This week, we saw the downfall of a seemingly invincible athlete – Rhonda Rousey who had to face the painful reality that you’re only as good as your last fight. The defeat of the formerly undefeated UFC fighter illustrates an important lesson of competition that can be applied in the business world.
Rewind back to the 1950s – it took nearly 20 years to replace one third of the fortune 500; in the 1960’s fewer than 10 new businesses were added to the list each year. Today, over 50 new businesses are added to the list each year, and 88% of the Fortune 500 from 1955 has vanished. The constant turnover in the Fortune 500 is a positive sign of the innovation that characterizes a vibrant consumer-oriented market economy, and that dynamic turnover is speeding up in today’s hyper-competitive global economy. This also means the industry leaders need to be aware of the increasing changes with competition of emerging marketing looming even more closely.
Corporate leaders cannot afford to be complacent – if they do not adapt to change quickly, they risk being defeated by a more nimble competitor. Bill Hawkins, executive coach, business speaker, and bestselling author interviewed the president of a large retail organization. They concluded that being average just doesn’t cut it anymore, and examined what is changing the market to make the industry so competitive.
Here are the four trends:
- Unexpected competition. Sirius Radio has always relied on their varied and unique programming to distinguish themselves. Major league baseball released an iPhone applicationthat will stream games from all 30 teams. Sirius customers get that now. Only iPhone will also offer video clips, live score updates and do it all for $10 for the season. Sears is offering toservice your car as you shop. Wal-Mart is in the grocery business, and Google is entering the Venture Capital market with $100 million commitment. As one executive pointed out, “Theconsumer is measuring you against competition that didn’t exist until now.”
- Well informed consumers. More than half of patients research their symptoms and alternatives before visiting a doctor for a major health issue. They won’t hesitate to ask what pacemaker will be implanted, what medications prescribed. Pharmaceutical companies advertise prescription drugs directly because it works. Few people directly call hotels or airlines anymore to make reservations. They shop for the best price. Before visiting the local auto dealership, a car purchase begins with building your ideal automobile online and finding outwhat the dealer pays the manufacturer for it.
- Speed of competitive response. What happened to the yearly sales plan? If your sales promotion, pricing, or product introduction is successful, the competitive response is immediate. One leader explained, “We used to track numbers by product, by location monthly; now it is daily. We need to be prepared and flexible to change our product mix, pricing, andstrategy in real time in response to what customers and competitors are doing.”
- Customers are more demanding. They don’t have enough cash. They can’t easily borrow it, and they spend as little of it as possible. Over 60 percent of organizations now rate financialpressure to cut costs as one of their top two priorities, up from 36 percent three months ago. Retail operators are seeking rent relief from landlords and getting it. Double-digit rent reductions are common. Your customers/prospects are in pain and demanding relief.
Three Things You Can Do
- Reduce Costs. Customers are saying, “If you want me to buy from you, help me reach my goals with a reduced budget.” So look for ways to reduce transportation costs, bundle products, change the packaging, offer bulk purchase, extend warranties, or show flexibility in payment options. Offering products or services that cost less and save time is a winning combination.
- Add Value. Rhonda has been in the limelight of the media not only for her exceptional fighting skills, but also for her attitude and being a role model and inspiration for other females and athletes. Her competitor Holly Holmes was also undefeated in the sport, but Rhonda is paid substantially more, and has even been offered roles in films and television shows based on her personality and following. Do something different from your competitors, whether it is your exceptional customer service, the quality of your product, or your companies affiliation with a social cause or charity – just add value that will raise you up above your competitors.
- Innovate. Organizations have downsized. One head of customer service explained, “Customer calls are more difficult and time consuming – and we’re doing it with fewer people.” The challenge is to get more done with less. Their energy is committed to getting today’s work done. The resources (time, people, and money) just aren’t available to do much else.