Business Coaching

5Cs Model - Five Levels of Competition

Today I introduce you to an idea I learnt in my MBA strategy course about the different levels of competitions - the 5 Cs Model of Competition.

It is easy to take competition for granted and not to recognise the subtle different forms that exist but in my How To Survive A Price War blog I showed that you could influence your competitors for better or worse.

The five Cs of Competition are:

• Collusion
• Co-operation
• Coexistence
  
• Competition
• Conflict

Collusion

This is when competitors work together to control the market supply and price by forming cartels or coming to an arrangement to fix prices.

Collusion is illegal in many countries including the UK, European Union and USA. Don't go there. If found guilty of price fixing, penalties are harsh. The airline industry has been found guilty in a number of cases (see Office of Fair Trade - £121.5 million penalty for price fixing on fuel charges as one example.)

Co-opetition

In co-opetition, competitors cooperate and work together in alliances and joint ventures but not in ways that distort the price customers pay.

The motor industry has seen companies to work together to develop new engines which none of the participants could do on their own.

There is a famous book Co-opetition that looks at the issue from a game theory perspective.

Co-existence
 
In coexistence, competitors don't have a formal agreement but recognise each other's space and don't look to compete.

A simple example may be two chains of discount shoe stores that compete in the same general area and will open in towns with a  population of 20,000 or more but won't open a competing store unless the population is over 100,000.

This recognises that competition can be a zero sum game where if one wins, the other loses.

It is one of the reasons why the idea of finding a special niche can work. Once you establish "ownership", any competitor recognises that you are established and has a choice - to ignore the niche or to challenge you in the niche.  

No formal agreement is required for co-existence to exist between competitors. Just common sense based around plentiful opportunities for making money.

The danger happens if profit opportunities dry up and one or more competitors are committed to further growth.

Competition

This is the normal situation as businesses compete head to head for customers.

Prices are kept in check by the other competitors but everyone behaves sensibly, recognising that a price war is bad for profit.

Conflict

In conflict, competitors fight toe to toe and slug it out for any and all customers.

The aim has moved to making short terms profits to hurting the competition and potentially either permanent weakening them or even driving them out of business.

Price is often the common weapon but mass marketing campaigns, product bonuses and higher levels of service can all be used to slug it out.

But just like collusion, conflict can be illegal.

While customers benefit from lower prices, predatory pricing is deemed anti-competitive. While legal definitions of just what predatory pricing vary - and can be difficult to prove - think of it as selling at a price below the variable cost of production.

Five Levels of Competition Model

So there we have the five levels of competition - collusion, co-opetition, coexistence, competition and conflict.

Can you use these ideas and make money by thinking more about your competition?

It is a mistake I see too often.

Businesses plan for growth but don't take their competition and how they are likely to react into account.

What Do You Think About The Five Levels of Competition?

As always I am eager to read what you think about the different levels of competition.

Do you have stories about how you have co-operated with a competitor in an alliance to create value for customers that you couldn't on your own?

Have you been caught in a conflict? I have and I've seen profits fall at an alarming rate as prices plummeted - each of us convinced that the other person started it and we were just defending our turf.

Infusionsoft CRM System Of The Marketing Gurus

Is it coincidence that more of the biggest name marketing and business gurus are turning their CRM system, email system, ecommerce system and affiliate marketing system over to Infusionsoft?

Infusionsoft CRM

Of course it isn't.

If you have a multi-million dollar marketing business, you want the best...and you can afford the best because the right investment in CRM software systems will make you much more money than it costs.

Which Marketing And Business Gurus Use The Infusion System CRM System?

•  Rich Schefren
   
  
• Jay Abraham
   
  
• Dan Kennedy
   
  
• Michael Gerber
   
  
• StomperNet
   
  
• Frank Kern
   
  
• John Carlton
   
  
• Ryan Deiss
   
  
• Yanik Silver
   
  
• Clayton Makepeace

If I looked I could probably find many more.

I know because Infusionsoft is the affiliate software I have become most familiar with using because of my connections with these marketing gurus.

Some use Infusionsoft more extensively than others but they all use Infusionsoft to manage the follow up and conversion of leads and just as importantly the revenue generation from the back end.

The Money Is In The Backend If You Can Your Systems To Integrate

You may have heard it before, but the back end - extra sales after the first purchase by a customer - is where the big money is.

But you need a fancy system to manage the relationships or your are stuck with manual analysis and manual intervention in the sales process.

