January 14, 2008

Growing Your Business: What Gets You In Takes You Out

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A friend recently shared a pearl of wisdom that he learned from his father many years ago: What gets you in can take you out. If you compete on price, price can knock you out, while if you compete on quality, the competition has to beat you on quality - and that's a much tougher task.

An example can be found in the food business - a mature industry. Food manufacturers frequently compete on price because the differences between their products are difficult to distinguish, let alone describe. Some sellers of food products rush in and say that they're the lowest price vendor and promise the best price in the market. Their hold on their customers can be pretty precarious, though. Buyers who purchase on a best-price basis will change vendors as soon as someone else comes along with a better price. On the other hand, if one goes into a sales call positioned as a top-quality vendor, and the quality that the vendor describes is sufficient to convince that buyer to change companies, then it's going to take a another top-quality vendor who can offer even better quality to lure the buyer away.

It's unusual for a company that buys on a quality basis to switch to the low-cost vendor. In fact, when companies, such as stores, change the basis on which they make their purchasing decisions, they frequently suffer because their customers expect a certain quality. Customers expect their suppliers to offer either low prices and medium- or low-quality merchandise, or to offer higher-priced, higher-quality goods.

So, as you are working hard every day to build your company, or as you're building your career, remember that the attributes, benefits and features that you bring to the table when you go into a sales call are the attributes that your competitors can use to take your place. You need to aim high and make it as difficult as possible for your competitors to knock you off your perch.

About Joel G. Block

Well known in the business community, Joel Block is a best selling author, speaker, and business strategist. Frequently a principal in his transactions, Joel has raised tens of millions of equity dollars for his ventures, which have included real estate syndications and privately held businesses.

Joel’s career is highlighted by the launch of a financial publishing company which he grew nationwide and later sold to the Los Angeles Times. More recently, Joel works with scientists, engineers, technologists and others to help them optimize their entrepreneurial opportunities. Would you like to get a private phone consultation with Joel? Visit www.joelblock.com/capital for details.

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