I’ve been reading the book, The Go-Giver, by Bob Burg and John David Mann. The book teaches lessons about a life philosophy that applies to business and other areas of life using a fictional narrative. In the book a businessman, Joe, tries to get the “trade secrets” of a wealthy man known as “The Chairman”. The Chairman turns out to be a very wealthy man who is happy to share his trade secrets with Joe. Joe is very surprised that the Chairman is willing to meet him on a Saturday morning and that he is willing to give him his “trade secrets” for free.
The first lesson that Joe learns is from a wealthy restaurateur to which the Chairman introduces him. This individual has built a chain of successful restaurants starting from a hotdog stand. The restaurateur explains to Joe that there were dozens of hotdog stands that people could have gone to on the streets of Manhattan. The reason he was successful was not because of what he was selling, but the value he gave to people who went to his stand. He would learn their names, learn about their families, and make them feel like they were close friends after a visit or two. They weren’t just getting a hotdog, they were getting an experience. The first secret was therefore to “Give more in value than you receive in payment.”
We’ve all heard the many stories about the demise of the Mom and Pop stores with the creation of Wal-Mart. After all, how could a small business compete with the buying power of the behemoth? They were underpriced and therefore could not survive, right?
If you’re idea of competing is to put stuff on the shelves and then sit behind a counter, waiting for people to bring you money, then, yes, you can’t compete. Things will cost less at Wal-Mart and yes, people will go there.
You need to give people value. You need to find out what people in your town are needing and have it ready and waiting. When they come into your store, you need to greet them and help them find what they’re looking for. You need to be knowledgable about your inventory – and have inventory that requires knowledge to buy and use – and be ready to give advice and assistance. You need to have items that, yes, cost a little more, but are made with great quality so that they will last long after the cheap items sold at Wal-Mart are gone. You need to save them time, provide them with things of value, and give them advice.
Are there people who will come into your store, use you to learn what they need to know, and then go to Wal-Mart and buy the item there instead? Yes. But there will also be a lot of people who will buy from you because they know they will get great service and an experience they just can’t get at a big box store.
And if you have a great store in your town that gives such service, maybe think twice before going to Wal-Mart instead. Remember that you vote with your wallet, and if you want the store to stay around, you need to be willing to pay for the value you’re given.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.