The late Gary Halbert used the idea that some customers are like "porcupines in heat" (it seems that it only lasts about three hours a year and if they want baby porcupines, fast action is needed).

You some customers become irrationally responsive and want to buy everything they possibly can from a supplier. Look at the rush for MIchael Jackson music after his death. People have to have it and they have to have it NOW.

So if you have customers who are like porcupines in heat, their behaviour needs to be flagged up so that you can adjust your offers. And that's the kind of thing that Infusionsoft does.

But other customers are happy with what they have and they will resent being bombarded with offers. In fact they will resent it.

Some of these will include customers who will buy everything you offer...but in their time and not yours unless you come up with a slamdunk offer.

Infusionsoft CRM Review

I am not an Infusionsoft client so my review and thoughts are very much from the recipients side.

I see Infusionsoft as an affiliate marketer and I find it the easiest to use. Everything is very well laid out. I can see my sales, my ledger, the traffic statistics, the affiliate links and banners.

Believe it or not some of the other systems make this type of information hard to get at or don't deliver it at all.

If you sell with affiliates then you must do everything you can to make it easy. For many affiliates, it is the line of least resistance. If they have to make an effort, they won't do it.

Most of my Infusionsoft JVs run a good tidy ship and I know how much I have earned and I know how much I am getting paid. But any system, even one like Infusionsoft needs to be looked after otherwise you get garbage in gargabe out.

So for one of the Infusionsoft clients I have no idea how much they are paying me, when or how the payment that is received relates to the amount shown in the ledger. And when I query it, they don't seem to know either.

My other experience of Infusionsoft is as a purchaser so as well as promoting these people, I buy from them and the software handles well, even under the pressure of a big Internet launch where thousands are flooding to webpages at launch time.

Getting More Details Of Infusionsoft For Yourself

The big name clients are impressive, no doubt about it but you need to see the Infusionsoft CRM software for yourself.

Infusionsoft have tried to make this as easy as possible.

First they have a demo with a short video explaining about Infusionsoft and then you fill in a form to get a more extensive demo.

Infusionsoft CRM Demo

That puts you into the Infusionsoft CRM system and just like watching Jeff Walker and Frank Kern on product launches, you should watch the Infusionsoft process carefully to see what you can learn about effective follow-up.

The idea of an Infusionsoft demo at your convenience is nice but even better you can get hands on access to an Infusionsoft trial.

Infusionsoft CRM Trial

It is free - no charge - and you get 15 days to see for yourself how easy the Infusionsoft CRM is to use.

It is a great offer from Infusionsoft and shows their confidence in their CRM system since everyone knows that there is a learning curve involved with any new system.

More Details About The Infusionsoft CRM System

If you want more details about the Infusionsoft CRM system and how effective follow up of leads and building the backend can have a huge impact on sales, Infusion offer some excellent free reports.

Infusionsoft Reports

Have You Used Infusionsoft?

As always I am keen to encourage relevant comments so if you have used Infusionsoft or looked at it but choose another CRM system I will be very interested to read what you think.

Please just leave a comment but look out for the sneaky captcha to avoid spam.

Kolbe Fact Finder - Need To Know The Details

The Fact Finder is one of the four universal instincts used by people to creatively solve problems and is revealed by the Kolbe A Index.

When I took the Strengths Mastery Advantage assessment, I was revealed to have a strong bias as a fact finder.

How A Kolbe Fact Finder Works

Faced with a problem, my instinctive reaction is to want to know more about it and the possible solutions so that I can make an informed decision over what to do.

I rated an 8 on the Kolbe scale which shows that I am a strong Initiator on the fact finding dimension.

I view this as a strength in my role as a business coach/adviser/trainer since it keeps me searching for better ways to help businesses and makes sure that I understand the situation before I start prescribing a solution.

It also works well for me in my second career as an Internet marketer/reviewer of business improvement programs because I am prepared - no that should be eager - to get immersed in the detail in a way that many could not handle.

While I see this as an important strength the Kolbe Assessment doesn't recognise anything as bad, just a bad fit between your natural "doing style" and what you are trying to do.

A low Fact Finder score can be useful as it may help some see the big picture and take quick action while the hardcore fact finders are digging into the details and can even get caught in the analysis paralysis trap. Mind you "act in haste, repent at leisure" springs to mind as a ready justification for getting to the facts.

Kolbe A

Fact Finder is one of four instinctive paths we take.

The others are Follow Through (about systems and methods), Quick Start (about risk, innovation and change) and Implementer (about space, concepts and physical solutions).

