That's right.
Majority of businesses aren’t unique. They may be in a saturated niche simply doing things a little better.
Over the years we’ve been pleased to watch the industry grow with new entrants. We have also witnessed our competitors and others in the wider industry try and do things different. I get it, its hard to resist the magnet to pivot or trial something new.
It’s the same red flag on repeat.
How many times have you seen a company adding nothing more than dilution to their foundation or specialty?
Innovation can be a huge disruption and distraction to becoming a leader in your space.
I am not anti-innovation. I have written about the importance of speed and innovation in a business. Having a ‘quick strike’ mentality is a good strategy to disrupt competitors.
But consistent specialisation is such an underrated form of innovation.
In summary, don’t over complicate it.
If you are in a hyper-competitive field, all it might take to separate yourself from the rest is;
1. A fresh take on an existing business
2. Master your niche
3. Work hard and endure with patience
In crowded or saturated markets this can be the difference.
We operate a service-based company, in a sport that hasn’t really changed much in over 100 years. Its outcome based and we provide services to achieve those outcomes. We focus on children as the core market, and parents as consumers.
Our market is all kids, particularly beginners. We want kids moving, that’s it.
You may never be able to eliminate your competitors, and in our industry, we don’t want to. Sure, there’s a chance your competitors will be bigger, perhaps more profitable. Who cares?
If you stay focused on the outcome, business will eventually thrive despite the competitive conditions.
We always stay focused on our core customer who values directly from services we provide. Interestingly, our last member survey indicated 91% of our participants reported our club as their first ever club. Given this, there is no point trying to be creative and change our service for first time participants.
Many companies face constant pressure to innovate and adapt to stay ahead of competitors. Yet if they stayed focused for long enough, they would get ahead anyway. It’s like saying your company is saving money, instead of using money to expand. Pointless.
Market and consumer validation is enough. If a business model has legs, go with it.
I’m going to let you in on our company’s key point of difference.
Our competitive advantage is we became good at the thing's others find hard.
That. Is. It.
Here are a just few industry challenges we have become good at that contribute to our (current) boring secret recipe;
The industry is under resourced with staff shortages. This causes program bottlenecks and limitations on growth.
Correct, we don’t have an available pool of highly skilled and qualified coaches who specialise in delivering our service. From our current workforce of over 100, over 90% have no previous industry experience. We farm our people focusing on a fast-track program to develop high performing individuals. This includes ensuring a suitable number of benchwarmers to meet growth demands. Of course, there are periods of strain but if we continually search for talent we can get through pain points relatively quickly.
The consumer patterns have changed, and we cannot grow in this current climate.
This is one of the most frequent excuses I hear from the industry for low performance. It contradicts overall industry stats on increased participation. If you have the right recipe you can continue to grow. We are only weeks away from achieving 5,000 individual members throughout 2024 across only our first three clubs, with only one of the three reaching maturity. Impressively, we can achieve this milestone with no more than 1,100m2 of program space collectively across these three clubs. That's a lot of kids functioning and rotating perfectly within a small footprint.
Our marketing efforts don’t work anymore.
We have a dedicated specialised team who work on the ground in the community generating leads – in person. In fact, we have invested 64% of our total marketing spend on outreach lead generation. It’s boring, it’s hard, it’s not a job for everyone, but our competitors are not doing it and it’s improved our position this year substantially.
Notice how none of the three points of difference include anything related to operating with high service. That's because great service is not enough in a service-based industry. It definitely contributes to performance, but It's unlikely you choose your morning coffee shop because of the great service. Convenience is higher on the priority list than service. My point is there needs to be more.
Most of the time when someone is making progress, it’s not because they are necessarily better than you, more extraordinary, smarter, or extroverted. It’s because the things you are doing sometimes, they are doing daily for a long time.
Joel.
(I am the owner and founder of Rec Alley and have over 20 years of experience in the fitness and recreation industry. Our business Rec Alley is now one of the largest privately owned providers of children's gymnastics in the country with four clubs across South-West Sydney, including a new club at Rosehill, and a Kids Club service at Oran Park Podium. Follow along for regular updates including our franchise launch early 2025)
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