Business

Stay out of The Product-First Trap

03.1 Product-First Image

Many companies are not able to grow in today's marketplace because they are stuck in The Product-First Trap. People and companies fall into this trap when they think first and talk first about their products and services. When asked what they do, they say: I am a dentist. I am a travel agent. Or we make tennis shoes. This seems like a natural thing to say. After all, that's what they do. But this product-first thinking is a trap for three primary reasons.

One, when you describe your business in this product-first manner, it is likely that hundreds, if not thousands of other companies are describing themselves in the same way. That means your company doesn't stand out because your prospects are hearing the same story from hundreds of your competitors.

Two, if you tell a product-first story, your prospects will think you are a salesperson. They will think you are trying sell them your product or service. This will make them turn away because they don't want to hear your sales pitch. This sales-aversion will make it harder for you to meet new prospects and develop relationships with them.

Thirdly, when you finally acknowledge the first and second problem, and try to come up with a new way to differentiate yourself, you can't do it because your thinking keeps going back to your core product or service. Your mindset doesn't allow you to think of new big ideas to differentiate yourself. That's why it is called a trap. Your product-first mindset doesn't enable you to break away from the other competitors in your industry.

For example, Apple was stuck in The Product-First Trap until 1999. Before that time, they were a small company that sold its computers to a small group of devoted customers. They thought of themselves as a computer company. But then in 1999, they changed their mindset, and broke out of product-first thinking. That's when they began inventing new big ideas such as the iPod, iTunes, the iPhone and the iPad. Today, as one of the most successful companies in the world, they are no longer just a computer company. They are in a category of their own. They achieved this distinction not because they are smarter or more creative than other companies, but because they changed their product-first mindset and adopted a new and better business model, what we call The Relationship-First Formula™ (see next concept).


Why you need a BIG Idea

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To stand out from your competition, attract more higher-quality customers, and make more money, you need to package a BIG Idea. something new, better, and different. Not just any idea, a really BIG Idea. It’s not enough to be different, you have to be a lot different.

Think about it this way. Let’s say the temperature in your room is 72 degrees Fahrenheit, and someone turns up the heat to 73 degrees. That is a different temperature, but do you notice it? Probably not. There isn’t enough of a difference.

Many business people make this mistake. They may do something different, but it’s only a little bit different. They change the color of their product or they offer improved credit terms. But these additions and changes aren’t enough. To the untrained eye, they still look like the other companies. But what if someone increased the temperature to 90 degrees? Would you notice the difference? Of course you would. It would be a lot hotter! You’d start sweating, you’d take off your sweater and say: “Hey, who turned up the temperature? It’s boiling in here.”

So that’s what you need to do. If you want people to notice you, you need to turn up the heat, and do something really different. That’s what we call a BIG Idea.

To get you thinking big, it is helpful to imagine that you are charging ten times more than what you are charging now. When you do this, your mind starts coming up with new ideas, and breaks away from conventional thinking. That's what Starbucks did. Back in 1990, they envisioned charging $5.00 for a cup of coffee. But the people in their industry thought they were crazy. Coffee in those days was only 50 cents a cup. Why, they scoffed, would anyone pay $5.00? The key is to realize that at that time the people at Starbucks didn't know either. But they had a dream, and they set out to make it a reality. With their $5.00 vision in mind, they packaged a completely new coffee shop experience, and in the process, revolutionized their industry. So the question is: What BIG Idea would you need to package in order to get your customers to pay 10 times more?

BishopBIGIdeas.com


Simplify your business by focusing on your #1 Customer Type

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Most companies are held back from greater success because they have too many different kinds of customers or clients. When they started their company, they did business with anybody who would buy their products or services. Over time they accumulated many different kinds of customers. While this may be seen as a good thing, it is also a problem because it is complicated to work with so many different kinds of customers. For each type of customer you need different marketing tools and activities, different products and services, and different processes. This fragmentation makes it hard to unify your business under a single brand, message, process and product line, and that inhibits growth.

To simplify your business, and make more money with less work, focus on one type of customer. For example, we only work with small and medium size companies. We don't work with large corporations or government agencies. This single focus has made us experts in the needs of these customers, has simplified our business, and has made our company much more profitable.

Using this model, you have one type of customer and an unlimited potential number of products and services geared to that single customer type. This is in stark contrast to a typical product-first company that has only one type of product and many different types of customers.

Many companies resist this strategy because they don't want to give up any potential customers. But that is not a problem. To implement this idea, you don't have to give up any customers. If a non-ideal prospect walks in the door, you can still work with them if you want. But you don't seek out any new customers that don't match your #1 customer profile.

As you get more and more customers that match your #1 customer type profile, you realize that you don't really want to have any other kinds of customers. You feel more focused, and your business is easier to run. It is then easier to let go of those other kinds of customers.

One key note: It is very important that you choose the right type of customer to focus on. Make your selection after considerable thought. It is the most important decision you will make in your business.

 

Learn more at BishopBigIdeas.com