What Causes Stress For Fact Finders?

One of the biggest reasons to know you natural strengths and preferred doing styles is that it can help you to avoid the stressful situations.

A low Fact Finder would hate to be given a big research project. The person would find the concept dull, the work boring and would struggle to handle the data and ideas that the research identifies.

A high Fact Finder enjoys looking at data and handling information. There is a feeling of power that comes from knowledge.

Stress happens when the high Fact Finder is asked or required to work without facts or to use "information" which may be unreliable or come from dubious sources.

I worked on a big project with a public company in the UK that had a big subsidiary in Europe which appeared to be out of control. Reports came in late, wrong and inconsistent but I was supposed to use this information to prepare reports for the main board of directors. Queries to the data only lead to more conflicting information or were ignored.

It tarnished everything I did on the garbage in garbage out principle and I found it extremely stressful and frustrating.

Adjusting Your Behaviour To Your Fact Finding Score

Are you fighting against yourself doing things that don't fit?

Or are you falling victim to the bad aspects of these instincts - analysis paralysis for strong Fact Finders or hasty decisions which prove costly for weak Fact Finders?

The person with strong Fact Finding instincts needs to play to the strength but at the same time recognise that there is a diminishing return on research as you find more stuff that just confirms what you already know rather than expanding your knowledge.

The weak Fact Finder needs to recognise the importance of working with the facts and to have people and systems that provide a limited number of key measures up-to-date so that there is more to back up decisions than gut feel.

But it starts by recognising your position on the Fact Finder continuum and you can do that by taking the Kolbe A assessment.

Strengths Mastery Advantage - this is Rich Schefren/Strategic Profits while label version of the Kolbe A Index assessment and it comes with some very helpful extra training to help you to interpret and apply the ideas. For a detailed assessment see Strengths Mastery Advantage Review
  

Formula Five Cash Booster Videos - Free

To mark the re-launch of Paul Lemberg's business coaching program Formula Five (marketed with Internet marketing giants StomperNet) there will be a series of free Formula Five Cash Booster Videos.

Formula Five Cash Booster Videos

Paul Lemberg first launched Formula Five in January 2009 and it was a huge success.

In fact the content from the free videos was a huge success and the amazing stories appear on the StomperNet Blog.

If you have a business and you have any doubts about signing up or spending the time watching the videos, you need to read how many people had a big increase in profits implementing one or two tactics from the ideas that Paul Lemberg is sharing with you for free to promote Formula Five.

Formula Five Cash Boosters

What Do You Get In The Formula Five Cash Booster Videos?

If you are still in doubt about signing up, I thought you would appreciate the teaser content for what you can learn from each Cash Booster video.

Formula Five Cash Booster Video 1

In Part 1 of your "FormulaFive Unleashed" Cash Booster Series, Paul Lemberg will personally introduce you to the Fundamental Foundation to Your FormulaFive experience.

• 2/3rds of business will FAIL in the first 5 years.  Learn the 8 main reasons it happens so YOU won't be a statistic.

• There are FIVE Essentials to a sustainably successful business.  Get these RIGHT, and you'll be poised to take advantage of:...

• The Universal "Law of Compounding" - Discover how small changes in the 5 Essential Areas can accumulate and seemingly turn into multiplying bundles of extra profit...

Formula Five Cash Booster Video 2

As you'll see in Part 2 of your "FormulaFive Unleashed" Cash Booster Series, Paul Lemberg will show you how simple changes in pricing can be the difference between your business "doing okay" and being a "raging success".

Ask yourself: "Are you SURE you're charging what you're *worth*?"

Even if you're not sure (and almost no one without the Formula is) - it won't matter.

No matter what you're charging now, a few quick applications of the Formula can make you answer confidently "No - I can charge a lot more now."

And best of all, you can sleep well at night because we're talking about adding actual concrete value to your products, services, and offers.

Formula Five Cash Booster Video 3

Part 3 of the "FormulaFive Unleashed" Cash Booster Series is going to capitalize on your positioning in the following ways:

• Get more leads coming to you every day.  Premium Pricing Plus Steady Leads = More Money.

• Make More Offers to your customers.  Monetize your list by making sure that you're providing your prospects with every opportunity they may want to take to give you more cash.

• Truly *Satisfy* your old and new customers alike so that whenever they are ready to spend more, they know who can provide them the best value.  (That's YOU).

Formula Five Cash Booster Video 4

Part 4 of the "FormulaFive Unleashed" Cash Booster series will do something that you may never have thought possible.

