Provide an offering in more desirable ways and appeal to new reasons for employing your offering, and you can gain tremendous effectiveness by attracting more people to use your offerings.
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.
Business model improvement (continually improving the who, what, when, why, where, how, and how much that are involved in delivering for-profit offerings or nonprofit benefits) can significantly expand 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 leaders of such take-out pizza parlors have been known to send their drivers out stuffing menus under dormitory doors on slow nights. Orders quickly increase after the menus are delivered.
Nonprofits can find how many they can serve grows exponentially when the offering is provided in more convenient ways to the beneficiaries. For example, needy patients 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 show disappointed results, 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 students are adults, and most 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 literacy programs are adjusted to serve the student's purpose, attendance improves and learning accelerates.
Copyright 2007 Donald W. Mitchell, All Rights Reserved
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