Leveraging Better Competition
Most people who know the least bit about me know I’m a huge University of Louisville athletics fan, and I’m also an avid cyclist. I’ve been a season ticket holder for UofL football and basketball for over ten years, and I’ve been involved in organized cycling for seven plus years. It is through these two interests in conjunction with a childhood of playing competitive baseball I have developed a strong appreciation for the value of solid competition. It has also taught me that in order to achieve improvement, you need to compete against those stronger/better than you.
This Thursday’s West Virginia versus UofL football game is a case study in the value of strong competition. Last year, Louisville (and others) joined the Big East Conference, and many said it was a conference undeserving of a BCS bowl bid and was a severely watered down football product. Nobody questioned the level of competition in basketball, but the losses of Miami, Boston College, and Virginia Tech in football was supposed to be too great a hurdle to climb in terms of bonafide respectability. Nobody was counting on Louisville and West Virginia raising the football bar to Top 5 levels so quickly. West Virginia comes in ranked #3; Louisville #5. The high level of play by both programs already has forced programs like Rutgers and Pittsburgh to improve, making the overall conference a pretty formidable league all of a sudden. Syracuse and Cincinnati have shown improvement but are likely a couple of years away from being real threats. UConn and South Florida aren’t pushovers necessarily, but they haven’t quite kept up with the others in the league. The league itself has moved ahead of traditional powerhouse leagues in the computer rankings because it is much stronger top to bottom than many envisioned. My belief is the top tier programs have forced the bottom tier to step it up or risk embarrassment and humiliation (a very strong motivator).
In cycling, there are five divisions in road racing (Categories 1-5 with 1 being strongest). I’m admittedly not in that strongest group (I raced Category 4 this past season), but I frequently train with some of the category 1-3 guys when improvement is my focus. Time constraints often prevent many of the members on our team from training the 20+ hours/week it requires to race at that top level. If I consistently train with my peer group, however, I’ll merely maintain my existing fitness levels, and I’m less likely to move up to a higher category. Our team (Team Louisville) has been debating various improvement training programs on our team message board the past few days so that’s why I’m including this in today’s post. Some have called for our team to strictly train together with no other teams involved over the winter, and others have suggested that we mix it up with stronger teams in order to improve our overall team. The problem with training just with our team is our team is composed of cyclists of very similar abilities and styles. To me, it’s not an endeavor that is going to improve our team or teach it anything new. That will come with training consistently with stronger riders and teams which brings me back to the value of stiff competition.
If you are looking to improve your business or any aspect of your life, look at businesses or individuals that are currently better than you at whatever it is you’re looking to improve upon. If you merely continue challenging yourself in a manner you are accustomed, you will succeed at developing a plateau not improvement. Sports provide several good examples of this concept in action, and the lessons should not be lost in the business world.
Is the Hurry REALLY Worth it?
Before I get into my little rant, I have to disclose that I’m a total Type A personality all the way so this may strike you as a bit of hypocrisy if you know me at all. I at least admitted to it so now I can get into my thoughts for the day.
The other day I was riding my bike alone on a nice country road that isn’t traveled a lot, but it does get some traffic during “normal” commuting hours. I ride this particular route quite a bit because it’s peaceful, near my house, and it’s reasonably challenging. Generally when I ride solo, I’m off in my own little world not harming a soul, but I guess I must have offended a couple of dump trucks because two took a swipe at me even though there was no traffic coming in the other direction. Luckily I wasn’t going very fast since I was climbing a fairly decent hill, and it was good that I maintained my “line” on the right of the road, or you might not be reading any of my thoughts.
Since I obviously made it through the ride unscathed, I began thinking about how we all seem to have become obsessed with being in a hurry. I’m guilty of it as much as the next person when I’m driving and riding the bike, but I guess I had one of those enlightening moments after the dump truck incidents.
What are we in such a hurry to get to? Would five seconds really kill someone to have to wait to pass someone exercising outdoors? Is it too much to ask that a big heavy dump truck give a cyclist a little room when there is zero traffic coming in the opposite direction? Does swerving at the cyclist accomplish anything? Is it worth all of that just to keep your hurry on? Judging by the two incidents the other day, I guess the “hurry” is more important than anything else at that particular moment.
