There is a multitude of business models to choose from. In your market, will your model deliver sustainable profits? No two businesses are identical, subtle differences, nuance, exist in every one. Like an iceberg, we can only see those parts that are above the waterline. It can be dangerous to make assumptions about the totality of how they work. That said, despite the diversity, businesses that thrive do three things well.
Firstly, they focus on what they are good at, with awareness of their market, yet not defined by it.
Secondly, they are very good at delivering what customers expect, every time.
Thirdly, they communicate their offer so well that the value is crystal clear.
FMCG Retail Sales
In every market, others will act in ways you don’t. It’s what creates consumer choice. In retail, there are frequent sales and promotions. – “Bogof” deals and the like. In the experience economy, “free” – try before you buy – offers are common. Suppliers sometimes pay to play for the best shelf and aisle position in a supermarket.
In my days in the Insurance industry, the main differentiator for customers was the price. Personal insurance is a commoditised mass-market product.
I remember the launch of a competitor’s free motor insurance scheme. It offered a ’drive away today’ solution for used car sales. Innovative for buyers and it solved a market issue, a genuine sales block, for traders. Many people who used the ‘free’ insurance then stayed with the provider. Surprising when, for some, the cover was weaker and more costly than the alternative. As a ‘traditional’ insurer, we had to change how we communicated our offer. We had to prove its value. That work for one, quite small, aspect of our market addressed the issue of the free alternative. It also had a beneficial impact on all our clients and prospects. In the end, we won more business, because we were able to differentiate, and we had more sustainable profits.
Some speakers pay to speak, some speak for no fee, some usually charge and a few an eye-watering fee every time. As a result, it’s a diverse market in which all these models can, and do, coexist. Marketing, lead generation, sales, and customer delivery are all critical to any business. Speaking can be a part of any (or all) of those. A speaking business may pay to speak for marketing and lead generation reasons. For another, the client pays for a great keynote speech. Speakers with a topic in a competitive market have to differentiate their offer. They must prove the value they bring. When they do, they create sustainable profits.
Unlock sustainable profits.
What if the free, cheap (or even pay to play) offers were not there? Would the value be as well explained? When the value is not well-explained markets shrink.
There’s another factor too. Momentum and relationships matter. Being the one having the conversation with a client is often the key to securing a long-term deal, or a cross, or up, sell. That can mean that giving away a product, making a free speech, giving pro bono consulting. Yet that can also be the key to unlocking sustainable profits.
Free doesn’t damage a market, it’s part of it. Sometimes it makes the cake bigger, by exposing more people to the possibilities. In most markets, someone is always up for a giveaway, and that means you have to be ready.
Being ready means understanding your business and how it is performing today (The Building Better Business Audit can guide you…) and understanding the landscape of the markets you operate in. In other words, how well are you differentiating? Is your market functioning well and do you work well within it?