Today I want to make an important plea to you. I want you to focus like a laser on making your business absolutely thrive over the next 12-months.

Yes, I know it’s 2020.

Yes, I’m very aware of the challenges.

I am also aware of the importance of looking to your future with the overriding goal of absolutely thriving.

When the marketplace is in turmoil, business owners set one of the following two broad targets. They either choose to survive (the vast majority) or they choose to thrive (a tiny minority).

We must choose our target wisely.

• Choosing to survive means you may just make it, if you achieve the target.
• Choosing to thrive means you’ll have an exceptional year, if you achieve the target.
• If you fail the target of survival, even by 1%, by default you don’t survive.
• If you fail the target of thriving, even by 25%, you can still have a better-than-average or average year.

Your target determines your focus. It sets the stage for the plans you make and the decisions you take. It shapes the conversations you have. It guides the opportunities you attract (and those you repel).

Your target also determines how you feel and how you make others feel about you and your business. It builds or erodes confidence.

• Survival mode is a source of anxiety. When we speak with an anxious business owner, we sense their worry and stress. We feel apprehensive about them and apprehension turns prospective customers away.
• Thrive mode is a source of excitement. When we speak with an excited business owner, we sense their energy and motivation. We feel positive about them. This is commercial gold dust. Especially today.

Given this, we all have a decision to make.

We can’t change the duration of the pandemic, or the even longer duration of the economic carnage it leaves us with. But we can choose the target we focus on.

And as I have seen with my 2020 client intake, it is possible to absolutely thrive.

The iPhone 12 was announced by Apple yesterday.

With the launch, came an extremely valuable marketing lesson.

The lesson?

Apple knows that just a tiny percentage of people who buy the new iPhone, actually need a new iPhone. Their current phone works perfectly fine for everything they need.

The vast majority buy a new iPhone, because they want to feel better. And they hope that buying a new iPhone is the answer.

The world’s most valuable company knows that people make purchasing decisions based on feelings, not logic. However, most small business owners market their business based on logic, not feelings.

And that’s a really, really bad idea.

Instead…

As a business owner, you need to do everything possible to magnify the positive feelings associated with buying your products or services. You need to let people know how enjoyable it is working with you. You need to explain how happy they’ll feel, owning your (whatever). This means fewer statistics and graphs, but more emphasis on positive emotions.

So ease up on the logic. Focus way more on feelings.

Because emotion drives motion (action).

And people need to take action, to buy from you or hire you.

Without knowing it, many business owners are engaged in a dangerous race to the bottom. In today’s post, I explain why this is almost always a terrible strategy for business owners. I also share some proven advice on how to avoid it happening to you.

Let’s go.

Race to the bottom: What does it mean?

In marketing, we tend to use the term to refer to making sales or winning new clients, based on being the cheapest option. This is most common among commodity businesses. However, the current economy is seeing a massive surge in price cutting and fee reductions. The ‘winner’ of the race to the bottom is the business that’s the cheapest / lowest priced at that time.

Some big businesses use their financial muscle to work successfully with low prices (or fees). Their buying power means that they have deals available to them, which smaller businesses simply can’t access. This allows larger businesses to compete in your marketplace, profitably, with extremely low prices.

However, small and medium-sized business owners tend to just lower their prices, as a way to make more sales or attract more clients. They then find their competitors do the same.

And the race to the bottom begins.

The prize?

The winner gets, wait for it… the privilege of building a business on a dangerous foundation of customers, who will leave them the moment a cheaper provider comes along.

It’s a high risk, low return strategy. It requires you to constantly look for ways to lower your overhead, cut corners and speed things up. All this, in an effort to attract the least loyal profile of customers in the world: Those who switch from provider to provider, looking for the lowest prices.

Why is such a high risk, low return strategy so popular with small business owners?

Simple.

They see it as an easy way to attract more customers or make more sales. However, a look at the medium and longer term picture shows why this usually goes horribly wrong.

Here’s what I’ve seen small business owners do over and over again.

Bob’s race to the bottom

Let’s take Bob the business owner as an example.

