Ray Kroc from McDonald’s was never in the hamburger business – he was in the real estate. Do you know what true business you are in?
A recent article in INC Magazine reminded me of how important this idea is for marketers.
When Ray Kroc started, he was making a minuscule 1.4% percent of revenue from each franchise. It was barely enough to scrape by. His friend Harry Sonneborn, and future CFO, convinced Kroc to realize that the real business he was in was a landlord with long-term leases. If you buy the land with a 20-year lease to the franchise, you’ll have an enduring revenue stream.
And this gave Kroc control over quality because he could cancel their lease if they didn’t meet his standards in his contract.
Dominos
Most people see the brand Dominos and think of pizza. But in fact, they are in the delivery and technology business that sells pizza. The difference isn’t inconsequential.
By understanding what benefit, you bring to customers shifts how you think of your daily job. As Dominos make delivery easy, pizza is secondary to the convenience and ease of ordering.
The company’s focus on making delivery simpler is more critical to its customers than its quality. I don’t mean to imply that the pizza can be inedible, but if you are feeding a bunch of teenage boys – sun-ripened tomatoes with a touch of oregano aren’t vital to them. Dominos true business is speed to mouth.
Feelings, not Products or Services.
When you focus on the benefit, you bring to a customer or client, and you’ll often see that the product or service you sell is secondary to how it makes them feel. You may sell widgets but it is the benefit of that widget that drives purchases.
When I worked in the wine business, the corks we sold were highly engineered and manufactured to perfection. We weren’t in the wine closure or packaging business -we were in the ‘peace of mind’ business – bringing a feeling of assurance that that gave a winemaker comfort to know that her wine wasn’t going to oxidize or reduced.
Companies and consumers buy for different reasons.
I now buy from Chewy instead of a physical pet store because cat litter and cases of cat food are heavy.
Having it show up at my front door is convenient. Chewy makes life easier for me so I can avoid heavy lifting. The product is secondary to the schlepping. (a Yiddish word that means when carrying stuff is a pain).
Letters from Afar is a brand built on the idea that a letter in the mail can bring a different kind of experience for parents and children to bond in a digital world. Although the letters are exciting to read and look at, filled with stories from afar, parents’ real motive is the bonding between parent and child. They are in the bonding business – parent and child.
Take a moment to go beyond the thing you sell or the service you provide and understand how you make customers feel. Only then will you realize what true business you are in.
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Need helping realizing your true business?
I can help. You can set up a time chat with me about your marketing challenges using my calendar. Our initial conver?sation is free. You talk, I listen. Email me jeffslater@themarketingsage.com or call me. 919 720 0995. Visit my website at www.themarketingsage.com. Let’s explore working together today.
Photo by Erik Mclean on Unsplash
