This is a simple but revealing strategic question. If you ask most business-people, they will typically answer in terms of what they do. They’ll say they’re in banking, or they make cleaning products or flooring, or they make frozen desserts. No doubt you have your equivalent answer.
There is nothing inherently wrong about describing your business in this way. But there is a better way.
You see, looking at your business in terms of what you do immediately frames your thinking according to your category context and a supply-centric perspective.
A more strategically fertile way to look at the business you are in is from a customer-orientation. This means defining your business in terms of why people buy your products and services, and what needs you satisfy.
For example, at Energi our supply-centred perspective is that we are in the shopper marketing category and we provide things like promotional campaigns, packaging and merchandising. In contrast, the customer-centred perspective is that we ‘create demand for our clients’. We help clients attract shoppers, understand and influence shopper decision-making, make their products more desirable, and cultivate shopper loyalty.
In a similar way, the customer-orientated perspectives of the earlier examples are:
|Supply-centric Perspective||Customer-centric Perspective|
|Banking||Money management – people need products and services to manage their money|
|Cleaning products||Home hygiene – people need products to keep their homes clean and healthy|
|Flooring||Home comfort – people need to make their homes comfortable and aesthetically appealing|
|Frozen desserts||Sweet treats – people want sweet treats to complete a meal|
There are two significant benefits to be gained from defining your business in a customer-centric way.
- More empathetic and relevant for shoppers. Understanding how you fit into your customer’s world and what they need provides essential clues for how to make your products and services more desirable.
- Better for differentiation and innovation. If you only define your business by your category or supply-centric perspective it is easy to be drawn into SKU match-racing and being stuck in ‘me-too’ category conventions.
The world of grocery has not traditionally lent itself particularly well to customer-orientation. Most categories are driven by supply-centred lineups of SKUs. Logic, order and planogram efficiency reign supreme.
But there are some exceptions to call out where clear thought for shopper needs and desires are apparent.
At our local New World there is a very shopper-friendly approach to fresh pasta. Simply lining up the different pasta and sauces together presents the range as a system. If you fancy a pasta night it is all there in front of you.
Salads have come a long way with innovation in recent times. There is now a full array from traditional raw ingredients, to partial mixes and value-add additions to spice things up with seeds, dressings and vegetable noodles, right through to ready to eat.
There has been an explosion of innovation in small goods. Packaging now offers lunchbox-friendly portion-controlled packs. The burgeoning range of value-added flavours and product formats such as tandoori shredded chicken, or packs of mini chorizo is great.
Online platforms have the potential to provide powerful shopper-centric experiences customised to the individual. Countdown’s site is evolving very well in this respect. It is merging the strength of limitless shelves, with clever chunking and organisation of content in different ways that line up with shopper needs and desires – meal ideas, specials, particular meal occasions as well as referencing the shopper’s preferences and previous shopping behaviour.
So then, what business are you in?
Why do people buy what you have to sell? What needs do you satisfy?