Your Product is not Sacred
We’ve all seen the commercials: a man stands shirtless in front of his bathroom mirror, admiring the best shave he’s ever given himself. A beautiful woman approaches from behind, caresses his baby-smooth face and suggestively smiles her approval.
For some guys, a $3 bag of disposable razors is all they need to do the job. But some men are looking to solve other problems—unrelated to facial hair—and the allure of an expensive 12-blade razor that gives a sexy shave does just that.
Enter Dollar Shave Club—the irreverent razor subscription service that disrupted the market by identifying a different problem: the hassle of shopping for razors and paying way too much for them.
The solution was simple: manufacture the product at a significantly lower price and mail razors direct to the consumer ... and brand it in a way that doesn't remind a man that he’s not a sexy TV model. Problem solved.
Whether you know it or not, your business is built on solving problems.
Most companies believe that they’re in the business of selling a product or service, but what they’re really selling are functional solutions embodied in a product or service.
Your customers have meaningful problems they want solved, and successful companies grow by finding a solution to one of those problems.
But if the problem you’re solving evolves and your product doesn’t change along with it, your company will be in trouble. That’s when your business model begins to weaken and become irrelevant if not addressed and refreshed on a regular basis.
Your product is not sacred. The only thing that's sacred is functional solutions to relevant problems.
That’s why as a leader, it’s so important for you to think in terms of the problem your company is solving instead of the product or service you’re offering. Customers will drop your product or service in a heartbeat if there’s another product providing a solution of equal or higher quality at a lower cost or that solves emerging problems you have yet to recognize.
How do you keep an eye on whether your business model is aligned or leading a market? In my book, The Enduring Organization, I explain how a truly relevant business model answers four key questions:
What’s the problem you solve?
For whom do you solve it?
What’s the solution you offer?
What’s unique about that solution?
That’s it. Together, these components make up your company’s value proposition, which can be a sentence or two describing how the product or service solves a specific customer problem. Successful businesses write unique, functional value propositions for each of their specific market segments so everyone remains clear about what they are doing and why.
Too many leaders just continue to follow the same business model year after year. Eventually, if they don’t ask themselves the questions above on a regular basis, they find themselves doing the same things harder and faster, instead of doing things differently—and the results are disappointing if no devastating.
And the same thing will happen with the Dollar Shave Club. When the current business model fails to solve their customers' problems, their subscribers will go elsewhere to find solutions.
For more on providing functional solutions in the marketplace, watch this video and explore my YouTube channel.
In his 25 years as Founder and President of The McLean Group, Hal McLean has honed a unique ability to liberate hidden capacity in businesses, creating value far beyond the bottom line. Follow him at @TheMcLeanGroup and contact him here.