An unforced error are those mistakes that are self-inflicted and entirely avoidable.
Example: I play competitive tennis. When I needless hit a routine shot into the net–an unforced error–I am beating myself. My errors need to be forced upon me–such as a great serve or sharply angled ground stroke that I can’t reach because . . .uh . . I’m slow.
One of the most performance-draining errors that small businesses make is not choosing one primary customer.
“But we have many customers.” you say. But if you want to improve your company’s performance, you need to focus on one primary customer. Here’s why: Who your primary customer is becomes the foundation for all your major resource-allocation decisions. If you try to serve multiple customers, you are forced to thinly spread these limited resources across several fronts–what Robert Simons calls the “peanut butter” approach–spreading your resources evenly over everything.
Home Depot found out about this the hard way. They decided to spread their resources between the “home handyman”–which was their core– and “professional contractors”. They laid off their orange-apron-wearing professionals in favor of part-timers. They used the money saved to purchase 30 wholesale supply companies. There were not enough resources to adequately serve both markets and Home Depot suffered the largest drop in consumer satisfaction ever recorded for a retail company. Plus, their wholesale division floundered becuase they did not have enough resources to compete in this lower margin market. And. . . its was all self-inflicted.
If you are competing against a competitor who is laser focused on a single primary customer, they will beat you every time (or you will be forced to concede on price). Think about your own business. Would you rather do business with a company that gives you 100% of their time and resources on your very specific needs or with a company that only gives you a fraction?
Running a successful business is hard enough–what with the fickle economy and all–so don’t make it harder than it needs to be with the unforced error of not choosing one primary customer.