Takeaways from the book Category of One

This isn’t a strategy book. It doesn’t have fancy 2x2s and frameworks that you can pick up and build a deck with. But it is a tremendously useful collection of stories of timeless principles that remind people how to lead — in their own lives and organizations. As author Samual Johnson said, “People need to be reminded more often than they need to be instructed.”

List of Takeaways

  • Takeaway #1: A crisis is an opportunity
  • Takeaway #2: Success is a verb, not a place
  • Takeaway #3: Figure out who you are at heart
  • Takeaway #4: Do something brave to stand out
  • Takeaway #5: Prize the fundamentals
  • Takeaway #6: Know thy customer
  • Takeaway #7: Relationships over everything
  • Takeaway #8: Find the right people and trust them

Takeaway #1: A crisis is an opportunity

During times of crisis, your natural instinct is to clamp down and get into a defensive position. If you’re leading with courage and investing in the future while everyone else is curling into a call, the crisis will be on your side. Take the long view.

Whatever happens, it’s normal

“Whatever happens is normal. Not that whatever happens is always desirable or even acceptable, but that it’s almost always normal. A simple example of that would be having a flight canceled because of bad weather. Now this might wreck your schedule and cause you to have to completely rethink your plans, but, as a very, very frequent flyer, let me assure you that canceled flights are normal indeed.

This idea that” whatever happens is normal” is what separates those who handle change effectively from those who go ballistic at the slightest deviation from what they had expected.

Don’t let a crisis go to waste

“If you don’t recognize the existence of a recession, you’ll likely miss the extraordinary opportunity it presents. Don’t pretend that it doesn’t exist — use it.”

A period of crisis is how you can get ahead

“Marathon runners and long — distance bicycle racers will tell you that the moments of greatest opportunity are found in the uphill stages of the race. It’s during the uphill parts of the course that leads are most often either extended or lost. The best time to overtake your competition or to extend your lead is when the market is tough.”

“ Sometimes this business gets too easy. People get in it that don’t know what they’re doing because anybody can do it. Well, just anybody can’t do it in a market like this. What’s happening now is that God is giving our competition the opportunity to find another line of work. It’s our job to help them in that effort.”

“It’s been said that a recession is a reallocation of money from the scared to the bold.”

Learn what Hyundai did in the 2008–09 financial crisis

In a time of intense uncertainty and financial worry, what’s your tiebreaker? For Hyundai it was their Hyundai Assurance program, which lets buyers return their vehicles, at no cost and with no penalty to their credit rating, if they lose their job or income within a year. Did it work? Among all auto manufacturers sales in the United States in January 2009 fell 37 percent, the industry’s worst since 1963. Sales of the Hyundai Sonata surged 85 percent. After the initial success of the Hyundai Assurance program, they upped the ante with Hyundai Assurance Plus. The promotion for the program stated that since it is easier to find a job when you have a car, Hyundai was adding something extra: If a buyer lost their job, Hyundai would, for a limited time, make their payments for 3 months while they got back on their feet. Their web site said:” We’re all in this together, and we think it’ll be a little easier to get through it with a good set of wheels.”

Takeaway #2: Success is a verb, not a place

On both an individual level and a company level, you must constantly seek to understand how the definition of success has changed, especially if you consider yourself to be successful.

The same strategies that made you successful will be your downfall

What got you there will seldom keep you there… Once you get to 1,000, you’ve got to look at who you are. Some of the things that got you to 1,000 may not be the same things that get you to the next level.

If you’re successful, that means you know what used to work. If you’re successful, that means that you can compete and win in markets that no longer exist. They’re gone. The game starts over today and it will start over again tomorrow.

Movement is a stabilizing factor today. Companies today are like bicyclists who have their feet permanently strapped into the pedals.

When many companies begin to use the same differentiation tactics, the differentiation is no longer different. It quickly goes from difference to sameness. And at that point, none of the companies is a Category of One, they are only one in a big category. At that moment, decline begins.

Hustle when it seems to be least necessary

What you have to do is to introduce the next thing while what you are doing is at its peak of popularity, so that you continually replace what is declining with what is ascending.

The most successful are permanently dissatisfied

“Success is a moving target that causes a very positive version of permanent dissatisfaction. It is a form of dissatisfaction that feels good because you are driven by the fuel of knowing you can do better.”

Takeaway #3: Figure out who you are at heart

Knowing who you are → where you should go

If you don’t know where you’re going, pretty much any road will get you there.

Management is about how the organization works. Leadership is about why we’re doing it in the first place and what the point of it all is. Leadership is all about the story …

Your story is a simple, aspirational statement that galvanizes and unifies resources and that maximizes employee and customer engagement…

You can most successfully change what you’re doing and how you do it if you have a clear sense of who you are.

Use strong language to tell your story and inspire

Rev. Martin Luther King, Jr. didn’t rally thousands of people to the cause of civil rights with his” I Have a Strategic Plan” speech.

If you have strong feelings about your company, your people, your customers, and your work, then use strong language.