• Bob decides to lower his prices by 10%. He soon notices a slightly better sales conversion rate.
• So, he lowers prices by another 5%. And it improves sales even more.
• Some of Bob’s competitors decide to do the same.
• The race to the bottom is now on!
• Bob then needs to lower his prices by another (whatever)%, because his competitors are charging the same low prices as him. Bob’s prices are now rock bottom or very close to rock bottom.
• Bob continues to make some sales, BUT with very, very little profit.
• At this point, it’s a case of waiting for one of the following common scenarios.
• Scenario one: A well-funded competitor decides to sell at a loss for 6 / 12 months (to gain market share), Bob then has to try and survive on fewer and fewer low-profit sales. This is HUGE right now, as financially strong small business owners seek to crush their competitors during the pandemic.
• Scenario two: Bob’s overhead increases unexpectedly and he is forced to start increasing his prices, all those price sensitive customers he raced to win will now look for the NEW, cheapest provider.

It’s easy to attract customers by reducing your prices. However, it’s unsustainable. So, if this is something you are considering, please think again my friend. Consider the medium and longer-term consequences of winning the race to the bottom.

The marketplace we serve has changed.

What is very clear now, is that the COVID-19 pandemic has radically changed how our clients, customers and marketplace think. And we need to adapt our services and marketing accordingly, or slowly cease to be relevant to their new wants and needs.

Here are some of the most common changes.

• It’s changing their personal life. People are worried about elderly relatives, children, their jobs and their futures. They’re also unable to meet family and friends face-to-face. Some have unexpected, serious financial concerns. Others are dealing with unprecedented levels of stress.
• It’s changing their work life. Many people (and entire departments) now work from home. Others are unable to, and have the added worry of increased exposure to the virus. The whole dynamic of work has changed.
• It’s changing their company budgets. Some areas are no longer being invested in, whilst others are getting bumper investment.
• It’s changing their outlook. Things that people used to take for granted are now exceptionally important. And many of the things they thought were important aren’t important at all.
• It’s changing their comfort levels. Many who were previously of a generally happy persuasion, are now eagerly seeking comfort. And many who were previously assured, are now seeking assurance.

Everyone in business needs to factor these enormous changes into their planning. We need to review our products or services and either make them relevant to the landscape or replace them with relevant alternatives. With most economists now expecting things to remain volatile for at least the next 6 months, it’s not viable to just wait until our pre-pandemic plans are relevant again.

It’s also really important to review our marketing messages. What motivated our prospects this time last year, could have the opposite impact today. If it speaks to a carefree time, where your prospective customers were relatively confident about what the future held for them, it will be massively less effective today and possibly, fully ineffective soon.

Our world has changed. Our lives have changed. Our marketplace has changed. Our planning needs to reflect this.

Why do we start a business?

• It provides us with interesting puzzles to solve, which we find extremely compelling.
• We’re very well rewarded financially, allowing us to enjoy the lifestyle we want.
• We get to spend every day, working with wonderful clients or customers.
• Our working environment is a hive of creativity, fun and productivity.
• And it goes without saying that our plans for the future energize us.

Well, that’s how it should be

When we decide to start a business, we give ourselves a blank canvas. We get to choose the kind of work we do, the prices we charge, the place we work from and the clients we work with. In short, we construct every single element of our business, from the ground up.

Presented with this stunning opportunity, it’s a fact that most business owners end up seriously off-course.

This happens for a reason. Business owners are not stupid!

None of them set out to struggle or spin their wheels. Instead, they very slowly drift off course. It’s subtle. Little by little. Day by day. Until after a number of years, the business is not what its owner wants it to be.

That’s why it’s worth reminding yourself that your business can be whatever you decide you want it to be.

Those aren’t just words!

You can choose to work on rewarding projects, for great customers who value you. Or you can choose not to. You can choose to create compelling, motivating plans for your business, which energize you. Or you can choose not to.

So, how do you turn things around?

And what must you do, to finally own the business you’ve always wanted?

It starts with belief… and then a decision

You need to believe (on an intellectual and emotional level) that you deserve a better business, free from whatever limitations you now face. That’s because after a while, many business owners find themselves settling for less than they deserve. Most commonly, I find they lower their lifestyle goals, to accommodate the limitations of their business. You need to believe that by doing the right things correctly, you can transform your business into a spectacularly rewarding enterprise, on every level.

Then you need to decide.

You need to decide to do what’s required.

It means deciding to move from your current comfort zone, and make yourself comfortable in a kinder zone. A zone that’s more rewarding. A zone that provides for your needs and your wants. A zone that’s REALLY comfortable.

Is it worth it? Yes. Absolutely. One hundred percent!

How can I be so certain?

Simple.

I work every day with business owners who have the belief and made the decision. They decide where they want their business to be. We then look at their current position, and work together to make it happen. And the improvement, not only within their businesses, but their lives as a whole, is breathtaking.

You deserve the same, my friend.