Right now I’m squished into a tiny airplane seat on my way to Mexico City. In the empty seat next to me, I’ve got a copy of Good To Great, one of the best business books I’ve ever read.
Good To Great looks at 11 companies that were way more successful than their competitors for 15 years or more. The book is all about what they did differently from most companies.
Because Good To Great is based on actual data and real-world results instead of theory, it says new and interesting stuff. (Not the same old bullshit you get from other business books.)
And because Good To Great is based on real-world results instead of theory, you know that its new and interesting stuff is actually worth listening to.
Here’s my favorite lesson from Good To Great. A lot of the companies in the book lost their entire business model, and they had to scramble to figure out what they should sell.
One of the companies, Pitney Bowes, lost its government-granted monopoly on postage machines. Another, realized it couldn’t compete with the big paper manufacturers, so it sold off its paper business (its biggest cash cow at the time).
How did they decide what businesses to get into? They all used the same 3 criteria. If you’re deciding what sort of offers you should sell, these 3 criteria might help you:
1. What can you be the best in the world at?
The 11 companies in Good To Great realized that if they couldn’t the #1 or #2 player in a market, they should exit that market. (And today this is commonly accepted by all of corporate America.)
So for example, if you’re not Coca-Cola or Pepsi, and you don’t think you can beat Coca-Cola or Pepsi, don’t make soda.
What if you’re not the best in the world at what you do? Then niche down until you are the best in the world.
So for example, if you want to make soda, don’t make cheap coke. Make one really good high-end soda that’s unlike anything that Coca-Cola or Pepsi makes.
Or if you want to be a business coach, you probably won’t be the best business coach in the world. But maybe you can be the best in the world at teaching Christian mothers to start freelancing from home, or teaching shy, awkward software entrepreneurs to market themselves.
And you don’t have to be the best in the world right now. You just have to see a realistic path to becoming the best in the world.
Once you’re the best in the world, the right customers will find you.
2. What are you passionate about?
The companies in Good To Great all sold something that their employees actually cared about.
This is kind of important for corporations, but it’s super important when you run your own coaching biz. If you don’t love what you do, then you’ll look forward to quitting instead of giving 100% every day.
You’ll burn out way faster, and your clients will see that you’re half-assing it.
So pick something you love doing.
3. What makes you money?
Each one of the 11 companies in Good To Great obsessed over optimizing one specific metric.
For Walgreens, it was profit per customer visit. When somebody walked into Walgreens, Walgreens asked, how do we get them to spend as much money as possible? (That’s why they started selling stuff like snacks, instead of just filling people’s prescriptions.)
For Gillette, it was profit per customer. So they made high-quality razor blades and then tried to sell as many of them as they could.
What metric should your business focus on?
Maybe it’s profit per paying customer. This is a good metric to focus on if you're trying to upsell more stuff. When someone buys one of your programs, how often can you sell them something higher-ticket down the road?
Or maybe it’s profit per audience member. When someone discovers you and gets into your orbit, how good are you at closing them and turning them into a paying customer?
Maybe it’s not a profit based metric at all. YouTube’s metric was watch time. They obsessed over figuring out ways to get people to spend more time watching YouTube, even at the cost of stuff like views and even revenue.
The right metric for your business is gonna depend on who your audience is and what your business model is. Your job is to figure out what it is, then work your butt off to grow it.
I talk with a lot of coaches. The #1 thing that makes them money is creating content. The more content they make, the more their audience grows to trust them, and the more sales they make.
The #2 thing that makes them money is sending marketing emails. The more times they ask for the sale, the more sales they make.
If you want to create more content and send more emails, and you don’t have the time to do it yourself, check this out: