What business are you in?
Theodore Levitt, a renowned scholar and founder of modern marketing wrote a now classic article in 1960 called Marketing Myopia. In the article he argues that the railroads let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. Had the executives realized that they were in the transportation business, rather than the railroad business, they could have moved into trucking and air transport, rather than letting other companies dominate. By extension, many argue that if newspapers had understood they were in the information business, rather than the print business, they would have adapted more quickly and more successfully to the Net.
History is littered with failed businesses who never quite figured out what exactly it is they do.
As the founder of Fisher Vista, LLC, a company that operates in the human resource and health care industries, I can promise you this is the single toughest question I wrestle with year in and year out. It's particularly tough in technology because the answer can change on a dime.
So it was with interest I read about a local bookstore here in Capitola, CA that is struggling with the same question. The Capitola Book Cafe is losing business to Costco and online booksellers and the slow economy is making it worse.
This economic slowdown has been a cleansing of some sort whereby a lot of really badly run businesses (e.g., Circuit City) that should have disappeared long ago finally went bust. But as the economy worsens, very good businesses like the the Capitola Book Cafe - and some quality HR vendors - are in dire straits. This is forcing them to ask tough questions like "what business am I in?" And the smart ones are adapting.
Says the owner of the Capitola Bookstore:
"We've been morphing from a bookstore with a cafe into a venue that happens to sell books. It's all about trying to create that Solon feel, to become a place where people gather."Some of the changes the bookstore made:
Who knows if this will keep them in business but kudos for the creativity and initiative.
- To broaden its appeal and establish its community roots, they now welcome consignment items and artwork.
- Hosting community events
- Created a kids area and special section for local authors
- Stocking hard to find titles
- Instituted a "membership"program entitling members to free food, drinks, event tickets, shopping sprees, etc.
- Host author readings including nationally recognized names like Tom Brokaw and Khaled Hosseini.
At our company, we've morphed from a web-based database of marketing and PR opportunities in 2001 to a SaaS / full service marketing firm with tools and services that help HR vendors achieve increased online visibility, web site traffic, sales leads and improved search engine rankings. But even with our full suite of services and stellar track record of growth and customer satisfaction, we still need to innovate to maintain relevancy - like our recently announced SEO Center. But I still struggle with that darn question!
What business are you in?
Wrestle with that one for awhile - or have a retreat dedicated to that single question. Your business - and customers - will thank you.