The race is on and your customer knows it. There has never been stiffer competition in the business world than there is today. And the competition is going to get even more intense in the months and years ahead.
If you want to change your business life forever and save yourself years of hard work and frustration, try these four tips for achieving higher profitability:
1. Develop a clear mission for your business. For you, your business and your employees to perform at a high level, everyone needs a clear vision of what the business stands for and where it is going. The first question you have to answer when defining your mission is this: Why does my business exist at all? A mission must always be defined in terms of how your business benefits others. A good mission statement will contain a method by which the mission is to be achieved. Furthermore, an objective third party should be able to assess whether or not your business is living up to its mission.
2. Determine exactly what business you are in. It’s absolutely amazing how many businesspeople are fuzzy about the businesses they are in. You should always define your business from the point of view of your customers. What do your products or services do for your customers? What are the specific benefits that your customers enjoy from using your products or services? More to the point, what business will you be in tomorrow, considering the current state of your industry? And finally, what business would you be in if you were to take the lead in your industry? Remember: The very best way to predict the future is to have a hand in creating it.
3. Determine exactly who your customer is. This is the central question of all marketing, sales and profitability questions. The ability to accurately define your customer is the primary determinant of your success. Define your customer as accurately and as precisely as you can. For example, do you know your customer’s age, education, income, position, value base, philosophy and background? Where exactly is your customer located geographically? Most important, how does your customer define value? What does your customer want or need that he or she is not now getting from someone else? Why does your potential customer choose to buy from your competitors? What would you have to do to get your prospects to switch to your products or services? And, who is your customer likely to be tomorrow, next year or in five years’ time?
4. Develop a competitive advantage or don’t compete. This is very important. The survival of your business depends on your ability to develop and maintain a meaningful competitive advantage. What does your company do really well? Which of your products or services is truly excellent? Your area of competitive advantage should always be defined by what your customers want, need and are willing to pay for. Every company that thrives has a specific competitive advantage that customers recognize and appreciate. Every company that gets into trouble has either lost its competitive advantage relative to competitors or never had one to begin with. Your ability to develop, maintain and protect your competitive advantage is an absolutely indispensable prerequisite for company growth and profitability. And because the market is changing so rapidly, you must continually ask yourself what your competitive advantage will be tomorrow, based on the way things are going today.
The major competitive advantages today are: faster, cheaper, or easier — or all three — combined with superb and timely customer service. All the most successful and most profitable companies provide these things. And so should you.
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Brian Tracy is the CEO of Brian Tracy International, which specializes in business training, and the author of the best-selling Psychology of Achievement. For more information, go to www.briantracy.com.