Becoming a unique competitive force. Part 2

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The reason no one can win is that the service/product package has become a commodity. To the consumer, all offerings look much the same, with price the only difference. Once competition is on price, the priority goes to cost cutting. When cost cutting runs out of “fat” to cut, profits are on the skids, and hollowed-out, downsized companies have little vitality to invent, launch or repair strategic positions.

Does this mean that innovation is dangerous? Yes, but it is also necessary. Just last month this column championed creativity as our nova7award winners were showcased for their best innovations of 1996. The innovations that win in the long run are those that fit your unique strategy. If you can build on your ability to make a particular client market happier at your facility than any other, your innovation can take its place in an entire system of activities that preserve your unique advantages. Says Porter: “It is harder for a rival to match an array of interlocked activities than it is merely to imitate a particular sales-force approach, match a process technology, or replicate a set of product features.”

So, are you still aghast at the child care and aerobics advice? Thom told the experience of a typical women’s club that offered child care services for a small fee. It was not profitable, and posed some risk in having small children “loose” in the facility on their way to the care room. The few women who regularly used child care were contacted individually and offered extra months of membership in exchange for the discontinuing of the child care. Only four women left the club. The savings went to the bottom line every month. Free aerobics classes? What proportion of your members use them? How many would leave if you added to your cardiovascular equipment and discontinued classes? It’s worth checking out.

Should every club do this? No, there are exceptions. But every club should strive to become unique in its market, and not become a commodity that can be bought cheap.

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