Competition is great!

About two summers back, our home town (Ankeny, IA) received its first frozen yogurt retailer. For a heath conscious individual like yours truly, frozen yogurt is a green light for to indulge a little. I mean it’s healthy right? When TCBY came to town, it gave the community another option for frozen treats. The national giant Dairy Queen had been the only game in town prior to this, lest we count the fast food places offering up soft serve cones. TCBY was stuffed with patrons everyday until the newness wore off.

A year later we experienced something magical, Lemon Tree!  Self serve frozen yogurt, genius! Grab a sample cup try each flavor to see what you like. Like a drug pusher giving samples to a junkie to get them hooked. Grab an oversized wax paper bowl and make as many selections as you want from 20 different flavors. It’s easy to get carried away. Some of the flavors are richer than others, some have more fat content, but the calorie board helps you make wise decisions. Then top everything off with a myriad of toppings from fresh fruit, to cookies, to candy. Like a kid in a candy store, the excitement builds. Soon the excitement is replaced with anxiety at the weigh in. This is when you place your now ballooning treat bowl on the scale, like Gary Busey on Celebrity Fit Club, and cross you fingers that you make weight. The guilt sets in on anything greater than 8 ounces. And the final price is based on the weight.  My wife and I visited Lemon Tree 5 days a week for the first few months. My son doesn’t need to go to college anyway.

Two weeks ago Cherry Berry hung a shingle in an old renovated convenience store on Ankeny Blvd. They have a similar business model to Lemon Tree, and would be considered direct competition. Cherry Berry is giving Lemon try a run for their money. They have driven the cost of frozen yogurt in Ankeny down considerably. TCBY, has coupons weekly running in the local paper, Lemon Tree has reduced their price per ounce, and the citizens of Ankeny are better off for having more choices and a better value for their dollar.

The financial services industry is also better off with increased competition. Competition breeds innovation. Competition produces better quality. Competition is the sword point that keeps greed from overrunning our industry with profiteering. Consumers enjoy improved products, more benefits at reduced cost, and they get more value for their retirement money.

Unfortunately, not everyone in our financial services industry would agree. They would ague that too many choices will cause confusion for customers. Under the guise of consumer protection, a few companies as well as regulator regimes, have attempted to narrow the competition for America’s retirement dollars. I just think they don’t want anyone playing in their sand box.

In general, you can be successful in business by working hard to provide value for your target market and effectively communicating your value proposition to them. On the other hand, you can become successful, even if you are slothful and your value proposition is unattractive, if you can eliminate or control your competition.  In the event of the later, everyone loses except the last one or two standing at the top of the pile.

The competition naysayers have been held at bay for the time being. However, they will try and try again because their value proposition is weak and they’re to lazy to come up with solutions that hold value to their target market.  It is the responsibility of all of us to continue to promote healthy competition in the financial services industry, and to ensure the ethical business practices that shield us from overregulation.

Here are a couple of articles I think you will enjoy:

Allianz Survey: For One-Third of Boomers, Retirement Income Is a Question Mark
By Warren S. Hersch
JULY 24, 2012

One third of pre-retirees are unsure about whether they can make ends meet when they reach retirement, according to a new report. The survey reports that 33% of “transition boomers”— those ages 55 to 65 who are less than 10 years from retirement—are unsure as to whether they will have money to cover basic living expenses in retirement…..


Confessions of a Professional Plate-Licker
Daniel Williams
JULY 19, 2012 •

Earl Bronsteen had a rather unique New Year’s resolution in 2010. He planned to do something many thought impossible, even unthinkable. He set out to eat 50 free lunches at financial seminars. That’s right; Bronsteen became public enemy No. 1 to some financial advisors. He became that thing that causes many in the seminar business to lose their lunch. For one year, Earl Bronsteen was a professional plate licker…..

Thank you for the opportunity to work with you and to earn some of your annuity and life insurance business. Your success is our success and we appreciate that you have chosen to work with us. We strive to continue to provide value and to help you reach your goals. Let me know if we could be doing something a little better for you.

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