The “microwave society” touches each of us every single day whether we realize it or not, but it’s getting a little stale to me. Don’t ask me why it suddenly hit me during the ride, but it made me take a little stock of my life and some of the ways I go about doing some things. Maybe the vision of the dump trucks wiping me off the earth drove home the message, but I think I got it—it’s not cool to always be in such a hurry that you could cause harm to others. That’s flat out unhealthy and dangerous so I’m going to be working on myself from here on to dial it back a notch and not be in such a hurry all the time. Look at it this way: if something negative happened to someone else as a result of my hurry, the consequences are likely to stop the hurry altogether for a long period of time.
That’s a different perspective isn’t it?
5 CEOs That Must Go
One of the toughest things for a CEO or business leader to handle is their own transition plan. When you’re in the everyday running of a business, it’s difficult to instinctively know when it’s time to get out of the way. To that end, we’ve come up with a list of five current CEOs that should transition themselves out of the head cheese role.
- Bob Nardelli—Home Depot. Good old Bob has managed to screw up one of the best home improvement retailers in the land by taking away customer incentive programs and overdoing cost cutting measures. High level management changes haven’t addressed the root of the problem—Nardelli! Is it any wonder Lowe’s has become the preferred home improvement retailer?
- Michael Cherkasky—Marsh McLennan. This guy has seemed to be out to lunch on repeated conference calls and doesn’t seem to understand the company’s business. Revenue has flattened the past three years, and Putnam has declined tremendously. It’s time for someone who understands the business model to take over the helm and get this company growing again.
- Meg Whitman—E-Bay. Meg is more concerned with crashing the upscale “benefit” (term used very loosely) circuit and being liked than she is capitalizing on E-Bay’s unique position in the market. They have virtually no competition, but they could do so much more with their cash than an undesirable acquisition of Skype which E-Bay vastly overpaid. That poor decision in itself is enough reason to make a change at the top.
- James Tobin—Boston Scientific. The Guidant purchase should seal this guy’s fate all by itself. Talk about an acquisition that made little sense and didn’t contribute to any corporate “synergies.” This bad deal was all created when Johnson & Johnson initially bid on Guidant then backed away once Boston Scientific decided to overbid in their haste to acquire another company. Guidant had all sorts of lawsuits surfacing as others were bidding so it’s a puzzle why both companies didn’t immediately retract their bids and walk away to leave Guidant to figure out their own legal problems. Kudos to J&J for ultimately outfoxing Boston Scientific and James Tobin!
- Terry Semel—Yahoo. Yahoo has been slow to act as Google continues to gain world dominance in the search arena. Yahoo should be strategizing for growth and considering buying smaller niche companies, but the management seems to be absent minded to doing anything. Message to Terry: sell the company to Microsoft and enjoy the proceeds.
There you have our short list of CEOs that ought to start their succession planning now if their companies are to return to the glory days of eye-popping growth.
Have comments? We’d love to hear from you.
Google Stomps On!
October 19, 2006—Wow!!! First Google reports another blowout quarter. Earlier the same day, Nielsen publishes search results for September 2006, and Google put the hammer to the competition there also. They garnered 50% search share which equates to 24% growth year over year (YOY). Talk about impressive numbers—the Google train obviously isn’t slowing! How does this impact the major search game?
Does this sound the warning siren to Microsoft that maybe they ought to reconsider buying out Yahoo? It makes perfect sense given the fact that Microsoft’s search results continue to fall (-12% YOY to a 9.23% share), and Yahoo isn’t keeping Google within an eyeshot either although they still maintain a nice share of the search market (23.4%; up 12% YOY). The two of them combined would give Google a little competition, and we, the consumer, would benefit from greater services and advancements in software along with online options as the companies battle it out in the marketplace. If not, Google is going to run off and hide.
Perhaps Yahoo (with a lot of cash to spare) will buy some smaller niche companies to make themselves even more attractive to Microsoft, but I don’t believe Microsoft will sit by idly while Yahoo postulates what to do next. It’s Microsoft’s move to make, and the time to act is now; not a year from now when their collective search share is even lower. Google is a formidable threat to Microsoft, and they aren’t going to take a breather just because they’ve hung up yet another blow out quarter financially and in search.
Yahoo has shown they can’t keep pace on their own so they’re going to need some help if they have any intention of ever catching Google. Google smells blood, and that signals the time to push harder; not back away. YouTube is likely just the beginning of an intriguing acquisition spree for the gang in Mountain View.