Examples:

  • “WE HATE BUREAUCRACY AND ALL THE NONSENSE THAT COMES WITH IT. WE WILL KILL RED TAPE WHEREVER WE FIND IT”
  • “If you’re as good as you’re going to be, then you can’t work here.” They could have said something about” constant improvement”
  • “Giving the gift of sight to those who have the least and need us the most.” (LensCrafter)

Commit to what you will NOT do

Often an extraordinary company stays focused because it has decided in advance what businesses it does not want to be in or what kinds of customers it does not want to work with.

Day-to-day decisions become much easier when you’ve given thought to what’s important and what you’re all about.

For example, you could go to the business meeting, but you’ve decided in advance that you will never again miss another of your daughter’s birthdays. Or you could accept that financially lucrative contract, but it would mean working with idiots, and you’ve decided in advance that you won’t work with idiots. You could hire the lone wolf top performer, but you’ve decided in advance that you want team players.

Be honest with yourself

So your people are better? Prove it. What do they do that your competition doesn’t do? How is your training better? What do your people do with customers that blows the competition away? Prove it. Because if you can prove it, you’ve got something incredible.

Takeaway #4: Do something brave to stand out

Words like “different” and “exceed” are used so much these days that they’ve lost their meaning. Think about how you can break the norms and what others expect of you. When you feel risk in your bug, that’s when you know you’re closer to being different.

Exceed expectations: not the same as meeting expectations

I placed a call with a credit card company… after my problem was solved, [the agent] said “Did your experience with us exceed your expectations today?” she asked. I thought for a moment and replied,” No. They didn’t.” I could almost hear her choking and gasping in surprise on the other end of the telephone.” Oh my. Mr. Calloway, I am so sorry. Please tell me what wasn’t satisfactory for you,” she said.” It was all perfectly satisfactory,” I replied.” You were friendly and efficient and professional. I’m very happy. You did your job well. You met my expectations. But you didn’t exceed them.”

Category of one: do something that NO ONE does

what happens when you drive your car into a Les Schwab parking lot. They all shout together, “They run to the car!” … What’s the big deal about running to the car? Just this. With the simple act of running to the car, Les Schwab Tires sends a powerful message to every customer. It is a message that says,” We want and appreciate your business.”

When people say, “Wow. No one else does that!” You go beyond price, product, and service to create a separate category in the minds of customers. You create a Category of One.

Don’t be afraid to stand out

Too often say,” But that’s not done in this business.” And that’s why you’re a commodity. While you explain to me why you just don’t send flowers to customers in your business, one of your competitors is probably sending flowers, or the creative equivalent of it, to one of your customers.

Constantly one-up yourself

I endeavor to create tiebreakers everywhere I can. Be extremely easy to work with: Tiebreaker Return calls and emails immediately; Tiebreaker Resolve issues in the favor of the client whenever possible; Tiebreaker Keep reimbursable expenses as low as possible; Tiebreaker If I’m not the right fit for a job, recommend a competitor who is.

Takeaway #5: Prize the fundamentals

It’s easy for companies to fall into the trap of chasing after the shiny object and believing that it’ll amaze customers into doing more business with them. Don’t underestimate the power of doing a job really, really well.

Lead with consistency

Great leaders are basically one-trick ponies. When it comes down to what really counts, they don’t have a lot of changing ideas. They stick with what’s important and they talk about it over and over and over. Remember, leaders remind us of who we are.

Commit to excellence

We spend so much time worrying about thinking outside the box that we may be overlooking the potential returns if we look inside the box for tiebreakers. Think about your customers’ basic expectations of you. I’m talking about what your customer expects in every transaction and in all aspects of his relationship with you. If you sell hamburgers, then the basic expectations might be for a good tasting hamburger, at a competitive price, delivered to you quickly, in a clean environment, by friendly, professional people. What if you chose one of those basic expectations to absolutely master. What if you, in the minds of the customers, owned that expectation

Master the basics before doing anything different

You want a wow factor? Stop it with the origami toilet paper and just get me checked in less than three minutes. Make sure the room is clean. Use light bulbs that are over 50 watts, so that I can see what I’m doing. Do the basics well, and I promise not only to be wowed, but to come back.

Sometimes being different is just goofy. First, make a good salad that people can actually eat. Forget the gimmicks and concentrate on good food.

Here’s the point. Southwest Airlines takes care of the customers’ basic expectations in terms of value, quality, and consistency. Then, and only then, will the birthday celebration [on the plane] make any difference at all. If the coffee at Starbucks isn’t consistently what the customer wants, then who cares about the oh — so — hip music playing in the store?

Takeaway #6: Know thy customer

Don’t focus on what you want to sell. Focus on whom you are selling to. The knowledge comes first, the closeness comes next.

Learn about your customer

The single most powerful sales tool, assuming that you are competitive at the commodity level, is to know more about the customer going in.