Do you feel like creating your own business has not given you the freedom and satisfaction you'd hoped?

Does working on your business feel like just another J.O.B.?

Quit that right now.

Paul Lemberg will share his personal strategy for systematizing all the boring, hard work you need to do every day.

Once you've got a system, you can hire someone to do it.  They don't need to be a highly paid expert - they just need to follow the instructions.

Is Formula Five As Good As They Say?

Paul Lemberg and StomperNet have an excellent small business profit improvement product in Formula Five and whilst I have written extensive reviews of Formula Five and the modules, the best way is to try it for yourself.

Just sign up to receive the Formula Five Cash Booster video course and you will see for yourself how you can increase profit.

In January many were able to buy the full Formula Five training from the extra profits that they made from acting on a few of these free tips.

So sign up for the Formula Five Cash Boosters Video course.     

NeuroMarketing: Marketing To The Old Brain

Neuromarketing and the work that Patrick Renvoise and Christopher Morin are doing is fascinating as it links marketing to neuroscience - the study of the brain.

I will be writing a review of their book, "NeuroMarketing: Understanding the Buy Buttons in Your Customer's Brain" on my Business Book Review blog soon but I am discovered about finding this webinar video.

I very much see NeuroMarketing as the link between the tested direct response marketing and the brand building style of marketing you see from the huge consumer products companies.

You may have heard that people buy emotionally and then justify emotionally.

There is truth in that but Neuromarketing talks about the three levels of the brain:

• The logical brain
   
  
• The emotional brain
   
  
• The old brain

The stuff I've read in the past that delved into the psychology of buying hasn't distinguished between the second and third - the emotional brain and the old brain.

In fact it was the MD of the PROBIZ accountants network Feisal Nahaboo who introduced me to the concept of the old brain or lower brain and how through its fight or flight mechanism it caused people to jump away from marketing because of the perceived threat.

Neuromarketing is more about hitting the buying triggers and getting people to buy and it is the old brain which is key.   

The basic idea remains the same - decisions are made unconsciously and are then rationalised consciously..

I won't explain much more because the video from Christophe Morin does it for me as it takes you through the ideas.

    

Neuromarketing makes a lot of sense to me and if you are interested in marketing psychology and tapping into the buying buttons or triggers, you need to watch this video although you'll want to then buy the Neuromarketing book.

The book goes into more details than the video but this video also includes some new stuff about Neuromarketing.

I guess that's because this is such a new area of study that can move forward quickly.

Did you notice Christophe Morin's title?

Chief Pain Officer - but it's not as scary as it sounds.

Just a reminder that moving away from pain and problems is often a bigger motivator than moving towards some gain because it creates stronger empathy (when done in a nurturing way) and gets the customer's emotions raised to a higher level.

What Do Clients Want From A Coaching Program

It's a simple question with a wide range of answers "What do clients want from a coaching program?"

It is so easy to wear the expert hat and think "I know what potential coaching clients want", design a program and then discover that nobody wanted your version of the "better mousetrap".

I would certainly appreciate your thoughts on what clients want from a business coaching program - both in terms of process and result so please leave a comment and share your views.

Mark Joyner Is Asking The Question

Internet entrepreneur and marketing guru Mark Joyner (author of The Irresistible Offer and Mind Control Marketing and other books) is asking that question before the launch of the Simpleology coaching program.

On the Simpleology blog - Two Major Announcements (June 14 2009) Mark announced the intention to launch the Simpleology coaching program on July 1st 2009.

He doesn't give many details but does ask an interesting question

"If I could waive a magic wand and get the ultimate coaching program for changing my life and keeping me on track, it would look like _______." I was learning the A, B, C's...

The Answers: What Do Clients Want From Coaching

It is not a substitute for asking your own clients and prospects but to date there have been 308 comments so for any coach, I recommend that you take the time and read what is written.

I'd also recommend that you join Simpleology so you get to see the entire marketing campaign for the Simpleology coaching.

Here are some of the early highlights although you need to look at the Simpleology blog since different types of coaches will take different things from it

"Focus on practical steps to help me organize and attain goals."

"If you truly want to blow the minds of your clients - then offering a program that takes a client from idea to achieving the results agreed upon at the beginning of the program between the coach and the client - to be achieved NO MATTER what it takes."

"The actual program is flexible enough to be streamlined so that my strengths are fully utilised and the way forward to improve my weaknesses is found and simply implemented."

