, except that it happens every quarter.
After I gathered all the data, I compared it to what we were doing and came
up with absolutely nothing of value. I decided it was more important to stay
abreast of what we were doing and to make sure we were keeping
our systems in check. I worried about my company and let the competition
worry about themselves. It was great to study them and know their strengths and
weaknesses, but in the real world, the competition isn’t a fight where one
company has to outdo the other. You can try to beat their price, offer better
service and have higher quality, but with so many companies marketing false
claims, the buyers have become numb. If you’re going to compete, you need to
worry about your prospects and give them the best total package you can. It was
after this that I began to really study the demographics as well as the wants
and needs of the customers. THIS is how you compete and where the focus should
be.
A Mature Business - Prerecession
A: I rarely looked at what the competition was doing. I wasn’t on their
mailing lists and I rarely went to their websites. Our marketing plan had zero
direction based on what the competition was doing. I’m not saying that I’ll
never study the competition again, because this is not true. As we grew and
entered into new growth phases, I felt we needed to explore and know who is
rising and what we are up against. This isn’t for competitive reasons, but more
for sales reasons. In some cases, to sell your product you need to know the
product of your competitors to better service your customers. You won’t make
every sale, and sometimes you may not have the right product or service for the
customer. Rather than trying to sell a customer a product you know will not
serve their needs, it’s better to send them to someone who will. This may send
them to your competitor. You may lose the sale, but they will remember the fact
that you placed their needs ahead of yours. In the long run this will be worth
much more than one sale.
Survival Mode - Recession
A. While I wrote in The Vision and in the previous section, (which was
written two years ago) that I didn’t look that hard at what my competition was
doing, that all changed. When we began to feel the effects of the recession in
September 2008, the first thing I did was look at how the overall economic
climate would affect my competitors, as well as our venders. Would they make it?
How long would they last? What was their current market share? Did they share
and compete for all the same demographics as EliteFTS, or did they target other
sectors? What were their strengths and weaknesses? Did they have a product
strategy? Promotion strategy? Fulfillment strategy? What was their pricing
strategy (market, value or cost driven)? Who were their key suppliers? Key
customers?
I had to go back to the basics and revisit these and many other questions.
Some players were no longer in the picture, while others seemed to be getting
stronger. Even a few new companies were emerging. A competitive analysis is
always a complex process because you don't have access to their finical records,
and you have to work with the best data you can collect. There are two ways to
do this. The first is the way most small businesses do this - the lazy approach
where they ask a few friends to do a quick web search and call it a day. The
second way – which is a lot better - is to answer all the questions I listed
above, plus A LOT more (and no, I'm not going public with my entire competitive
analysis process for obvious reasons). Just remember that you can get far more
information than you think.
It was after I organized all of this information and completed my own company
analysis (a topic for later) that I was able to begin working on a
recession-based strategic objective. Looking back there’s no way I
would’ve been able to formulate any plan without all of this data. Then, the
company wouldn't have been in a position to take advantage of some of the
opportunities that presented themselves. To illustrate: Over the past year,
we've had many suppliers that didn't take the time to create a "survival
strategy." They ran into financial issues, customer service issues, fulfillment
issues, etc. This same situation happened to many of our competitors and placed
even more stress and problems on many suppliers. Part of our strategy has
already been seen, with the increase in our own branded products. The recession
created a situation where main suppliers weren’t getting the orders they were
accustomed to, or they weren't getting paid and were ready to look at other
options. Our goal was to be in a position to take advantage of these new
options. Many factors were associated with this outside of competitors, but they
were definitely at the root of it and had to be analyzed.
I would like to point out that if I hadn’t learned how to do the competitive
analysis in the expansion phase, EliteFTS would not be here today. I know this
for a fact.
Expansion Phase - Today
A. Now that we are on the back end of a recession, what are my current views
on competition and a competitive analysis? I still feel that you need to revisit
this system at least one time per year. But, as pointed out in The Vision, most
of your time needs to be spent on your OWN company’s strengths and weaknesses.
The keyword here is COMPANY. I’ll always be the first to take responsibility for
any shortcomings with the company. I'm responsible for who does the hiring,
teaching and training. But, I can't take the credit for anything the company
does. With close to 80 people associated with the company, the credit belongs
FULLY to them. Because of these 80 individuals, the company HAS to be larger
than any one person - including me. This is one of the most important lessons
one can ever learn in business, and one of the hardest to practice.
What does this have to do with competition and the views "I" have on it
today? EVERYTHING - because it's not about the views "I" have, but what the
numbers and analytics say.
The Takeaway
A competitive analysis is a very valuable tool and needs to be part of your
strategic planning process, but it shouldn't determine your vision. It should
only help direct it.
After eleven years in business, I’m still learning and have yet to figure
everything out – but I’m not about to stop trying. I can't overstate the
importance of investing in yourself and your company. I believe that if you
don’t, you will go out of business. Study, read, analyze, and bring in
consultants and advisors. Hire people smarter than you are. These are some of
the factors I feel very strongly about. I'm very grateful for this company and
humbled that anyone would look to me for business advice. This is a fun series
for me to write because it’s causing me to go back and reevaluate many concepts
and principles to see how they have changed over the years.
If you would like to contact Mike Szudarek with regard to his services, you
can reach him at:
mikes@elitefts.com
Click here to see the previous
Vision
article.
Elite Fitness Systems strives to be a recognized leader in the strength
training industry by providing the highest quality strength training products
and services while providing the highest level of customer service in the
industry. For the best training equipment, information, and accessories, visit
us at www.EliteFTS.com.
