Sunday, December 4, 2011

SMARTIES! (the candy, that is...)

I was eating dinner about a week ago and the oldest son brought up the topic of business competition and how it works.

This is a good one, because sometimes I wonder "how" some of my fellow funeral home competitors interpret the "how it works" side of business competition. I have come far in my life to do what I am doing. If anything, I think I have earned the right to enter the business market. I have served my country well, made it a point to be part of the community throughout my life, accepted my shortcomings and recognized my faults. So I feel quite justified in being one of those "privileged" individuals in life that has been fortunate enough to own his own business.

I was really quite stunned to sit across the table from a 10 year old and have him ask me a question about competition in a business. I tried to explain it to him as best as I could, well I hold no degree in business management, (I cant even spell half the time) I have spent most of my life in the military and since retirement I've done everything from over the road truck driving, drag line operator, fry cooker and bulldozer operator. So as you can see, owning, operating and managing a funeral home are probably the farthest thing from those previous jobs.

I tried to explain to him that business competition is not always about the prettiest or the fanciest.  I looked around the kitchen trying to figure out what I could possibly use to explain this to him. Silverware, toaster, sink, stove, cat dish, smarties.............SMARTIES!

There sitting on the top of the microwave was a bag of SMARTIES. I got up, walked over and picked it up, returned to the table. I took one out and talked with him......

"Son, tell me what you like about SMARTIES", He said they were good, simple and candy. (kids like candy) So I said to him, "lets say you have a dollar son, and you wanted some SMARTIES, well, in your neighborhood there was only one candy store that sold SMARTIES, and because they were the only candy store in the area that sold those SMARTIES, they started to sell all the kids in the neighborhood those SMARTIES at $1.00 each.  ($1.00 = 1 smarties) This is because all the kids really like SMARTIES, and would buy them all the time.

How would you like that? The boy told me "I would not". The boy was smart enough to also tell me he thought it was not fair that the store sold those SMARTIES for so much just because they were the only candy store in the neighborhood that sold them. He said that that kids really don't know of any other candy stores other than those that are close by, so they don't really know about looking elsewhere. (This boy is also smart enough to know that SMARTIES are not worth $1.00)

So one day a new candy store opens in the neighborhood, and its called "The Candy Store That Sells Candy for the Honest Price of Candy" or words to that effect. They sell SMARTIES for 33 cents. (that's 3 SMARTIES for $1.00)

At first, the candy store did not do to much business, they did not have the money to pay for allot of fancy advertising, put pretty lights all over the place or even open in a more "opulent" facility (fancy candy store) than like the other candy store in the neighborhood with the $1.00 SMARTIES. 

Well, eventually word got out, it's called word of mouth, all the kids told two kids that told two kids that told two kids.......... Now the new candy store is doing ok, BUT! The secret is..... the secret is that even though the candy store is doing good, they still sell those smarties for only 33 cents each. 

I then explained to him that to raise the price of your smarties after you have become popular is called "price gouging" and it is unethical and immoral .  Even if your philosophy is "Why sell one smarties for 33 cents when we can sell one SMARTIES for $1.00 and do the same amount of work and make three times as much". "A good businessman doesn't do that ", I told him. That's called unethical business practices.

Well, the candy store that was selling the smarties for $1.00 start advertising in the local paper.

Because we wear real nice candy store clothes!
and have nice bushes...
.99 cents
and our store has been selling smarties for a long, long time in your neighborhood...

Well, their add didn't work, All the time the new store continued with their simple add of...

For you and your kids!

You see, at the affordable candy store, the SMARTIES are so affordable that they don't need to be put on a big sale or go around to all the schools telling everyone how great we are, we let our prices and pleasant honest atitude speak for itself.

So I asked my boy, What if I was to sell you the SMARTIES wrapped in ribbons and bows and all kinds of fancy stuff? Would you buy the more expensive one at the other store?

No, why would I want spend more?

How about if I was to tell you that I was in the SMARTIES sales business, or bought a candy store that was selling smarties when I was  not even born, would you buy them then?


So I asked the boy, "So what would it take to get you to buy the more expensive SMARTIES?" 

Nothing, why would I want to spend money on something that I can get at the other store for less and has........ the same value?

I then explained to him, "That is very simple competition" the ability to sell to your client base at the worth of your product or service and not to insult them into thinking that "glitter, sparkle and color" is a necessity to get the job done. People are smarter than you think son, They know when the price of a "SMARTIE" is worth just that.........

The price of a SMARTIE..............

It's all so simple.

I learned something.  Kids are not stupid, nor are they corrupted by the marketing side of life. I guess we need to think more like kids......

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