What Business Are You Really In?

Understanding customer needs is at the heart of business success.

During these weird times of lockdown and social distancing, many business owners are pivoting to online solutions. We are certainly being approached by people with new ideas who want to make sure they address the intellectual property dimension appropriately.

Thinking bigger, specifically considering what business we’re really in, is a great way to potentially come up with ideas that would be valued by your customers.

A benefit of articulating a big purpose for your business is so you broaden your vision and don’t limit your thinking to the products and services your business currently sells. It’s important to see opportunities which you might otherwise overlook.

Although it isn’t an easy question to answer, it can make or break your business to see yourself correctly. Most companies think the business they’re really in is tied into their products and services. By avoiding a narrow definition of your business, you may discover that the real difference you want to make to someone’s life goes beyond your current business. By this, I mean that your current products and services, the ones that made you successful, and where your resources have gone, or where your knowledge lies may not be enough anymore to make the difference you want to make.

For example, Blockbuster saw themselves as being in the VHS or DVD business. They didn’t see themselves as in the business of entertaining and sharing stories. Despite their considerable advantages including connections with Hollywood, they missed the opportunity which Netflix spotted of producing and telling their own stories. The take-away lesson in this for others is to have a bigger vision.

As a business, you have to answer the question of what business you’re really in by focusing on the difference you can make so you see yourself as more than the business you’re currently in.

Think about what your customers really want from your product or service. Customers want the outcome that your product or service gives them. Thinking about your purpose is the essential starting point to determining how you might add value to your clients.

Nike understands that their purpose is not about making or selling sports goods. They know that they’re in the business of motivation, and encouragement.  If you consider one of their ads, you will see it says nothing at all about shoes.

Imagine what solutions you would offer if your business saw itself as being in the business of motivation and encouragement. New technologies or trends would be opportunities to broaden your offerings instead of threats.

Cinema Business

When I was a child going on outings to the cinema with my father and little brother would invariably start with a visit to the shops to buy sweets and drinks to take into the cinema. Cinemas didn’t sell foods.

Fast forward to today when a visit to the cinema is a completely different experience.  Somewhere along the line cinemas looked at their business in a different way and realised that they were as much in the food and beverage business as they were in the film viewing business. The clue was in noticing what their customers were doing.

Not only do all cinemas nowadays offer an array of food and drinks for customers to purchase, but some cinemas, such as the Kino-Teatre in St Leonards in Hastings have gone even further, and transformed the experience inside the cinema too.

The Kino-Teatre has a bar area as you enter the auditorium. Instead of the traditional rows of uncomfortable seats, you get roomy armchair type seating and even a little table for your drinks. The experience is more like a bar restaurant. By enhancing the customer experience inside the cinema, and carefully choosing the food and beverages to serve customers, such cinemas have created revenue streams that did not previously exist, and in fact, far exceed the amount they receive from ticket sales.

Asking ourselves this question of what business we’re really in helps to better serve our customers. But it doesn’t just stop at identifying new opportunities. It could impact our very survival as a business, as is all too clear when you consider Kodak.

Kodak

Had Kodak’s senior management defined the company as not just in the film business but in the memory preservation business, they would have been able to align their offerings to what their customers were trying to achieve and reacted more appropriately to the changing technological landscape.

Framing their business as being all about the preservation of memory would have called for different products and solutions. Those products would have changed with the times.

Kodak continued to push film products due to its senior management and culture which focused on preserving its existing revenues instead of understanding and then meeting customer needs.

The lesson from Kodak’s experience is clear: You have to be willing to disrupt your own business model to create the products and solutions that better meet the needs of your customers. Often that involves broadening your outlook.

The Difference You Make

Spend time understanding the difference you make to your customers’ lives and how you can communicate that difference. Your product is just the means to achieve that end state that your audience is trying to achieve.

Start with the customer experience and work back to what you can provide to meet the need.

Sony Walkmans were the equivalent of our iPhones and iPods. Motorola had the market share on mobile phones so they could have become the Samsungs or iPhones of today but they failed because they didn’t really analyse this question of what business they were really in. They focused on the products they had and missed the opportunity to offer alternatives.

They didn’t grow and evolve with the customer needs and with the market trends.

In a world where there are so many choices and options for other groups and services it’s essential to tap into what the customer wants and values. Find out what alternatives they are turning to – it is very likely that these go beyond your immediate competition.

People value things like trust or confidence, or to feel good because they donated to a cause. Or that they know they made a difference. Or because they have a sense of belonging or feeling of being heard. So, don’t just measure the tangible benefits people get from your products and services. Consider the intangible benefits too.

The successful brands are those that are able to clearly show their customers that by engaging with them they will become successful or better versions of themselves. They will become that ideal that they want to become, that they want to be like.

Intangible Benefits

It’s not easy to understand that intangible benefit that our ideal clients are looking for. But the path to success is to discover it, and to then talk about yourself in that way so it becomes how people experience your brand.

If people understand the value you are giving and the difference you’re making and how you can help them to feel what they want to feel, you can make an emotional connection.

Consider doing in-depth interviews to understand what your customers are feeling when they interact with you, to try to understand what they’re really after. What are they trying to become, and hoping to achieve? This will provide a clue to how you can fill that gap and help them to get to where they want to be. Realise that it goes much deeper than your products and service.

People have more and more choices and less and less time. We need to become part of our audience’s story by showing them that engaging with us will help them achieve the goals they have, the feelings they’re striving for, the ideal life they’re looking to get, that these can be had by engaging with our brand.

Changes in Technology

With rapid changes in technology and market demands the organizations of tomorrow, may look nothing like the ones of today. This takes vision, discipline and courage but may just be essential for your long-term success.

Success comes from understanding our customers’ wants and needs, and talking about the feelings, the dreams, the beliefs that they want and that you could provide them with.

You should have the clarity to understand that your audience are wanting a connection, they want to see their dreams and hopes reflected in another brand.

In the book, The Culting of Brands Douglas Adams analyses why people join cults and identifies a similarity to why they follow brands. There are ways in which we all tend to feel different, even alienated from the world around us.  This makes us search for a more compatible environment.

Conclusion

When we find an environment where our difference is seen as a virtue then we’re likely to feel a sense of security and safety in belonging there. People who become part of the tribe of fans/followers feel themselves to be within a group of like-minded people so they can be who they truly are and be celebrated for being themselves.

There is also the well-known example of the railways, and how if they had perceived themselves as being in the transportation business rather than purely in the railway business they might have taken control of the emerging automotive industry rather than being side lined by it.

I am running a series of webinars to help businesses to think through their brand, taking account of IP. You can sign up to the next one and get access to the previous episodes too.  The series as a whole might help you to think about your own business in new ways. My podcast Brand Tuned, Successful Brand, Successful Business might provide inspiration to think through your brand.