I have always remembered something taught by the great sales trainer Tom Hopkins who said that your first goal as a salesman is to have the customer” like you and trust you.” I tend to agree with this idea, but it’s not the starting point. Having the customer like and trust you is what happens when you get closer and establish an emotional connection. The process begins with knowing more about that customer.

My whole approach in the initial stages of the selling process. I never try and talk someone into doing business with me. I find out whether it makes sense for both of us to work together. If it does, fine. The sale takes place quite naturally. If it doesn’t, that’s also fine. It would be very damaging to my business if I were to try and make myself fit into a situation where I’m not right for the job. I do not want to be a square peg trying to fit into a round hole.

Being everything to everyone will waste everyone’s time

So many people say they don’t have the time to research and prepare. I say I don’t have the time to waste on sales calls and presentations with a low likelihood of turning into business.

[A friend’s friend] opened by giving me one concise sentence describing the kind of investment work that he did. He followed that statement with a question, asking me to describe my overall financial plan and approach to investing. I responded with my own simple statement about what I wanted to accomplish and how. He said,” Mr. Calloway, you’re on the right track for what you want to do. The type of investment that I handle wouldn’t be a good fit with your plan. It was nice to meet you. Thanks for your time.” Perfect. He was a professional who understood where he fit, and he had no desire to try and force himself into a situation where he didn’t fit. He didn’t waste my time or his by giving me a long pitch about how he was the answer to everybody’s problems. And because he had such respect for my time, he earned my appreciation. I have since referred three people to him because I felt that they might be a great fit with what he had to offer.

Takeaway #7: Relationships over everything

The more you learn about your customers over time, the more value you can add in unexpected ways, the stronger the emotional connection, and the more relevant your brand becomes.

Your brand is determined by your customer interactions

From the moment that I became their customer, however, their brand started from scratch. I didn’t care and wasn’t influenced by reputation anymore. I had little or no interest in their advertising. Once I became a customer, their brand was made up of every single interaction they had with me from that point on. This meant everything from the policy itself and whether I found it easy to understand, to the monthly bill and the ease with which we could read it, to the really powerful encounters, which were any that involved dealing with a real person in the company.

Personalization is selling to markets of one

His favorite restaurant was the one where they knew him. When I ask my audiences to name their favorite company and why, the most common reason is that the company knows them, calls them by name, remembers what they like, understands them, and can make recommendations based on that understanding

Sell to markets of one. Get close to your customers one at a time, not one group at a time. Extraordinary companies have always done business this way, and now we’ve reached the point that it’s fast becoming an entry-level requirement.

Loyalty is an emotional connection

You want to get to the point where when your customers are approached by a competitor with what could be considered a better deal at the commodity level of price, product quality, or service, that you transcend commodity and defy comparison in the mind of your customer. They simply can’t hear what your competitor is saying.

An emotional connection is created when, instead of sending a customer a generic mailing produced by a marketing company, you remember that she once expressed an interest in Japanese rock gardens, and you send her an article on the subject that you discovered while reading a magazine on a plane.

Deposit frequently into your goodwill bank account

[Three days after September 11th, I was scheduled to give two workshops at a conference and the luncheon speaker didn’t show up.] I told the organizers,” Look, I’m here, and I’m not going anywhere. You’ve already heard me speak this morning, and I’ve got two sessions to do for you this afternoon, but I want you to know that if you would like for me to, I’ll be more than happy to do the lunch speech at no extra charge. I know that your attendance was understandably way down because of the tragedy, and your budget for this meeting really took a hit from that.” I have never seen such a look of relief on a group of faces in my life. I did the speech, their appreciation was overwhelming, and an emotional connection was made. Was it smart business for me to do that? Sure. But more important, it was the right thing to do. It went way beyond business. This was a good group of people who needed some help, and I was easily able to give them that help. That’s what Jim Cathcart means when he says that business should be an act of friendship.

Takeaway #8: Find the right people and trust them

Find people who care about the same things your customers care about. Then trust them to form relationships with your customers, solve problems and do whatever they need to make them happy.

Hire people who are like your customers

[One sales manager gave an example of a great buying experience.] He is a competitive racer and had spent over $ 4,000 on a bicycle. When asked what was so great about the buying experience, he said that the salesman was the only person he knew who loved bicycles more than he did. This particular salesman, he said, would call periodically after the sale to check and see if the bicycle was working out as expected, and he kept up with his customers’ success in different races.

Empower your people to solve problems

As soon as you find that a customer has a problem, the official words to use to the customer are” What would you like me to do about that?” Then, simply do what the customer wants — you can’t go wrong. We trust you; you are empowered to take care of the problem. You have total support from every supplier and total support from Tractor Supply Company.

Checkout speed: We have a simple policy called” Three’s a Crowd.” As soon as there are more than three customers in line, our cashier is empowered to get on the public address system and get the second register open.

Learn Your Customer’s Names — There is nothing more compelling than saying,” Good Morning, Mr. Jones” and” Good Afternoon, Mrs. Anderson.” When you greet by name, customers will always choose your store first — that is a real competitive advantage.

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