Your Business, What is it?

Sure, you know the business you are in. How can you not? You had it all figured out when you started. If you have a hotel then you must be selling overnight stays, if you have a Mercedes Benz dealership then you must be selling luxury cars, if you bake cookies then you must be in the cookie business. Right?

Well, not exactly.

Marge Hefernan of Business Net tells a story about the Boston-based Dancing Deer Baking Company. The company, headed by Trish Karter, is famous for its unbelievably delicious and exquisitely presented cookies. Their molasses clove cookies is their best seller and the winner of the food industry’s Best Cookie Award in 2007. The bakery had become famous for fantastic indulgences and gorgeous packaging. But, like many entrepreneurs, Karter struggled with the company’s growth, especially with the markedly seasonal nature of her product — sales usually peaked between Thanksgiving and Valentine’s Day.

But, that pattern revealed a different truth: Dancing Deer isn’t a bakery — it is a gift shop. Most people bought their products as presents. Their famous and award winning cookies: the molasses clove, caramel pecan brownie, and strawberry shortcake are not only great eats but are seasonal gifts as well. But of course, if you give cookies one year, you probably don’t want to give the same gifts the following year to the same persons.

So, unless Dancing Deer offered a great variety, their customers would move on. This revelation was important. It meant that variety was key to the business and that the talent and effort Karter had always poured into packaging was crucial, not peripheral. It also identified partners and marketing channels previously invisible. In short, it changed the way the company thought about building customer loyalty. It adapted and continues to be successful.

So you see, what you might have originally thought your business was, might no longer be. You must, therefore, be always on your toes because what you think the business you are in, could be looked at as another business by your customers.

Dealerships of Mercedes Benz automobiles should know that their customers are not simply buying their cars because they are luxurious, comfortable, and safe. Their customers are also buying the enhanced image such cars confer. A high-end car, such as a Benz, is a status symbol and a sign of success — at least as perceived by many, most especially the buyer.

If you are in the hotel business, why do your customers come to you instead of the other hotels, cheaper even, beside you? What is that value that people see in your offering that they think they won’t be getting from others? If people who are not hotel guests eat in your restaurant, doesn’t that tell you something?

Many people don’t want Wrigley’s Doublemint gums just so they have something to chew on — they want a fresher breath. Pietro Ferrero, an Italian confectioner, probably saw the “product” that many people are buying and created the highly successful Tic-Tac. Not chewable as a gum but a breath freshener nevertheless.

As multi-awarded and legendary Harvard Business School marketing professor Theodore Levitt puts it, "People don't want to buy a quarter-inch drill; they want a quarter-inch hole!" In business, it is not always the product itself that is all-important, it is the benefit that the customer derives from the product. Remember, a customer will only buy the product or service if s/he thinks the value of what you offer is more than the value of the money s/he is parting away with.

Do not be blindsided by a competitor or by the waning interests of your customers. Know what they want and be aware of the “product” you are selling.

Know the business you are in.