What Business Are You Really In?

Have a look at this picture from Wiltshire, UK. On the left is a pet store. On the right is a vets. Both run by the same company.

Every other pet store in the world is losing profits by not having a vets next door. And every other vets is losing out by not being able to send its visitors to the adjacent pet shop.

In this case, it seems the pet shop came first. It’s part of a chain of stores. What this very smart business understood was that it isn’t in the pet shop business. It’s in the business of making dogs and their owners happy. Big difference.

That understanding opened up the doors to possibility and profits. If you’re in the pet store business and want more profits, you either have to sell more stuff, get more customers or open another pet store. If you’re in the business of making pets and their owners happy and want to increase your profits, there’s a world of possibility on how you might do that, including opening a vets.

Much of our time on these pages is focused on the vital task of getting more customers. We also talk about selling more of what you sell to those customers — getting them to purchase more frequently.

But there is another option. What about selling them something else? Not your core product or service, but just something they want?

This involves grasping a fundamental principle: despite what your accountant tells you, the most important asset in a successful business is not equipment or property. It is the relationship a business has with its customers.

When a customer first spends money with you, they become an asset with a clear potential value because they’ve done something very significant. They’ve jumped the hurdle of trust that has to happen before someone gives you money. Despite all the choices out there, all the competition, they chose to do business with you.

That makes them 10 times more likely to do business with you again compared to someone who hasn’t — and it doesn’t matter too much what you sell them.

If I sell lawnmowers, I could be tempted to think that the important part of the transaction is that the customer bought a lawnmower. So I’ll start to think of other garden products I can sell to them, which is obviously a smart thing to do.

But the really smart approach is to understand it isn’t that they bought a lawnmower, it’s that they chose to buy it from ME. It’s the relationship that counts.

So here’s a crazy idea. Once I’ve sold them all the garden stuff I can, what if I call them or email them and ask if they need a sofa. If they do, I’ve teamed up with a great local sofa company and together we’ll sort the sofa of your dreams.

The potential for this is limited only by your imagination and your willingness to be tenacious. You can choose to offer something that has a similar theme to what you currently sell, as with the pet store and vets, or you could offer something completely different. There are no rules. 

Just ask the richest man in the world, Jeff Bezoz. Can you think of anything dafter than offering the buyers of an ecommerce delivery company (Amazon), a streaming media service and building a movie and TV business off the back of it (Amazon Prime)? 

So what business are you really in? Are you in the business of selling the specific product or service you offer and limited to that for the rest of your Entrepreneurial life? Or are you in the business of enhancing your customers’ lives? If it’s the latter, start asking yourself what they want and need and how you can either provide that or be the concierge that introduces them to those who can provide it.