Really? There are benefits to being second place? Didn’t Ricky Bobby’s father say that “second place is the first loser?” Even Vince Lombardi is quoted as saying, “Sure, winning isn’t everything; it’s the only thing.” Right? So you may be asking, “So, Patrick, how can you do a Valuetainment episode titled, “The Benefits of Being Second Place in Business?”
You’ll understand what I’m talking about here as I get into my message. It’s very important for you to realize that before Apple became first place, they were last or second place for a long time. It takes anyone a long time to be first. And this is a very important strategy for you to pay attention to as an entrepreneur building your business because there’s a lot of power behind it.
The Benefits of Being Second Place in Business
Hertz Vs. Avis
I want to explain the power of being second place in business by telling you a story. In the rental car business, there are two companies we've all heard about. You have Hertz, and you have Avis. These guys rent cars for a living.
Many years ago, Avis kept trying to beat Hertz. They kept saying, "We're going to be first place! We're better than Hertz!" They said it over and over again. But it didn't work. They tried this campaign for 13 straight years. And you know what happened for 13 straight years for Avis? They lost money. They lost money for 13 straight years. During this same time, Hertz kept making money.
Finally, the Avis marketing team came together and said, "Listen guys, this is not working out. We're not first place. Let's stop trying to do this. Let's change our entire marketing plan."
Here's what they decided to do. They decided to tell the customers that they're second place. Had they lost their mind? No. Here's why.
Two Types of Customers
You have two different types of customers. You have customers that always want to buy from the underdog companies. And you have customers that always want to buy the best. And do you know the difference between these two types of customers? Here's the difference.
The #1 Customers vs. Loyal Fans
The #1 customers are bandwagon customers. Those fans always have a new favorite team - whoever's winning. The moment that team starts losing, they chose a new favorite team. They're always the fan of the #1 team.
But then you have the loyal fans. Chicago Cubs fans and Red Sox fans are loyal fans. They stick around. They say things like, "Listen, I've been a Cubs fan for 29 years. I'm loyal to them." Why? Because there's a certain emotional connection to an underdog company, organization, or sports team. They're emotionally connected to them.
But those who are #1 customers have no emotional connection. They just want to know they're the best. And who's best changes all the time, because no one stays number one forever. But the underdog fans are forever. They last a lifetime.
Back to Avis and Hertz
Finally, the marketing guy at Avis convinced everybody in the company that the marketing campaign moving forward is, "Avis is only second in rental cars. So why go with us? Because we try harder." What they meant by that is that they can't afford to lose you. Hertz can afford to lose you because you're just another customer. They have so many of them. The message from Avis was, "We can't afford to lose you. You mean a lot to us."
You know what happened?
The first year Avis did this, they made $1.2 million in profits. The second year $2.6 million in profits, and the third year $5 million of profits.
Do you know what happened next? A new regime came and they went back to, "We're going to be number one!" And then they started losing again. If they would have stuck with the underdog game plan, they would have eventually passed Hertz, but because they adjusted too soon, they didn't pass them.
What to Say if You're Second Place in Business
As you're building your business, if your client says, "What's the difference between you and xyz company? They say they're #1." Here's how you should respond.
You're right. They are number one. But that is why you matter to us more. They can afford to lose you. See, I can't afford to lose you. I have to do my best to make sure I earn your loyalty. That means a lot to me, and I hope that means as much to you as it does to me. I want to do whatever I can to make sure you are serviced properly, at the highest possible level. If that's important to you, I highly recommend that you do business with me.
Don't Be Afraid to Sit with Gorillas
Take that approach and do not be afraid to sit with people that are gorillas. I'm in an industry myself, where we are not number one. There are a lot of guys bigger than us, but we're doing our part, and quietly we've been growing. And as we sit with these other guys and do our part, we've done our best to treat our agents, customers, executives, staff, and partners better than anybody else. Why? Because they matter to us. While the guys at the top want to bully, we're coming up. And we're doing our best to take better care of everybody.
If you take that approach as an entrepreneur, you'll be amazed by how much the customers will love the fact that you're transparent with them. They'll appreciate the fact that you're going above and beyond everybody else to make sure you service those customers, employees, clients, partners, and vendors you've chosen to do business with.
So there are a lot of benefits to being second place in business.
By the way, if you eventually end up being first place, you'll have to adjust your marketing strategy, because this doesn't work once you're first place.
If you have any questions or comments, leave them below. And if you haven't yet subscribed to our YouTube channel, click on the button below to subscribe.