Microsoft would be wise to snatch up Yahoo right now after Yahoo posted a rather blah quarter earlier in the week which will shrink their market capitalization a little where Mr. Softy could acquire Yahoo at a “discount.” They didn’t like the idea of buying Yahoo at $29/share a couple months ago, but they should probably like it at $25.
Yahoo isn’t “dead.” It’s not like they’re stinking up the joint (they are still growing albeit much slower), and they do understand the search game which Microsoft hasn’t quite yet figured out. It seems to make a logical marriage at this stage of the game.
Bottom line: this is shaping up rather nicely as a good ole fashion duel that may take some time to determine the ultimate winner, but we’ll be anxiously monitoring the three “big dogs” as they ponder their next move in this high stakes search engine chess match. Stay tuned, the best is yet to come.
SEO Considerations
Things to Consider before Embarking on an SEO Initiative
1. How long have you been in business?
2. How long has your website been “live?”
3. How much traffic does your website generate per month?
4. Have you submitted your site to all of the major search engines?
- a. If so, when was this done?
5. Have you submitted your site to any directories?
- a. If so, which ones?
- b. Is your site still listed on those directories?
6. Who are some of your potential linking partners?
- a. Friends
- b. Co-workers
- c. Clients
- d. Similar businesses which aren’t competitors
- e. Business journals
- f. Local chambers
- g. Complimentary products/services
- h. Affiliates/distributors
- i. Suppliers
7. Do you currently distribute press releases about your business?
8. Do you currently distribute articles on topics related to your business?
- b. Do you have case studies or white papers you could share?
a. If not, do you know of anyone within your organization that may be a good candidate for writing these types of articles?
9. Does your company have a blog?
10. What other forms of advertising and marketing does your company utilize?
11. How much have you budgeted for a complete SEO Program?
- a. Is this budget specific to the SEO effort, or is it a percentage of your overall marketing budget?
12. What are your plans should an SEO program not produce immediate (1-3 month) results?
Please Note: Most SEO programs take a minimum of six months to begin to reap benefits. We suggest utilizing traditional marketing methods until the SEO program begins to produce the desired results. Backing out of an SEO program after 3 months will likely produce minimal results although it is not impossible to see results that quickly.
The Basics of SEO
What is SEO anyway?
Search Engine Optimization (SEO for short) is a highly involved, somewhat lengthy, process designed to elevate an internet website’s major search engine ranking and/or positioning. The major search engines (Google, Microsoft Network (MSN), and Yahoo) make up greater than 70% of search traffic on the internet. This is a common way for people to find others, information, companies, potential business partners, etc. by entering a “keyword” or search term. Typically, the searcher will seek information on their keyword or search term and click on the top results. Thus the higher a site ranks for a given keyword or search term, the better its chances of attracting more visitors to its site.
Why Should I Care about SEO?
If you run a business and have a web presence, don’t you want the most people possible knowing about that business? Wouldn’t it benefit you if your website was able to bring you new leads or develop new customers every day, 24 hours per day? Research has shown that nearly 95% of all search engine users rarely read past the first page of search results. Because of that, it behooves you to have your website on the first page of search results for specific keywords and terms.
Can’t I just Pay for a High Ranking?
No! Organic (or “free”) search listing rankings cannot be purchased. These are “earned” over time via links, content, keyword relevance, page and site descriptions, titles of pages, etc. You can pay for clicks to your website based on specific terms or keywords however these are separate results from the free results people commonly click.
What is Pay-Per-Click?
Pay-per-click is a form of internet advertising where you pay a certain amount for each “click” or “hit” to your website as a result of a person searching for a certain keyword or phrase.
What is Click Fraud?
Click fraud occurs when a person or automated computer script imitates a legitimate search for a keyword or phrase yet clicks on the pay-per-click result for the sole purpose of generating revenue for the search engine or affiliate.
What is a Linking Partner?
A linking partner is a website which provides a link to your site. Some will require a link on your site to theirs in return (a reciprocal link) while others will want to have a link on a third party’s site in exchange for the link to yours. Reciprocal links aren’t as valuable as unique one way links but the more links you have pointing to your site (link popularity), the more “important” the search engines will consider your site.
What is Page Rank?
Page Rank is Google’s proprietary algorithm for determining a site’s importance. It’s expressed as a value from 1-10 with 10 being the most important and most desirable. The algorithm was designed by Larry Page, Google’s co-founder. Page Rank is affected by things such as the number of links pointing to your website, and the amount of unique and relevant content on your website.