"People need a loving kick in the pants. They get excited about starting new programs and then resistance creeps in. Then they avoid coaching because it reminds them of what they know they should be doing, but don't want to be told about. The most important change happens WITHIN."

Your Thoughts

I will appreciate comments you make on this blog about what you would want from a coaching program.

In my experience, people want many different things and come to coaching with different expectations because the word covers such a broad range of activities.    

Business Problems: Diagnosing What Is Wrong

Business problems can stop you having the successful business you want for yourself, your family and for your employees.

The symptoms of the problem are usually very clear - one or more of:

• Few customers
   
  
• Low prices
   
  
• Losing money
   
  
• Unhappy workforce
   
  
• Frustrated entrepreneur

But can you fix the symptoms or do you need to fix the underlying problem?

It is much more effective to diagnose the business problem or the problems that are causing the visible symptoms? While the symptoms are obvious, the cause is often not so obvious.

This is why I love the cover of The Final Chapter by Rich Schefren.

 

Rich Schefren Formula For Success

Success equals

• Vision +
   
• Strengths +
   
• Passions +
   
  
• Resources +
   
  
• Alliance Partners +
   
  
• Powerful Tactics +
   
  
• Action Plan  

Put simply:

• You need to know where you are going
   
  
• You need to be playing to your strengths
   
  
• You need to have the passion to push through the difficult times with real commitment
   
  
• You need to have the resources - money, equipment and people - to do what you need to do
   
  
• You need to recognise that you are stronger working with partners than trying to do it on your own, to help you market and deliver your products and services
   
  
• You need to use powerful tactics to deliver your strategy for achieving your vision
   
  
• You need to coordinate everything happening with an action plan to make sure that everything that needs to happen does happen.

This makes a lot of sense to me and I find that it makes a great diagnosis tool.

Rich Schefren doesn't just give you the formula for business success but he gives you a business problem symptom sorter which is a very useful problem diagnostic tool.

Working Back From Symptom To Problem

If any of these success factors are missing, then business becomes more difficult because the missing element causes business problems.

The genius of the diagram is that it allows you to work back from the symptom to the problem so that you can see what is potentially missing.

Take a look at these business problems

• Confusion - you're not sure where the business is going or what you should be doing - this indicates that the key problem is that Vision is missing from your business. When you clarify your vision, the confusion will disappear.
   
  
• Anxiety - you are finding it very stressful working in your business and you are not getting the enjoyment you should - disappointing results and the clear evidence of an undiagnosed business problem will cause stress but it will be made worse if you are not playing to your strengths. Doing things that you are not good at causes difficulties and problems while things are easy when you work in your areas of strength.
   
  
• Unmotivated - you have a direction but the problem is, it doesn't stir you into action - this is because passion is missing. You have chosen a business or a vision which you thought would make you money but it doesn't excite you. If you can find the passion, for what the business does for you, your family or your customers, you will feel re-energised.
   
  
• Frustration - things are not happening as fast as you want or as well as you want. This can often be traced back to the problem that you and the business lack resources - perhaps it's money or you are trying to use unsuitable equipment or to get the wrong people who don't have the skills and aptitudes necessary to do the work.
   
  
• Limited Success - things are OK but the problem is you never seem to get to take-off speed and build the business you know you could. This is probably because you haven't established strong relationships with people and businesses who can help you while also gaining from your success.
   
  
• Sluggish Results - again things are OK but performance should be better. You have the partners in place but still things aren't happening because the underlying business problem is that you lack powerful tactics. You have opportunities to sell and upsell but you fail to take them.
   
  
• False Starts - things start off well but then problems start happening and you lose control. In this situation, you will find that better action plans, showing what will be done, when and by whom will lead to more concerted effort and longer lasting success.

Using The Business Problem Diagnosis

I like this problem analysis because it can work back from the symptom when so many business health checks dive straight into what is happening in the business.

Did you find yourself thinking that you suffer from more than one symptom of business problems?

That's what I have found when I have used these ideas with businesses that are not performing as well as their owners would like and often the entrepreneur will agree that things can be improved.

You can get a copy of the Final Chapter and a few other resources from Rich Schefren if you sign up at the Profit Vault. They are written to help Internet entrepreneurs and to promote an Internet coaching program called the Business Growth System

Solving these problems are important elements of my own Eight Pillars of Business Prosperity coaching model.

What Do You Think?

Has this analysis of business problems given you new insights and "Aha" moments?

If so I encourage you to leave a comment to share your thoughts and experiences.

