An X-Factor is your company’s unique solution to an industry bottleneck that has the potential to give you a 10X advantage over your competition. Although difficult to discover (if it were easy, someone would have already discovered it) it is certainly worth investing the energy and effort to pursue. The first step in discovering your X-Factor is to determine what the real bottlenecks are in your industry. Ask questions like: “What is the part of my business that I hate the most?” “What’s the largest cost component in my industry?” “What drives my customers crazy?” Go to industry trade shows and check out breakout session workshop topics. These are usually industry-wide problems that all of your competitors are dealing with too. Finding a creative solution to one of these bottlenecks could be a goldmine for you and could eventually revolutionize your industry. Once you find an X-Factor, you must keep it a closely guarded secret. Your competitors will eventually figure it out, but the head start you’ll have will give you a huge advantage, and it will give you time to start developing your next X-Factor.
One classic example of an X-Factor
is the Aussie themed chain restaurant, Outback Steakhouse. During the late 1980’s the biggest bottleneck to overcome was high manager turnover. Attracting and retaining the best managers could create a huge competitive advantage, so in 1988, Outback rolled out a creative compensation plan that required managers to sign a multi-year contract and invest financially in the restaurant they would manage in exchange for a percentage of the store’s cash flow and a higher than industry base salary. The deal could turn a $45K-per-year employee into a millionaire. The result was that 95% of managers stayed with Outback for 5+ years, again giving the company a huge advantage over its competitors.
Another famous X-Factor story
comes from the lawn care industry. In 2001, Happy Lawn found that its biggest bottleneck was in the cost and time required to acquire new customers. The average customer acquisition cost was about $300 and usually took 3-4 weeks. Happy Lawn’s X-Factor was to speed up the sales process and cut the cost significantly by using aerial photography, making it possible to measure lawn size and give a prospect a quote right over the phone. The process went from 3 weeks to 3 minutes. This X-Factor revolutionized the industry and is no longer a secret, but it gave the company a huge advantage for several years.
Finding your X-Factor isn’t easy
and it won’t happen overnight. The best way to approach it is to establish a rhythm of meeting regularly to ask questions, gather insights, test assumptions, fire bullets and move the conversation forward over time. Depending on how quickly you want to move, you could set up a weekly, every-other-week or monthly meeting with a core team to start the dialogue, start documenting your ideas and start testing those ideas. You will be amazed how much you will learn about your customers, your market, your competitors and even your own business when you begin meeting regularly just for the purpose of thinking about it. And just imagine the impact a 10X competitive advantage could have on your business!
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