What is a Keyword?
A keyword is a typical word or phrase you’d expect people to use when searching for your site. That’s about as simple as we can explain it.
What is Keyword Density?
The number of keywords you use on a particular page in relation to the number of total words on that page. The more keywords you have peppered throughout the page and site, the better your site may rank for that particular term. You must be careful not to load a page with too many keywords, however—that is considered keyword “stuffing” or spamming and is frowned upon by the search engines.
What is a Sitemap?
A sitemap is basically an inventory listing of all of the pages on your site. It tells the search engines how to get around your site and also how many pages there are on your site. It can be made visible to your visitors, but it doesn’t have to be. Uploading an XML file directly to the search engines is a generally accepted best practice for optimizing your search engine rankings.
What is a Spider?
Search engines utilize small programs to surf and inventory sites all over the internet. These are called spiders, and they follow links from site to site to gather their inventory to report back to the search engine. They are also referred to as crawlers or bots from time to time.
What is a Meta Tag?
A meta tag is an HTML piece of code which provides information about that particular page or document. These don’t provide formatting information or any actionable code—they are there for the search engines to catalog your site and the pages contained on your site.
What is a Blog?
A blog (short for weblog) is a news or journal type of site which is frequently used more for opinionated type of entries and is typically updated frequently. It is intended for general consumption but has become a valuable tool for all types of users to spread information and awareness of their websites.
Why Should I Write Articles for my Website?
Articles are a great way to increase the amount of unique content on your site as it pertains to the keywords you desire to rank well. There are numerous websites that publish articles, and it is common practice for the authors to include a link in their by-line back to their website. This creates an inbound link to the author’s website which in turn increases its popularity. It’s also a good way to increase awareness aside from the linking benefits.
What are Directories?
Directories are databases containing listings to websites based on categories and sub-categories. Many of the search engines access directories to crawl their links to learn of new sites. Directories are an invaluable resource for search engines and can often serve to improve a site’s ranking depending upon how important the search engine weighs the directory in question. Directories may provide a link to your site often without requiring a return or reciprocal link on your site.
Increasing Your Company’s Competitive Intelligence
Perhaps you run a small business and have a belief that you simply don’t have the time to consistently monitor your competitors and your market as you should. Keeping the business afloat is paramount to you, and hiring additional staff to address this area isn’t an option at this juncture. Consultants aren’t an option either because they’re costly, or your company can’t sacrifice the time necessary to properly educate an outsider about your inner business workings. For any of these situations, there is an alternative if you truly want to keep tabs on your competitive landscape: have your current employees take responsibility.
Tasking your existing employees with developing competitive intelligence for small portions of the overall endeavor isn’t that time consuming, and it will allow them to feel like they are part of the strategic planning process. If your company has a sales or marketing department, these employees serve as the ideal candidates for undertaking competitive analyses. They should be familiar with the market to begin with and have contacts throughout the territory which may provide some inside information. To think your sales or marketing staff doesn’t communicate with a competitor or two is rather naïve—it happens, and it’s a reality you can use to your company’s advantage if it’s encouraged instead of frowned upon.
What kind of information do you need from each employee as it pertains to the competitive landscape? Capturing the following competitor data is a good start:
• Strengths
• Weaknesses
• How your company can take advantage of their weaknesses
• How your company can minimize potential threats from the competitor
• Product and service offerings & changes
• Pricing structure & fluctuations
• Plans to expand or consolidate operations
• Management & staffing changes
Most top sales and marketing reps will know this kind of stuff inside and out (on your strongest competitors) without having to do a ton of “homework,” but that doesn’t mean the information is being shared throughout the ranks. Often times it’s not, and that’s a contributing factor as to why there is typically a great divide between the top and bottom performers. This presents an opportunity to improve overall sales performance in addition to other benefits mentioned in this article.
Once you’ve gotten your employees to gather and analyze competitive data, how are you going to efficiently distribute it amongst the ranks? Why not host mandatory weekly strategic meetings to feed this information into your organization’s collective mindset? As co-workers demonstrate a solid understanding of a specific competitor or issue, they become the so-called defacto in-house “expert” on that competitor or issue which their co-workers will value. It will raise mutual respect levels and give employees the opportunity to develop better presentation and teaming skills. Other workers will follow suit, thus increasing your entire company’s competitive intelligence. Choose to focus on one competitor or issue per week, and the meetings won’t infringe too much upon the normal work day. The weekly strategic meetings could be conducted over lunch, as an internal lunch and learn, where you order food for all in attendance in exchange for their undivided attention. Yes, you’ll have to pay some money for food, but it’s cheaper than hiring additional staff, and it raises the bar across the board for your organization to become a more competitively focused entity.
