What does it mean & why is it important?
So you sell a product or a service, but what business are you REALLY in? Does your current offering define the business you are in? What happens if things (or technology) changes, will you still be in business?
Figuring out what business you are REALLY in is important in the short-medium term, but critical in the long term. It allows you to de-risk your business and provide opportunities to scale up.
How to address this
There are three things to think about:
1. Find the actual value you provide
Outside of the direct sale of a product or service, what value do you provide your customer? How do you impact their life?
Another way of putting it; how does it impact their mental or emotional state? How do these states change before, during and after using your product or service? What state would they be in if they did not have access to your product or service?
- Drained, tired or energetic
- Sad or happy
- Stressed or calm
- Lonely or connected
A coffee shop sells coffee (in a cup). The coffee is the product that is being sold (and money exchanged), but what is the value that is provided to the customer? Is it just coffee? Or is it more? Lets explore…
For me, a coffee in the morning is a ritual that gives me a mental (and physical) boost of energy and provides me with motivation/inspiration to tackle the day. So you could say the value that the coffee shop is providing me is “motivation/inspiration”! Much better than “just” coffee!
You might ask why this is important? Well you’ll find out soon.
2. Ensure a congruent message
After you figured out what value you provide to the customer, it is time to ensure that the value that you provide is reflected in all interactions with the customer. This includes your brand, socials, website, premises, customer facing staff etc…
Back to the coffee shop, if you’re in the business of “motivating/inspiring”, your approach to your business would be very different to just selling coffee. You’d apply “inspirational” themes to your website, socials and your shop (décor + uniforms). Your staff interaction might also need to be a bit different! Think positive, happy and with a smile, as opposed to focusing on a efficient transaction (money in, coffee out).
3. Expand your offering
With a business that is providing larger and deeper value to the customers, are there any new additional offerings that can be bundled with your current offering?
Back to the coffee shop, other than coffee, what other offerings can be sold that provide “inspiration/motivation”?
Over my many years of experience working with start-up businesses, I have seen many create a brand (including business name) that is tied in with a particular solution or technology, but what happens when technology changes or there’s a better solution? If you focus your business on the value you provide, your solution/offering can change as need be. If you are in the business of “inspiring/motivating”, what other products/services can be offered, especially if one day coffee is found to be bad for your health (heaven forbid)?!
Take home message
It is extremely important to identify what business you are REALLY in by figuring out the ACTUAL value that you provide your customers. You can then ensure you have a congruent message through out, and expand your offering. This de-risks and future proofs your business, and allows for expansion!