Price Wars: How To Survive A Price War

I have experienced a number of price wars and seen the effect of others.

Each price war has been extremely damaging and the best way to survive a price war is do you best to stop it starting in the first place although sometimes, competitors are so stupid and behave so irrationally that a price war is inevitable.

Unfortunately the recession is increasing pressure on businesses to keep sales high and owners and managers can feel forced into cutting prices.

Why Do Price Wars Start?

Price wars start because:

• The market is declining and firms are fighting for a larger share of a smaller cake; or
   
  
• One (or more) firms have very aggressive growth objectives
   
  
• The price war can start by accident.

Aggressive competitors believe that they can make more money by:

• Trying to force competitors out of business because they have major cost advantages or can withstand the losses for a longer period. Once competitors leave, the aggressor believes they will have a dominant position in the market which allows them to control prices.
   
  
• They don’t understand how their own cost/volume/profit relationship works and may underestimate the cost of the product or service.
   
  
• They don't realise that if they lower prices, their competitors are likely to find out what is happening and respond. All too often strategies are considered in isolation without thinking about how competitors will react. 

Price Wars Can Start By Accident

Competitors' actions are misunderstood.

Perhaps there is a temporary special offer from one competitor to turn slow moving stock into much needed cash which escalates into a series of tit-for-tat price reductions as the other competitors respond to what they perceive as an aggressive action. 

Or fluctuations in market demand are not understood and firms think that competitors must be stealing their business. I have written an extensive review of the beer game and how systems thinking can help you interpret fluctuations in demand.

There is also the risk that price wars can start because of manipulation by buyers and fear based naivety of suppliers. A buyer gains by paying a lower price so an unscrupulous buyer can:

• Exaggerate the offer from a competitor by outright lying - Smith & Jones have offered us a price of £2.50 per unit when you are charging £3.30 (when their best price is actually £2.95)
   
  
• Mislead by missing out key terms - Smith & Jones have offered us a price of £2.95 when you are charging £3.30 (but they want us to order and take immediate delivery of 10,000 units - their price for the 1,000 units that you provide us with is £3.35)

There Is Usually No Winner In A Price War
 
There are often no winners in a price war.

A price war can destroy the profitability of an industry for many years hurting every single competitor. Many industries have found that it is much easier to cut prices than it is to increase them again afterwards.

Even customers may lose out if a product is treated as a price based commodity when there are really valuable differences in either the product or the service. As struggling competitors withdraw from the market, either voluntarily of through bankruptcy and liquidation, customers are left with less choice.

What You Can't Do To Survive A Price War

You can’t reach an agreement with competitors to fix prices to particular customers.

Cartels are illegal in the European Union, the US and many other countries.

What You Can Do To Survive A Price War

• Emphasise the extra quality or service of your offering – don’t allow the customer to that the product or service is a commodity and  that all competitive products are equal so that price is all that matters

• Remind the customer of the risks in taking a low cost option

• Create a low cost, lower value alternative product of your own

• Work together to take costs out of the transactions. Recognise the difference between saving the customer money and your cutting your prices.

• Lower prices through a rebate scheme that rewards extra volume and not just promises of extra volume.
  

• Re-align your price lists. Supermarkets have low prices on the staple products like bread but make their margin on the extras that people buy. Can you use loss leaders to keep customers who will buy premium priced items out of convenience.
  

• Make it difficult to compare prices – e.g. mobile phone tariffs - although makes it difficult to win customers on price as well.

The Risks Of Buying From The Cheapest Competitor

Price is often used as an excuse for changing suppliers but it can be a disguise a service problem or general dissatisfaction with the customer supplier relationship.

Alternatively the customer may take for granted the customer service you provide and believe that is the industry norm when your service and dissatisfaction with that of your competitors wins you business elsewhere.

So make sure that the customer is aware of the risks of buying from a cheaper competitor:

• What will the customer lose that he takes for granted from you?

• What short cuts/cost savings must the competitor have made to sell at this price profitability? How will this impact on the customer?

• Why is the competitor so desperate to get extra business? Is this a last desperate attempt to win enough volume to stave off financial collapse and if that happens, where will that leave the customer.

Signalling To Competitors

Collusion is illegal and the punishments are high.

But that doesn't mean that there can't be some kind of communication with competitors - perhaps with the market in general via the trade press, through customers (although you have to be careful that the true message is passed on) and through trade associations.

It's what business strategists call signalling - making clear what is happening in the market and what you are doing so that the competitors are better informed and not left to make up their own minds.