To summarize, the resources are likely within your reach to gather and distribute competitive intelligence throughout your organization if you desire to make this important for your organization. Smaller companies simply don’t devote enough attention to expanding their competitive intellectual capital, and this is a creative way to get more people involved in your strategic efforts and team build while maintaining some cost control.
Roger Bauer is Founder and CEO of SMB Consulting, Inc., a Louisville, Kentucky based small business consulting firm specializing in strategic planning, web design, SEO, sales and marketing, and business analysis. To learn more, point your browser to Business Consulting. To contact a small business consultant today, e-mail info@smbconsultinginc.com.
Product Differentiation? Hardly.
By Roger Bauer
It struck me the other day during lunch at a local Moe’s Southwestern Grill that a new phenomenon has swept the restaurant landscape in the form of poor attempts to differentiate from the competition—renaming accepted terms of business with cutesy nicknames. This is readily visible in the faster food sector, and it’s becoming more prevalent as companies struggle to connect with the consumer in manners which create loyalty and/or preference.
Take Moe’s as a primary example. Personally, I believe they have a very good product to offer, but they’ve gone and out “cuted” themselves with ridiculously silly nicknames for their fare which only serve to confuse and frustrate the customer. It’s easy to see them thinking behind the scenes, but it’s a risky attempt at product differentiation. They’re in fierce competition with franchises such as Qdoba, Baja Fresh, Chipotle, LaBamba, Taco Bell, and Tijuana Flats, (plus many others) but those competitors don’t require a translator to order a simple burrito or taco. Try popping into one of those places one day or night to order a “Joey” or an “Alfredo Garcia.” You’ll get looked at like you have three heads (with good reason).
What would possess a franchise to resort to childish nicknames to try to differentiate themselves? It’s probably an executive’s poor excuse of a marketing concept designed to separate from the competition, but that’s not the type of separation that enables your concept to survive long term. It will ultimately separate them all right—the competition will eventually gain as the initial shtick gives way to annoyance and turns consumers off to the point they prefer the competition even with all other factors being relatively equal.
Sure, things look great for Moe’s presently, and the concept seems “fresh” today, but that can change on a dime without warning. Their current growth could be sapped with one false step because there is less room to wiggle when you’re attempting to retrain your customer base to conform to your concept. What happens if the consumer collectively says “I’m no longer in the mood for Moe?” Would being “cute” be overruled by a desire to becoming truly different (i.e. better)?
Don’t get me wrong, there are a lot of positives. Their restaurants are well laid out, the décor is modern, the lighting is appropriate, and the food is tasty not to mention reasonably priced. The physical atmosphere is hip and inviting. There are glaring negatives, too. The staff collectively insisting on yelling “Welcome to Moe’s!” at the top of their lungs as a new customer enters doesn’t make me want to setup shop for very long. I can’t wait to get out so I don’t have to hear that any more than I have to. I’d like a little peace and normalcy with my meal Moe, thanks.
Topping off the frustrating concept Moe’s obviously insists upon cramming down the consumer’s throat is the staff correcting the customer when ordering by the desired ingredients instead of its nickname. You’re not training me Moe, you’re supposed to be providing a quality and quick meal which I am going to ring your register for—don’t correct me, simply make the food, take the money, and let me eat in peace!
Moe’s is not alone in this feeble attempt at differentiation, and they won’t be the last, but the lesson to be learned is to keep customer service just that—customer service. The customer is paying so don’t believe you’re going to train the customer as long as the equation is structured that way. If you begin to pay people to come into your franchise or business, you’re well within your rights to try to train them to do business your way. Stick to doing business as the industry dictates until you develop a better way of doing things. Then, and only then, you will have a true differentiator. Simply renaming a common item or process doesn’t make you different—it makes you contrarian. Don’t confuse the two.
Roger Bauer is Founder and CEO of SMB Consulting, Inc., a Louisville, Kentucky based small business consulting firm specializing in strategic planning, web presence, internet marketing, SEO, technology, and business analysis. To learn more, point your browser to Business Consulting. To contact a small business consultant today, e-mail info@smbconsultinginc.com.
