Relegation

Club Atlético River Plate

Image via Wikipedia

How many of you are familiar with the concept of relegation?  In sport we see it most notably in international club soccer, where the bottom teams in a league are sent down to a lower division and the top performers in that lower division rise up to play in the higher tier.  Obviously, there are financial implications and clubs that are built on one set of economic premises based on playing in a top league often suffer severe hardships when they are relegated.

What got me thinking about this was a note from my buddy Oz about River Plate‘s relegation in Argentine football.  One of the oldest clubs in the world, this is the first time they’ve been out of the top division since…well…never.  This is the first time.  So what does this have to do with you?

It might be easy to write this off as a once proud team having a bad year except for the fact that the Argentinian league – the Primera Division – relegates the two teams with the lowest average points per match over a three-year period.  This means that they’ve been bad for at least a few years and obviously couldn’t or wouldn’t take steps to improve.  Sound familiar?

Many businesses behave the same way and suffer the same consequences.  Oh sure, there is no “lower tier” of most products, but we see it in small ways.  Less shelf space in the market.  No buzz.  It becomes easy to get a reservation while the business next door is swamped.  You need to reduce margins to maintain sales.  Those are the indications that consumers are relegating your business.  It would be easy to write it off to the economy or to a hundred other things and businesses do go through cycles.  But it’s way too easy to grow complacent, to rest on the reputation a business has built up without performing up to the standards that reputation demands.  That’s what happened to a top-shelf football brand and it could happen to yours just as easily.

What are you doing to avoid relegation?  What businesses have you relegated lately?

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