Does Your Business Have A Pool?

by Pool Builders on 10-14-2012 in Articles

We could spend years dissecting what 'positioning' means. But I've never heard it explained quite so well as on the day that I sat beside a small Weber barbecue, braaing with a friend who teaches at a high school.

His school had just spent a small tidal wave of money refurbishing their pool, while a competing school, located a few kilometers away, had deemed their own too expensive and not worth the hassle. And so they had filled it in.

"They sealed their fate when they filled in their pool," my friend explained, turning the steak over thoughtfully. "They're in a death-spiral and they don't even know it. The reason our school spends so much money on that pool has nothing whatsoever to do with a love of sports. It has everything to do with positioning ourselves to attract the right customers."

My friend explained that parents who chose a school for their child based on the fact that it had a pool either had a pool at home (which meant that they were wealthy), or had been sending their child for swimming lessons (which meant that they were wealthy). The very fact that the school had a pool, in opposition to another school in the area that did not, meant they would attract higher-level clientele.

In a country where schools are obliged to accept children, even subsidising them when their parents can't afford the fees, attracting the kind of clients who can pay is critical.

Positioning, then, is best expressed in that famous line from Field of Dreams: "If you build it, they will come."

You Create Your Norm

Offer at a high level, and you will attract a high level of clientele. Fail to position yourself as a high-level offering, and you will get the proverbial rabble. The curious part is: you won't even realise it's happening. That's because the customers you interact with will teach you what kind of customers you interact with, until you come to believe that they are your only option.

Take the simple example of two car dealerships. One is high-end and has been selling cars priced in excess of a million Rand for the past ten years. They only know what it is like to deal with wealthy customers. The low-end dealership down the road, however, believes that the market is struggling and that there is no money available. Why? Because they constantly deal with people who are struggling and have no money available. In both cases, the initial positioning has created the reality.

What to do?

Here are four ways to raise your positioning:

1. Fire your low-paying, high-input clients

They are a drain on your time, they are not worth the financial reward, and most importantly their high visibility in your own consciousness will keep you believing that you operate at that level. See them often and they become your norm.

Instead of servicing this hopeless group, relinquish them to the entry-level operators. Own the top end of the market, the idyllic plains where your ideal clientele like to gamble about.

If you're having difficulty letting go, think about it this way: Doing one job for 30 coins is worth more than doing three jobs for 10 coins. How do we reach this seeming mathematical impossibility? Well, each job implies a certain amount of cost. If you do one job for 30 coins, you will incur one unit of cost. If you do three jobs for the same amount of money, you will be down by three units of cost. Doing less work for more money is exponentially more lucrative.

2. Dump the bricks and carry gold

What do you currently offer that is high-input on your part, but low return? Why are you offering it? Why spend your valuable time carrying bricks when, with the same effort, you could carry gold?

Are you scrambling to sustain the small profit margin part of your business? Perhaps it's time to dump it entirely and focus on the high-yield stuff. You don't have to be all things to all people. Rather be the thing that generates high income.

3. Increase your fees

Raise your fees. Raise your quality concurrently. Build the pool and not only can you charge more, but you'll attract the kind of clients who can afford it.

Try to position your fees in the middle-to-upper cost range of your industry. Never position yourself in the lower cost range. If you do, you become a commodity, which means that you are interchangeable, which is not clever positioning. If people shop for you based on price, you will, by definition, get the small profit margins from the low-end market, and you will live and die in price wars. You'll get the parents who don't care about pools.

Moreover, the longer you undercharge, the harder it will become remarkably difficult for you to raise your pricing later on.

4. Raise the value of your name

Appear regularly in the media, speak often at events, write for the industry publications, and you will raise the inherent value of your name and brand.

Positioning relies on public perception, and that is a perception that you can cultivate by design. Simply put, if you want to be on top, go out and be seen. Take your-excellence on tour. Position your name and your brand as the industry leader, and your offering will be worth more.

So, if you've been frustrated by the level of your customers and their capacity to sustain your business, ask yourself: are you serving the right customers? If not, take the time to build the pool. If you build it, they will come...

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