Some of this signalling is counter-intuitive but it has to be to fight the idea that "more sales equals more profit".

If the market is in severe decline, like the housing and car markets at the moment in the UK, it makes it much easier for business owners to understand why their sales volumes are down by 30%.

The market leader needs to make sure that they are not caught up in a bravado exercise for their own public relations - the industry is down a long way but we are selling more. That kind of statement signals to competitors that their volume is being "stolen".

The same education is needed to explain the impact of the Beer Game and how de-stocking along the supply change exaggerates the impact of demand changes at the other end.

And if you are having a sale to sell off excess stocks, signal the fact that the sale is limited in quantity and duration. It may cause competitors some short term pain but it won't last long.

If there is a danger of a price war, the trade can be educated on the dangers of cutting price and the devastating effect on profit of just moving the purchase volumes around.

The aim of effective signalling is to stop the price war happening.

The Signals Of An Aggressive Competitor

Sometimes a competitor will signal an aggressive move. "It is our intention to grow market share to 40% and we will do whatever is necessary to get it there."

This type of signal gives competitors a problem and a price war may be inevitable.

Is the threat credible? Does the competitor have the financial muscle to back up the intention?

Will the expansion stop at 40% or will it then be 50%, then 60%...?

If you are going to have to fight, it  may be better to fight the battle early.

What will it take to stop the competitor and is the fight worthwhile or should the business withdraw from the market?

It is better to withdraw early than suffer huge losses and being forced out.

Disciplining The Aggressor In the Price War

Some price wars are fought in public. The market trader selling vegetables knows when his competitor has cut prices and can react immediately. The other party sees the reaction and has a choice of cutting price again, matching the price or increasing the price hoping the competitor will follow again.

Other price wars are in private.

The first the incumbent supplier may know that an aggressor is taking action is when the orders stop or a phone call comes in asking for a new competitive quote.

The choice is to match the lower price or to hold. Keep the business at a lower price, then your competitor has not gained but you have lost profit - and the customer may now be very marginal.

But do you leave it there, or should you try to rap the competitor across the knuckles?

It's another signalling issue.

If you know the industry well, you can go to your competitors customers - not all of them but enough to get the point across - and either

• Submit a lower price yourself and threaten the established competitor's volume.
   
  
• Discover the prices offered by your competitor and make their customers aware that the firm is aggressively offering new customers deals which may be far better than given to existing customers.
  

It's one thing to try to increase profit by getting extra profit by winning your competitors customers on price but it is another to see the profit on the established business damaged.

What Are Your Thoughts On Price Wars?

Have you found yourself caught in a price war?

What happened and how did you get out of it?

Action Coach: World's Leading Business Coaching Franchise

I just thought that I would check my Google ranking for "business coaching" and I saw a PR release for Action Coach saying:

"ActionCOACH is the world’s number one business coaching and executive coaching firm, with more than 1,000 offices in 26 countries."

I always smile when I see this claim and it sure sounds impressive doesn't it?

But is it true?

I'm not having a pop at Action Coach who are getting free PR and a plug for their franchise on my blog.

There is no denying that:

• Action Coach provide business coaching - although I am surprised by the claim on their website that Brad Sugars Brad Sugars and Action Coach started the business coaching industry.
   
  
• Or that Action Coach are international
   
  
• Or that there are hundreds of Action Coaches scattered around the world.

It's the use of the word "firm" that surprises me.

The Merriam Webster dictionary describes a firm as

1. the name or title under which a company transacts business   
    
   
2. a partnership of two or more persons that is not recognized as a legal person distinct from the members composing it
    
   
3. a business unit or enterprise

Action Coach is the brand name for a franchise of self employed business coaches.

So it's not a company and it's not a partnership.

Is it a business unit or enterprise? Yes it sells business coaching franchises and trains people to be business coaches.

Yes I think it's that word "firm" that always makes me smile because really ActionCOACH is a brand - and that's where the big value comes from.

When you are building the brand, firm sounds so much better than franchise.

Franchise tells you that if you are a client, you are dealing with someone who has paid money to use the brand, is governed by the franchisor but isn't really part of the master organisation in a way that a subsidiary would be.

Interesting isn't it how different words can present different pictures.

What do you think? Do you think that ActionCOACH is a "firm"?

As I said earlier, I am not criticising Action Coach for the claim.

As a business coaching franchise, I have no doubt that they are the biggest when you consider "offices" which I guess is business-speak for franchisees. I can't think of another franchise or firm that comes close to that number of business coaches.

