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Ricardo’s Law of Comparative Advantage
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conduct the seminars, request that interested individuals fill
out a card requesting a personal evaluation, follow up with
each prospect, analyze their needs, and sell them on investing
in one or more of the company’s products. The financial advisers
are all expert presenters and are excellent closers. After
learning Ricardo’s Law of Comparative Advantage, our client
decided to experiment. He found an outside firm that
specialized in conducting seminars. Although he felt his own
team was better, he recognized that the greatest return on the
time of his people was realized when they were knee-to-knee
with prospects, closing the sale. He decided to outsource half
of the seminars to the independent firm and tested the results.
Sure enough, although the number of prospects from each
outsourced seminar was lower, revenues still increased as his
financial advisers were able to devote more of their time to
their highest-value activity—presenting the company’s products
and closing the sale. In short order, he proved to his own
satisfaction the efficacy of Ricardo’s Law of Comparative
Advantage in his business by focusing its most valuable resource—the
time of its financial advisers—on its highestvalue
activity, which is selling the right products to qualified
prospects.
Another client’s business manufactures a sophisticated
piece of medical diagnostic equipment. By the time he entered
our coaching program, he had vertically integrated his
company with success, and he was able to produce many of
the components of the main product more cheaply than he
could buy them. When exposed to Ricardo’s Law of Comparative
Advantage, he recognized that if he were to redeploy
his resources, focusing them exclusively on manufacturing
and marketing his highly profitable diagnostic equipment but
purchasing the components from an independent vendor, he