Understanding the Economic Pyramid

UNDERSTANDING THE ECONOMIC PYRAMID

Embracing this model fully will do wonders for your business. It is hands down the best advice and lesson I received from Dan Kennedy in all the years being around him. Although Dan goes deep, deep into this topic, there isn’t enough room in this periodical for the thirty-something pages of notes I took over the three days that he taught.

If you can structure your entire business around this model, you’ll never again have to worry about a lack of clients or customers. There might be a lull between acquisitions from time to time, especially if you are limited as to how many clients you can support with your time and talent. And, the top tier of the market is not easy to crack without some insights from someone within that niche. But never fear, this model is, without a doubt, the salvation for any small business.

All prospects are not equal. The solopreneur massage therapist thinks the only way to make a living is to underprice herself/himself against all the other solopreneur massage therapists. If that’s the case, why did Massage Envy enter and dominate the market? They offer the same service but at premium prices.

This is the secret to making competition non-existent. Selling to the top 5% of the pyramid removes all doubt as to whether or not your prospect can afford your service. Why be a price provider? Remember Blockbuster, Border’s Books, Circuit City, and on and on? How about Walmart? They are a price provider and Amazon is now eating their lunch. If your business can be Amazon’ed, you’re in big trouble. Competing on price is a sure path to extinction. Focus on the top end of the market. There are those in every market niche that can afford anything they wish to acquire. Purchase a Timex or a Rolex? They both tell time. Your job is to provide enough value and serve that market.

The wonderful thing about working in the top 5% is that occasionally some up-creep occurs. I mean, once in a while, someone is reaching up into the next level of economics, and there is nothing wrong with that. If you’ve focused on the foundation, take the elevator up a few floors to the top of the pyramid. The air is fresher.