Becoming An Action Coach Franchisee

I paid special note to the PR release today because I have been seeing adverts recruiting ActionCOACH franchisees in The Sunday Times recently saying the same thing.

And I know that I get readers hitting this blog with "How do I become a business coach" type searches so I thought it was about time I gave you a chance to learn about the ActionCoach franchise and to share your thoughts.

ActionCOACH give some information about becoming a franchisee on their website but I found this summary for UK coaches to be much more informative.

It's not clear how old the pdf is but fee rates between £200 and £500 per hour and net profit of £100,000 to £250,000 are impressive numbers for an investment of £57,625. I also understand from other sources that there is a monthly fixed levy of about £1,500 - a substantial amount of things don't go as well as you hope.

What did surprise me was the amount of training.

A ten day intensive course in Las Vegas that covers everything needed to learn followed by a 12 week kick start training course as you set up the practice plus regular extra training calls.

It doesn't sound too much effort to build a big income does it and you can see why so many are attracted into the ActionCOACH franchise.

If you want to become a business coach, then do take a look at Action COACH. After all as the world's number 1 business coaching firm, you need to understand them, even if they only become a competitor.

What Do You Think About ActionCOACH?

I would be interested to see what you think about ActionCOACH so please leave a comment if:

• You are an ActionCOACH franchisee
   
  
• A former Action Coach franchisee
   
  
• Someone thinking about becoming a business coach who has consider the ActionCoach franchise
   
  
• An ActionCOACH client  

I have been planning to feature the business coaching franchises on my Business Coaching blog to help people who are considering becoming a business coach and who are wondering whether it is worth buying into a coaching franchise.

ActionCOACH are the first because they are the world's biggest business coaching franchise and are the obvious place to start.

As always do your due diligence when you consider spending this much money.

I have heard some very good things about Action Coach but I also hear stories of coaches who lost a lot of money because they weren't really suited to life as a business coaching franchisee. I know it wouldn't suit me because I can't follow other people's rules and procedures.

Talk to other franchisees with different lengths of membership, search the internet - there are some horror stories - but most of all, be clear on your own motivation, strengths and commitment.

Just as a business coach cannot make the client successful if the client won't follow advice, the the coaching franchisor can't create successful franchisees if the proven system isn't followed.   

Books by Brad Sugars

Can you judge the quality of ActionCOACH by the quality of the books?

I hope not but you can read my reviews and see that I wasn't impressed, either as marketing tools or information products.

The Business Coach

Instant Cashflow

Successful Franchising

Instant Team Building

Instant Referrals     

Vocal Power Speaking With Authority Roger Love

Earlier this year I held my first webinar and I thought my voice sounded slight and wimpy so I thought "I must do something". A bit of research led me to Roger Love, vocal coach to the stars including Tony Robbins and I bought his CD training set called Vocal Power from Nightingale Conant.

Vocal Power

I started listening to it this afternoon.

Interesting.

The way you sound is a major factor in the impression you create on people, right from the start no matter whether you are talking to one or one thousand.

I'm a big chap - about 6' 4" and eighteen stone (250 pounds) and while I don't want a booming Brian Blessed voice, I have felt that my voice lacks gravitas.

I've only heard CD1 of Vocal Power so far but I can see that vocal power and authority has a lot to do with breathing.

Take A Big Breath

Go on, just take a big breath as if you were going to have a holding your breath contest with a friend.

Did you chest puff out and your shoulders rise?

Mine did but it seems that is wrong.

We can get into bad habits on our breathing and that sabotages our ability to speak powerfully.

It wasn't really something that I'd thought about. Let's face it, you just breathe without having to think about it, thank goodness.

What you need to be doing is:

• Breathing in through your nose and not your mouth (which should be shut)
  

• Your stomach (not chest) should push out as you breath in as your diaphragm expands. You can test it by putting your hand on your tummy which should go out as you breathe in and in as you breathe out.
  

I had to record a soundbite - which you can do with Sound Recorder on Windows XP and assess yourself.

Plenty of breathing exercises to do each day.

Only CD 1 so far but it has certainly made me think about what I'm doing. It's a bit spooky to start thinking about how you are breathing.

I just wish there had been some advice on whether I should spend a few days repeating the exercises before moving on to CD 2. I'm not sure what I'm going to do at the moment.

Vocal Power by Roger Love

Has anyone else used Vocal Power?

I am interested to hear how you found it.