7-Step Process for Discovering your X-Factor
by Andy Buyting on Jan 26 at 10:28 am
Image by striatic
Discovering your X-Factor will transform your business, guaranteed. What is an X-Factor? The X-Factor for your business is the one bottleneck or opportunity that if you could eliminate, change, or solve would give you a 7-10 times advantage over your competition.
Here are a few well known examples in the movie rental business that caused that industry to revolutionize itself three times over the past twenty-five years.
In the early days movie rental stores would purchase new movies for $100 each, and then rent them out to customers for $3-4 per night. This was effective, but had a challenge; buying movies for $100 each made it impossible to afford movie rental stores to buy numerous copies of new releases. The end result? New releases were constantly rented out.
Then along comes Blockbuster who solved the bottleneck by cutting a deal with the major movie producers. Instead of purchasing the movies for $100 each, Blockbuster would obtain as many copies as they needed to fill demand, and then give the producers a cut of the profits earned. This allowed Blockbuster to stock its shelves with a large amount of new releases, filling the demand by consumers.
A few years later, along comes Redbox. Redbox looked at the bottleneck in Blockbuster’s model, which was the high cost of rent and staff, and solved it. They installed movie dispensing machines in nearly 25,000 high traffic retail locations such as malls, grocery and department stores, stocking numerous copies of the latest DVD releases. Extremely low rent and labour costs, Redbox once again revolutionized the movie rental business.
As the digital age came upon us and movie downloads were possible, Netflix started its online subscription program. Customers pay only $8 a month and can download an unlimited number of movies through the internet to watch in their homes as they wish. Completely eliminating rent and labour costs, Netflix is now killing the older two business models and once again revolutionizing the movie rental industry.
So how can you determine what the X-Factor is in your business or industry? Here’s a quick 7-step process that will help you determine just that.
- Think about your industry from the customer’s perspective point of view. What are the parts of the industry that are just messed up? The things that keep the customer from getting what they want from the industry.
- List 5 bottlenecks your customers are forced to deal with. Then circle the one that seems most compelling.
- Think about your industry from the business operator’s point of view. What are the parts of the industry that are just messed up? The things that make your business seem difficult.
- List 5 bottlenecks you have to deal with as an operator. Then circle the one that seems most compelling.
- Think about the psychology of your customer. Are there bottlenecks that may be the result of your customers’ emotions? Could they be fearful or unsure of something?
- List 5 bottlenecks that could be caused by your customer’s psychology. Then circle the one that seems most compelling.
- Think about the biggest cost of your business. The bill you pay every month that dwarfs all of the other bills. Could this be a place to find your bottleneck? What if you could reduce this expense by a factor of 7-10X?
- List 5 bottlenecks that are associated with large expenses in your company. Then circle the one that seems most compelling.
- Now – What is the one bottleneck from the previous exercises that if you could eliminate, change, or solve would give you a 7-10X advantage over your competition?
- After you’ve quickly answered this question, ask yourself the question; Why? At least five times.
- From these series of ‘Why’s’, you should begin to come up with your bottleneck. If you do not think you have a bottleneck, then keep asking ‘Why?’ until you do.
- Finally take the most relevant ‘Why’ and put it into a question, then you’ll have your essential question for your question and the bottleneck that needs solving.
Now go out, solve your X-Factor and revolutionize your business and industry!
Good luck!
Share