By Charles Alvarez , Contributor, the Price of Business Show. * Sponsored
The key to business success is for you to achieve meaningful competitive advantage. As an entrepreneur, one of the advantages you can gain over your larger competitors is speed and personalization. Large companies are more likely to take customers for granted than small companies. For a small company, a single customer represents a far greater percentage of business than that same customer would represent for a larger company. Often, people will deal with you for no other reason than that you promise to satisfy them faster than anyone else. Your small size can actually be an advantage for your customer.
In this sense, speed can be your differentiating factor, your competitive advantage. Customers will pay a premium for speed. Often they will forego product or service quality as long as they can have it immediately. Just look at the multi-billion dollar success of fast food throughout the United States and throughout the world.
A Billion Dollars From Fast Delivery
Tom Monahan was a young man delivering pizzas at the University of Michigan in East Lansing when he made an important discovery. A customer would phone in and order a pizza. The order would be received, the pizza would be made by hand, baked, and boxed, and then he would deliver it about an hour after the order had been received. However, when he arrived with the pizza, most of his customers were impatient and angry. They hardly appreciated that the pizza was being delivered to their door. They just complained about how long it took to get a pizza once they had ordered it.
Tom Monahan had an insight that made him one of the richest men in the world, worth more than 1.8 billion dollars. It dawned on him, like a light bulb going off, that when people ordered a pizza, they were hungry, right now. And when they were hungry, speed was more important than quality.
He asked the people he was working for if there wasn’t some way that they could speed up pizza delivery. They told him that it was impossible to do it any faster. A pizza took a certain amount of time to prepare, especially with 30 different combinations and ingredients. They could not be made and delivered in less than an hour.
Tom Monahan decided that he could do it better. He sold his used car, rented a bankrupt pizza parlor with a pizza oven and began offering a limited number of the most popular pizzas, based on his experience. He promised delivery within 30 minutes or no charge. In no time at all, Dominos Pizza took off. It became one of the most successful fast food franchises in the history of the industry.
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