What Business are you Really In?
You might sell insurance. You might sell cars. You might sell shoes. That question “what business are you in” always begets the obvious answer, whenever someone is asked it. But is that the right answer?
Saying that you sell shoes is a perfectly acceptable answers. That is, if you think the product you offer is the business you’re in.
Think of any dying industry, like printed newspapers. Or perhaps the yellow pages, or the now dead video stores, or video game stores. Each of them at one point was a growth industry, a rock star who could do no wrong. What business are they in now? What didn’t they do? Re-invent themselves, by evolving with the customers needs.
Take Dunkin Donuts
What business are they in? The Donut Business? The Coffee Business? Or as they claimed recently, the beverage business? This is a once-struggling company that continues to reinvent itself. But is this even right?
How about that Shoe Company?
Have you heard of Zappos? You know, that company that sells shoes (and in fact the name of the company that is a derivative of the Spanish word Zapatos… or “shoes”?). How did they become the giant that they are today, with well over a billion in sales every year and growing?
“Zappos is a customer service company that just happens to sell shoes.”
-Tony Hsieh, CEO and Founder of Zappos
That’s right – a ‘customer service’ company. If you hear anything about Zappos from a Zappos customer, chances are it will be positive. There are hundreds of stories about their outstanding customer service, including giving directions to a random caller to a local pizza joint, delivering flowers to a customer whose mom passed away, and talking to a single customer for over eight hours.
It should come as no surprise that 75% of Zappos orders are from repeat customers.
So what about your business?
So now onto your business – what business are you in? What if, instead of saying you are in the donut business, you look at the value you offer or what it does for them instead of the widgets you sell. The answer lies in the feeling, what it does for them, or the fulfilled desires of your customer.
So maybe Dunkin Donuts is really in the convenience business, or I like the ‘ahhh’ business. And doesn’t a perspective like that shift the way you’d answer other key business questions -like what products or services to offer?