Business Life Cycles
Are You Embracing Fundamental Change or Incremental Change?
Why does every branch of medicine have pediatric specialists? Are kids a different species than adults?
In a word, “yes.”
According to Dr. David Nichols, “Children are susceptible to different diseases than adults. Their basic anatomy is the same as ours, but they experience a whole different set of problems.”
Business life-cycles are like that, too.
When young, a business must embrace fundamental change. To survive and thrive, it must:
(1.) Differentiate itself from its competitors in a way that appeals to customer preferences, and
(2.) Substantiate those claims with something beyond mere ad-speak. We're talking about creating a believable, fundamental brand essence.
Consequently, a young business often grows by large percentages. Mature businesses rarely do.
But there are advantages to maturity. Mature businesses have:
(1.) repeat customers,
(2.) referral customers, and
to keep them humming. In other words, they can coast. This is why mature businesses usually think in terms of incremental change: “Tweaking.” “Refining.” “Getting to the next level.”
Be careful not to bite into the illusion of permanent success, Snow White, lest you fall asleep and be eaten by piranha.
You can be sure you've slipped into sleepy, incremental change when:
(1.) you feel you've essentially perfected your business model, and
(2.) your newest competitors are doing something significantly different than you, and
(3.) all your people are telling you that “targeting the right customer” is the way to get to the next level, and how “a rifle shot is better than a shotgun blast.”
But if rifles with cross-haired scopes are so superior, why don't we use them when shooting skeet or hunting dove, quail, geese or duck?
Might it be because they're moving targets?
Are your customers moving targets?
Rifles and scopes are for big-game hunters, those marketers who target rich people. (Use data-mining to get them in your crosshairs and then mail them something, call them on the phone, or drive to their offices and leave gifts with their receptionists. The current name for this technique is clienteling.)
Me, I prefer to keep both eyes open and the whole horizon in view. This is why I most often use the shotgun of mass-media to tell the world about my clients. To be successful, I must make sure my ads differentiate my clients from their competitors and that we substantiate every claim we make.
Don't worry so much about who you're reaching. Worry about whether or not they're impressed.
Is the public impressed with your product when they hear your ads?
If you want to experience tunnel vision, just close one eye and look through a tube. Congratulations, now you're targeting.
Has the time come for you to think young again? Are you ready to embrace fundamental change?
Open the other eye.
Roy H. Williams
If you need a jolt of outside-the-box thinking,
(1.) visit AmericanSmallBusiness.com, and then
(2.) nab one of the last remaining seats for the 2006 Wizard Academy Reunion (Oct. 21) in palatial Tuscan Hall.
Famous author and acadgrad Russell Friedman has a new book out about getting over past relationships. Reviewer Leeroy Jenkins says, “Ignore the Pink Cover, It's Not as Girlie as It Looks.” Jenkins' funny book review reminds me of what acadgrad Kary Mullis said to a tuxedoed auditorium full of dignitaries when he accepted his Nobel Prize, “There is a general place in your brain, I think, reserved for 'melancholy of relationships past.' It grows and prospers as life progresses, forcing you finally, against your grain, to listen to country music.”
Friedman's new book is called Moving On.