Many leaders want to grow their customer or beneficiary
base. While almost all strive in this direction, few
succeed as much as they would like.
The approach that many take is to advertise more, offer
special price breaks, and send mail to potential users.
Those are all expensive and are easily offset by the
efforts of competitors.
You should instead be like Brer Rabbit who escaped Brer Fox
by complaining how much he didn't want to be put into the
briar patch: Go where competitors don't want to go but
where you can operate effectively, and you'll make enormous
progress.
Continuing business model improvement (upgrading the who,
what, when, why, where, how, and how much that are involved
in delivering for-profit offerings or nonprofit benefits)
can dramatically expand available resources or
profitability while growing an organization's ability to
serve its customers or beneficiaries. Here are some simple
examples of how the choice of "how" you operate and "why"
your offerings are used affect growth and cost performance.
How the Offering Is Provided
For-profit businesses should always be testing to see how
different ways of supplying an offering affect demand and
costs. Pizza parlors in college towns wouldn't sell nearly
as many pizzas if they didn't offer dorm delivery. Students
are willing to pay more to have a pizza delivered, so the
added cost doesn't hurt the business's volume. Enterprising
owners of such take-out pizzerias have been known to send
their drivers out stuffing menus under dormitory doors on
slow nights. Volume quickly picks up when the menus are
delivered.
Nonprofit organizations often find that demand increases
geometrically if the offering is provided in more
convenient ways. For instance, needy patients who live a
long way from hospitals seldom return for tests, even when
the tests are free, because the patients often have limited
access to and funds for transportation. Mobile clinics that
provide testing services in the evenings can increase the
quality and frequency of health care for those with the
most serious conditions at limited cost. Similarly, if food
distribution centers were willing to provide free home
delivery at recipient-selected times, few needy families
would fail to avail themselves of the service. For those
who are ill, such a service may be essential to receiving
the food. If volunteers are willing to use their own cars,
gasoline, and time to deliver the food, a nonprofit
organization can increase its reach greatly by coordinating
such improved accessibility.
Why the Offering Is Used
Adding new reasons to use an existing product or service
can provide an enormous business improvement. Our mothers
used Arm & Hammer Baking Soda in cooking when we were
young. We knew that good eating was ahead whenever one of
our moms took out her orange box. From the company's point
of view, moms couldn't bake often enough. But one teaspoon
of baking soda would produce eight dozen cookies. Church &
Dwight, which made this brand of baking soda, needed new
reasons why people should use their product. Someone
discovered that bicarbonate of soda also made a good air
freshener in a refrigerator. Suddenly, a family was using
as much of the product to deodorize its refrigerator for
six months as went into over 9,000 cookies. Revenues and
profits soared.
Literacy programs often provide free services to the poor.
Many such programs falter, however, when all they offer is
remedial reading aimed at helping the student read at a
fourth-grade level rather than a third-grade level. These
are adults, and they have limited need to add one year of
elementary school reading skill. Some programs overcome
this lack of relevance by letting prospective students
influence their curriculum to achieve some personal
purpose. Parents want to be able to help their children
with homework. Some readers want to learn how to fill out
job applications. Others need to know how to fill out forms
to apply for government benefits. Still others want to be
able to read the Bible. When the literacy programs are
customized in these ways to serve the student's purpose,
attendance improves and learning accelerates.
Copyright 2007 Donald W. Mitchell, All Rights Reserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of six books including The 2,000 Percent Squared
Solution, The 2,000 Percent Solution, and The Ultimate
Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.2000percentsolution.com .
