The Power of 'Challenge'


by Dan Kennedy | March 27, 2011

"Ignore the conventional wisdom. If everybody else is doing it one way, there's a good chance you can find your niche by going in exactly the opposite direction." - Sam Walton

Every morning, the vast majority of entrepreneurs, business owners, salespeople, investors - literally everybody - gets up and goes about their business largely controlled by and operating under assumptions that, in many cases, have not been tested in a long time.

We assume the floor next to the bed to be solid and in place, so we get out of bed and stand up on it without first testing it by poking at it with a stick. This is a pretty good and safe assumption to make. Although, in Arizona where I lived for many years, it can be a bad although common assumption that your empty shoe is empty; it's a place scorpions like to go. Anyway, these mundane assumptions are one thing. The box says 'Corn Flakes', it's got corn flakes in it. But extending this same casualness toward far more important assumptions is a serious entrepreneurial, marketing, and financial mistake.

Consider the high cost of not testing price assumptions. One of my clients had a very firm belief about the maximum sum his clientele would pay for a particular service. At my persistent and vitriolic urging, he tested a price 30% higher - and found zero difference in prospect to customer conversions. But the bank account difference over the first 6 months was over $200,000.00. The money lost over the previous 24 months, $800,000.00. I have led many business people to surprising discoveries about the 'price elasticity' in their businesses.

Consider the really big opportunities. Sam Walton challenged a long-standing assumption held by all national retail chains, including J.C. Penney (his former employer), that there was no profits to be had by opening large general merchandise stores in outlying, secondary markets, due to high costs of transportation and warehousing. The result is Wal-Mart.

At one time, it was assumed that you needed 20% of the price to buy any real estate or property. Today "nothing down" and other creatively financed real estate, the new standard.

Consider the issue of how you make your money. I often point out that most business owners and salespeople are slaves to their own livelihoods, not masters. Today, many are slaves to their cell phones and e-mail, checking, responding, talking, being talked to without a moment's peace. Many people believe they must be so accessible. But my friend and client Tracy Tolleson is a mortgage broker who never takes or returns calls after 5:00 PM on weekdays or at all on weekends, yet over 70% of his business is new home loans from real estate agents - who do a lot of their selling nights and weekends. The assumption in his industry is that you must be always available to be successful. The assumption is wrong. I have motivated hundreds of people like Tracy, in different businesses where constant access is assumed essential, to limit access and reclaim their time and peace of mind.

Even consider assumptions about yourself. In Dr. Maxwell Maltz's works, beginning with the 30-million copy bestselling 'Psycho-Cybernetics', it's demonstrated that most people never challenge beliefs they form about themselves (aka. The self-image) from very early in life, even childhood. They once were introverted and shy and socially awkward, for example, so they assume they still are, always will be.

Far too often, 'assumptions' are accepted and expressed as 'facts.' So what is held as 'fact' about the business you are in or the product or service you sell, about the clients you deal with, about the prices common for your goods, etc. may not be facts at all. Only unchallenged assumptions. There is enormous power, potential and opportunity in challenging every single assumption that governs what you do, how you do it, how much you charge for it, and how much you make from it.

Dan S. Kennedy is the provocative, truth-telling author of thirteen business books; a serial, multi-millionaire entrepreneur; trusted marketing advisor, consultant and coach to hundreds of private clients running businesses from $1-million to $1-billion in size; and he influences well over 1-million independent business owners annually through his newsletters, tele-coaching programs, local Chapters and Kennedy Study Groups meeting in over 100 cities.

Glazer-Kenndey Insiders Circle, owned and operated by internationally known marketing personalities Dan Kennedy and Bill Glazer, is THE place where truly smart, progressive, aggressive entrepreneurs with a love for marketing, a sincere desire to get rich and richer (with no apologies for doing so), and an optimistic, forward-looking attitude, gather' to exchange and share timely information and "what's working today" strategies and examples. Get Bill Glazer's #1 Bestselling Book, "Outrageous Advertising" for FREE. Click here.

 

Chia-Li Chien, CFP®, CRPC, PMP; helps entrepreneurs to creating business value that transforms their world.  She is the author of Show Me The Money and columnist for WomenEntrepreneur.com & Fox Business online.   She is available for consulting, speaking engagements and workshops.  She can be reached at http://www.chialichien.com or jolly@chialichien.com.

 

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