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.