Avoiding Competition

A good strategy, therefore, should include finding ways to avoid competition.

Competition, by its very nature, means that there will be winners and losers--and in the competition for customers, those that fail to gain a competitive advantage in the market will ultimately fail altogether. A good strategy, therefore, should include finding ways to avoid competition.

Competition can be a destructive force for your organization. Consider two coffee shops that are situated next to one another, and that offer a similar standard of coffee and service. Both of the shops are suffering poor sales. To try to boost its performance one of the shops decides to offer a 10-percent discount on all orders. This is successful, and attracts more customs to the shop. In response, the second coffee shop introduces a 15-percent discount, in turn winning more of the local business, and putting pressure on the first shop to offer an even larger discount. This pattern of behavior is likely to ultimately lead to the destruction of both shops.

All markets go through this destructive competitive process, which leads--in time--to the failure of many competitors and the dominance of a very small number of the most competitive players.

ACTION POINT: Understand the destructive competitive process of price discounting.

Possible Characteristics of Good Customers

They provide valuable insight into areas that you are not familiar with

A good strategy aims to identify and target customers with characteristics that are beneficial for your organization. Here are four possible characteristics to consider.

• Financially beneficial. They provide you with regular profitable income: they are willing to pay a higher-than-average price' they give you a large volume of work so it improves your turnover figures; they pay promptly and it improves your cash flow.
• Reputation enhancing. Their custom enhances your reputation in the market. For example, if you write software for the financial services industry and a major Wall Street firm buys your software, other customers will assume that you must be good.
• Structure enhancing. They enable you to invest in new resources: for example, if a potential but not well-paying customer would provide work to fill 60 percent of an expensive new machines capacity, that customer's work would allow you to invest in a key new resource.
• Knowledge enhancing. They provide valuable insight into areas that you are not familiar with, such as a new market sector or a new country that would be strategically important for your organization.

ACTION POINT: Consider the benefits of a customer and how they may enhance your reputation, structure or market knowledge.

Attracting the Right Customers

Take time to think about the characteristics that would most benefit your organization.

In the early stages of a business, it is natural to say "yes" to all potential customers. You may be under financial pressures to earn income, and want to seek reassurances that you are doing a good job and that people want to work with you. However, some customers have characteristics that give them the potential to be much more beneficial to your organization that others.

Take time to think about the characteristics that would most benefit your organization. If you can identify customers with those characteristics and find ways to attract them, you will gain the double benefit of having the customers that you want and sending the least beneficial customers to your competitors, so that they waste their time, not yours.

Once you have determined the types of customers you want and don't want, target your marketing to your preferred groups. For example, if you have decided that large customers are more beneficial to your organization than small ones, don't place your advertisements in local community magazines--advertise in national media. Strategic marketing of your products to attract the right customers also extends to pricing: if you price your products very low, you may attract only the most cost-conscious customers, who are likely to argue over price.

ACTION POINT: Determine the types of customers that bring the most benefit to your organization.

Choosing Your Customers

A good strategy aims to identify and target customers with characteristics that are most beneficial to your organization.

If you take the time to review and analyze your customers, you will find that they are not equally valuable: some will produce strong, continuous, reliable forms of income, while others give you small pieces of complex work, argue over what you have done, and then are slow to pay you.

A good strategy aims to identify and target customers with characteristics that are most beneficial to your organization.

ACTION POINT: Regularly look through your customer list and ask yourself: what is the compelling reason for having this customer?

Gift of Wisdom: The Divine Perspective

Christ... the... wonderful wisdom of God.

1 Corinthians 1:24

The Gift of Wisdom provides us God's view of things, a kind of divine perspective on reality that penetrates through evens and perceives the divine presence and action at work, even in very tragic and painful situations. To see God in suffering is indeed a high level of the Gift of Wisdom. Some things are to be learned in this perspective that cannot be learned in any other way. The Gift of Wisdom is the source of the Beatitude of the Peacemakers, those who have established peace within themselves and who have ordered their own great variety of faculties into a unity that submits to God's direction and inspiration. They are also able to establish peace around them -- whether it be in their families, communities, or the workplace.

Blessed are the peacemakers, for they will be called children of God. Matthew 5:9