Investor's Business Daily, November 21, 2008, Friday

Copyright 2008 Investor's Business Daily, Inc.
All Rights Reserved

Investor's Business Daily

November 21, 2008, Friday
NATIONAL EDITION

HEADLINE: BE PERSISTENT AND WORK HARD Present Customers Value

BYLINE: SONJA CARBERRY

BODY:
5 Must firms cut prices to compete? Some experts argue that emphasizing value will win more customers in the long run. How?

** Rise above them. "Beyond Price" co-author Mary Kay Plantes says that in any industry, only one player can succeed on price. "The recession is only magnifying that issue," she told IBD.

Competitors who don't have the best bargains can earn customer loyalty by offering superior quality. "Always re-member that customers care about value," she said.

** Enhance the ride. Harley-Davidson doesn't just sell motorcycles. "They offer products that deepen the expe-rience for their customers," Plantes said. That means accessories, clothes and ride planning tools that create an entire lifestyle.

** Smooth the sale. Pennsylvania-based Springs Window Fashions calls itself the "best experience company" be-cause its mission is to take the hassle out of buying window blinds.

"They focus on giving the very best experience to the retail stores that are selling their product," Plantes said.

** Reframe your focus. Robert Finfrock, the other "Beyond Price"author, built his business selling precast concrete components used for parking garages. As industry competition increased, he realized general contractors were buying on price and availability, not value. So he transformed his firm into Finfrock Design-Manufacture-Construct.

By selling a start-to-finish solution directly to building owners, he increased his business tenfold.

"A competitor can copy a product, but it's hard for them to copy a whole business model," Plantes said. "That's conceptual work."

** Go to school. Identifying a business's advantage was one of 13 recession topics presented last month by instructors at Cornell's School of Industrial and Labor Relations.

School director Gene Boccialetti says the portfolio of special workshops was being developed when the economic downturn made it more pertinent. "This is the time to do intense learning programs throughout an organization," Boccialetti told IBD. "One thing we know is that pulling back on learning in a broad way is pretty dangerous."

** Take a page. From history. So says Andrew Razeghi, author of "Hope: How Triumphant Leaders Create the Future." He cites Henry Luce for launching Fortune magazine four months after the 1929 stock market crash. Luce bet that people would pay for his glossy inside look at the culture of business, so he charged $1 per issue -- an extravagant amount vs. the 5-cent Sunday edition of the New York Times.

Luce's gamble paid off. Fortune's circulation grew from 30,000 subscribers in 1930 to 460,000 in 1937.

"There are folks who see opportunity at those times, and that's certainly a good lesson for us now," Razeghi told IBD.

** Pursue star projects. For a more recent example, Razeghi points to Apple's iPhone. "The R&D (for the iPhone) was happening during the last recession in 2001," he said.
While other firms pulled back, Apple's Steve Jobs pushed to develop a top-notch product. Razeghi said the time is now to pursue that kind of "Hail Mary pass" project.

LOAD-DATE: November 20, 2008