What Business Are We In? If you said “solutions”, think again.
What Business Are We In? If you said “solutions”, think again.
When asked this question, most of us tend to answer it in terms of our typical activities and expertise. We speak of what we do and how we do it. My advice to those attempting to articulate an effective marketing message is to remove yourself from the what and how. For a more effective marketing message you need to articulate why you do it. This is achieved by looking at your business through the eyes of your customers. What are the outcomes that your product or services helps them to gain? How is their life improved? What happens to those who choose not to do business with you? What do they miss out on? With a deeper understanding of your answers to those questions, you more effectively speak in terms that will resonate with your ideal prospects.
We Sell Solutions! ...Or, Do We?
We see the slogan, "We sell solutions" applied in the marketing of both products and services. It is an attempt to convey customization and added value. However Q&A in the box below significantly raises the bar for those who claim to be in the solutions business.
What business are you in?
* If you charge for stuff, then you are in the commodity business.
* If you charge for tangible things, then you are in the goods business.
* If you charge for the activities you execute, then you are in the service business.
* If you charge for the time customers spend with you, then you are in the experience business.
* If you charge for the demonstrated outcome the customer achieves, then and only then are you in the solutions business.
* NOTE: This list came from a website that no longer exists, so I'm unable to provide credit.
Charging on the basis of customer outcomes transfers the risk from the buyer to the seller. As my finance professor taught me, where there is increased risk, there should be an increased return. So selling solutions on the basis of outcomes should generate higher margins. And shouldn't our customers be more willing to pay more when they can pay from their new found profits? That said, my professor also taught us that cash is king. So should cash flow considerations be a detriment to charging for outcomes that take time to unfold? Isn't that what contract bonuses are for?
It is quite alright to be in the goods, service or experience businesses. But if you claim to sell solutions, might you consider structuring your transactions with profit contingencies that allow your customer to both transfer the risk and share the wealth?
What Business Are We In If you said solutions think again - To learn more about this author, visit Tom Lemanski's Website.
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What's Your Answer?
When asked this question, most of us tend to answer it in terms of our typical activities and expertise. We speak of what we do and how we do it. My advice to those attempting to articulate an effective marketing message is to remove yourself from the what and how. For a more effective marketing message you need to articulate why you do it. This is achieved by looking at your business through the eyes of your customers. What are the outcomes that your product or services helps them to gain? How is their life improved? What happens to those who choose not to do business with you? What do they miss out on? With a deeper understanding of your answers to those questions, you more effectively speak in terms that will resonate with your ideal prospects.
We Sell Solutions! ...Or, Do We?
We see the slogan, "We sell solutions" applied in the marketing of both products and services. It is an attempt to convey customization and added value. However Q&A in the box below significantly raises the bar for those who claim to be in the solutions business.
What business are you in?
* If you charge for stuff, then you are in the commodity business.
* If you charge for tangible things, then you are in the goods business.
* If you charge for the activities you execute, then you are in the service business.
* If you charge for the time customers spend with you, then you are in the experience business.
* If you charge for the demonstrated outcome the customer achieves, then and only then are you in the solutions business.
* NOTE: This list came from a website that no longer exists, so I'm unable to provide credit.
Charging on the basis of customer outcomes transfers the risk from the buyer to the seller. As my finance professor taught me, where there is increased risk, there should be an increased return. So selling solutions on the basis of outcomes should generate higher margins. And shouldn't our customers be more willing to pay more when they can pay from their new found profits? That said, my professor also taught us that cash is king. So should cash flow considerations be a detriment to charging for outcomes that take time to unfold? Isn't that what contract bonuses are for?
It is quite alright to be in the goods, service or experience businesses. But if you claim to sell solutions, might you consider structuring your transactions with profit contingencies that allow your customer to both transfer the risk and share the wealth?
What Business Are We In If you said solutions think again - To learn more about this author, visit Tom Lemanski's Website.
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