What Business Are You Really In?
If you're passionate about what you do, then chances are high you're not just in it for the money. What drives your business forward?
Opinions expressed by Entrepreneur contributors are their own.
I see many people confused about what business they are in. Entrepreneurs feel that their product or industry defines their business, but is that true? Am I in the newsletter or publishing business? What about the content creation business? After all, we create thousands of pages of content each month. Maybe that's my business. I send a print newsletter to over 10,000 people a month; maybe I'm in education.
The truth of the matter is, I'm not in any of those businesses, nor do I want to be. Those are commodity businesses that can be ripped off and duplicated easily.
Related: Don't Let the Fear of Your Idea Being Stolen Hold You Back
My real business is helping you to build a community and to develop relationships. The goal is bringing more people into your community and encouraging them to stay there and to refer family and friends. I help you get your community members to buy more products and services from you that will benefit their lives.
It's called relationship marketing.
Sure, I use a newsletter to start to build your community. My company uses content to develop relationships to introduce or remind people of the all the products or services you offer. We run promotions to generate more referrals. We even educate customers with the content we create. But ultimately, we want your customers to feel part of a community and that they have a relationship with you.
This concept of relationship marketing is not an easy sell, but, more and more, you're seeing larger companies, even billion-dollar brands, implementing this strategy.
Back in early 2014, Dollar Shave Club, the subscription razor service that made the amazingly funny viral video titled "Our Blades are F******g Great," started sending a monthly print newsletter, The Bathroom Minutes, to each of its 1.1 million active members.
But they already subscribe.
Dollar Shave Club's senior vice president of marketing Adam Weber explained, "One of our most important marketing vehicles is our actual box," which includes their product and print newsletter. The Bathroom Minutes combines editorial content with product updates and company news, and informs and entertains to make the brand's loyal users "feel like they're part of a bigger community -- part of something more than just buying razors."
Related: The Psychology of Brand Loyalty: 5 Key Takeaways
Aren't these guys just in the razor business? Why do they add the expense of a newsletter to their packaging? I assure you they don't get 1.1 million of them printed and inserted for free.
Break it down.
It's simple. They know what business they are in: Community. With their subscription business model, the name of the game is customer churn and customer lifetime value. Making sure they improved those areas of their business was a priority, so what did they do?
- They had a solution for people. Good, inexpensive razors.
- They created a unique customer experience. Besides good packaging and a good welcome email, they sometimes sent out free samples with your order. They included The Bathroom Minutes each month with messages from the founder at the beginning of each issue. (Based on their strategy, I'm now wondering if I had a consultation call with them in the early days.)
They used the customer's experience to encourage word of mouth and social engagement, which helped build the brand and get them more customers.
The long game.
Finally, the benefit of the customer experience was that they had increased customer lifetime values. Could they track the ROI 100 percent on the extra money they put in the packaging, free samples, or The Bathroom Minutes? My guess is they couldn't. But with all the right pieces of the puzzle in place, they ultimately soared, and in a few short years sold the company for a billion dollars, all cash.
I'm a big believer that getting to the right answers starts with asking the right questions, so I ask again, what business are you in? Are you in the commodity business, or the relationship business? Do you need people to buy your products or services? Do you want and need referrals or repeat business?
Related: 3 Common Sense Keys That Drive Repeat Customers
Understanding what business you're really in and developing products and services to that end is what allows you to grow faster, make more money, and, ultimately, serve more people.