Are you making this colossal mistake that most business owners make?

By: Dan Kennedy on: May 1st, 2012 18 Comments

During SuperConference, I gave a talk on the “Six Bullets You Should Never Leave Home Without”…

I could certainly add to this list, however if I were buying, building or starting a business today, these are the essential things I wouldn’t want to leave home without.

While I don’t have room to cover all six here, I do want to talk about one idea – because it’s a colossal mental mistake most business owners make.

In fact, it’s an ongoing fight I have with my clients—no matter the size of the company or the spending power.

What I’ve found is that when it comes to attracting a lead, a customer or a patient, they ask…
“What is the cheapest thing we can do to get customers?”

Be forewarned, if you think this way, you too are in need of a mind shift and MUST train yourself to think differently. If you don’t, you will deprive yourself of the opportunity to outspend every direct marketer in your market space thus limiting yourself in what you can do.

You see, by outspending your competitors, you can buy speed and growth and you can create discouragement to your competitors.

Here’s an example of what I mean…

A client in the martial arts arena called me a while back. A big competitor was trying to enter his market and he asked me what he should do.

My advice was to run billboards. My client said, “Billboards? I thought we tested those and they didn’t work in my market.”

My reply, “They don’t. But your competitor doesn’t know that. They’ll come to town, see your billboards everywhere, and then they’ll start running billboards too. You can stop after a couple of months and they will use up marketing money on a media that doesn’t work, causing discouragement.”

The marketer with the willingness to invest in acquiring customers—and even lose money on the first sale—with an effective strategy for maximizing customer value has an enormous competitive advantage. Including being able to use many media others cannot use.

Instead of asking “What is the cheapest thing I can do?”– The right question to ask is…
“How can I structure my business so I can do it more expensively than everyone else?”

or

“What can I do to outspend everyone else?”

Another advantage of outspending—you can give more value to a customer, which attracts more valuable customers, which gives you more money to spend per customer.

For example, you can offer better bonuses or send a shock and awe package.

The smartest marketers structure their business so they can outspend their competitors. Show up like no one else—spend the most you possibly can to get a new customer and you’ll attract more valuable customers which means you’ll minimize the number of units you need to sell to reach a million dollars.

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    ABOUT THE AUTHOR:

    Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    18 Responses

    1. Rod Johnson says:

      I agree with this blog in principal, the only caveat is that many people spend to much money on marketing that doesn’t work. So I would state it “outspend your competitors on marketing that has a good return”. To many people think that just spending is the answer.
      Rod

    2. Scott says:

      While this is true as far as it goes, I have not run into too many struggling businesses who could immediately profit from spending more money to get fewer — or no — clients. This is a strategy best suited to the already-dominating or very successful, close-to-dominating business. The truth is: most small businesses DO want and need as many stealth, cost and time-effective strategies they can get to build their business. If there are 5 ways to get new clients, each more expensive than the last, with the 5th being cost negative (a new client is worth $4,000 but you are spending $4500 to get them) it is a grave mistake to suggest that 5th strategy in any but the narrowest of business circumstances. Said in a more succinct way: IF YOU CAN AFFORD TO OUTSPEND ALL OF YOUR COMPETITORS, YOU ALREADY WON, AND IF YOU HAVEN’T, DOING SO IS THE FASTEST WAY TO BANKRUPTCY EVER DEVISED. I disagree that looking for the most cost effective ways to build your business is a sign of bad thinking: I think it is a sign of sanity.

    3. Very good advice indeed. Let’s face it, marketing is about creating a perception AND when competitors are convinced about the validity of something you’re doing, they will often follow.
      Cheers
      Garry

    4. andrew mazer says:

      I’ve been using these smart strategies to grow both my businesses. So glad I’m a gkic guy now.

    5. Your blog article makes perfect sense. I just enrolled in your 12 month course. I’m working on Magnetic Marketing as I write this. You are a truly valuable resource.

    6. Scott Martin says:

      I especially liked the advice during the info summit: mail like crazy.

    7. John kevin says:

      It’s a nice idea and strategy but for someone like me,i have business ideas but i don’t have the capital to start even the least.pls what do i need to do? Am almost 30 and there is nothing to show for it.

    8. FIOYE says:

      I have a small marketing communication Agency in Nigeria. Hope to grow big but have very limited finance base to invest. I need breakthrough tips to capture big clients and offer value added services.

      My major client is a paint manufacturing company who believe his comfrotable with th company’s status in the market. I need tips on how to boost this company while my agency also grow big alongside.

      Thank you

    9. It’s a difficult concept to get your head around especially in these austere times – although it could be our key to survival and growth.
      Thanks for your content.
      Declan

    10. Edwin Soler says:

      WOW, I never thought of that. Then again we see this strategy every four years during the elections. I believe that the last two standing candidates are not the two best options. They are the two smartest ones that made veryone else run out of cash. Without cash, they no longer have a voice. Brilliant!

    11. I would like to order some of Dan’s training materials. Where do I make those purchases?

    12. C. K. says:

      What should I do.

    13. Aaron says:

      Scott, you completely missed the point.

      The point is not about how to dump more money into your current business with no changes.

      It is “How can I structure my business so I can do it
      more expensively than everyone else?”.

      Your business must change to support the economics of higher spending, and in doing so, it will end up at a better place.

    14. Brendon Beck says:

      Good stuff as always Dan !

      Only thing, how does a newcomer get the money to spend on the marketing ? Is it the egg or the chicken that comes first ?

    15. Ken Stewart says:

      Stunning idea!I once attended a restaurant seminar and the speaker,20 yrs.experience,was explaining how to beat the big chains.He said,”Remember that all the chains are trying to give customers as little as possible,but the family owned restaurants,mom & pop,are trying to give customers as much as possible.” The late George Carlin said,”McD’s says they have ‘served billions’,but pushing a tray or handing someone a paper bag in not being served!” Did you ever receive Shock & Awe with your fries?

    16. This is not applicable to all businesses. A small business with a limited resources can’t outspend a competitor with more money to spend even unnecessary.

    17. chad says:

      Aside from the ability to outspend your competitors, in this case another large martial arts competitor, there is also an intimidation factor at play here. Any outside company coming into town may think twice about going against the local guy that by all appearances has a lock on the market and may move on to more cost effective locales where their marketing dollars don’t have to work so hard. I made this mistake with my business when there were only three of us. Now there is 21 and I’m going to have to market a lot harder than if I had gone for the appearance that I own this country, go poach on someone elses turf.

    18. That which is cheap is dear. – Spanish Proverb

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