I just read an interesting article in the latest issue of Marketing Management that reminded me of the importance of knowing what business a company is really in. Looking at a prospect's business from that perspective offers an interesting ice-breaker approach to developing a new client.
The author began the article with these statements: McDonald's is not in the hamburger business, Mercedes-Benz is not in the car business, Clinique is not in the cosmetics business and Hush Puppies is not in the shoe business.
His answer is that all of these companies are in the solutions business, based on the Theodore Levitt quote from his 1983 book The Marketing Imagination (still one of the most influential books I have read) :
People don't buy things, they buy solutions to problems.
Levitt's answer at the time was that McDonald's should consider themselves in a broader context, i.e. the fast-food business, Clinique in the beauty business, etc. But that answer falls short in the reality of today's overcrowded business environment.
This means that McDonald's has to go beyond the broad stroke description of fast-food to realize they are in the business of convenience, entertainment for kids, family-friendly dining, quickness, efficiency, etc. Similarly, while Clinique may sell cosmetics, they are really in the beauty, self-image, self-esteem, age transformation, sex appeal business.
This isn't totally new thinking, but in today's "long tail" marketing world, where product specialization has become essential, companies need to revisit this line of thinking on a regular basis. Knowing what business you are really in opens up new thinking about marketing strategy, competitive environment, and new product development.
And for agencies and marketing services companies, it opens up a new way to reach out to business prospects with value-based thinking that can grow a client's business.
And that should be the business every agency is in!
Don Morgan is Head Rainmaker at Raindance Consulting, a business development and social media consultant in Seattle.