One fundamental reason why a business fails.
Almost always it’s the failure to understand the underlying reason for its existence.
Imagine getting an answer to a question. In a foundation of every fruitful and lasting company, you know. The likes of Sony, Hp, and Disney. This question has been in the heart of every exceptional entrepreneur who built these companies.
What kind of business are you in?
Ask anyone what kind of business they are in? Naturally, they respond with the name of the commodity they sell. “We’re in the computer business.” Or, “We’re in the hot tub business.” Always the merchandise, never the product.
What’s the difference?
The power that comes from knowing what the customer is buying when he buys from you?
The commodity is the thing your customer feels as he walks out within his hand. The product is what your client feels as he walks out of your business. What he feels about your company, not what he feels about the commodity.
Understanding the difference between the two is what creating a great business is all about.
The truth is, nobody is interested in the product. People buy feelings. What feeling will your customer walk away with? Trust? Power? Love?
Charles Revlon, the founder of Revlon. Once said about his company: “In the factory Revlon manufactures cosmetics. In the store Revlon sells hope.”
The commodity is cosmetics; the business we are in is to sell hope.
Now the question comes, how can you introduce this perspective of selling feelings into your own business?
How to do it (with an example)
The simplest form of this question is, “why does it matter, to do what you do?”
One marketing team met to do this exercise. The team first met for several hours. They generated the following statement “to provide the best market research available.” Then they asked, “why is it necessary to provide the best market research available?”
After some discussion, their answer reflected a deeper sense of this organization’s purpose. Is to provide the best market research available. So our customers will understand their markets better than they could otherwise
A further discussion leads the team to realize. A sense of self-worth comes in making a contribution to their customer success. This line of self-questioning led the company purpose as: ” To contribute to our customer’s success by helping them understand their markets.”
With this goal in mind. The company now frames it product decisions not with the question “Will it sell?” but with the question “Will it make a contribution to our customers’ success.”
You “sell product x” or “you provide service y” “why does it matter.” Keep asking until you get to an answer that feels right.
Back to you
Reach to the fundamental purpose of your organization.