How does popcorn pop? Ancient Native American Indians believed that a spirit lives in every kernel of corn. When heated, the spirit gets angry and throws a fit. As a result, the corn pops! However, we now know that the popcorn phenomenon occurs because water trapped in the kernel turns to steam when heated, and like a steam engine, it pushes against the soft kernel, causing it to burst open with a ‘pop’.
Last week, at a business strategy course, I heard a story of a man who turned his popcorn business around by capitalizing on this little secret. This man realized that selling popcorn was a business that did not have much competitive edge. So how do you differentiate yourself when your product is a mere commodity that everyone sells? He started to ask himself ‘who buys popcorns and why?’
His answer – families with young children and the reason they buy is to watch the popcorn go ‘pop’.
So he kinda figured out that the unique selling point of pop corn is the ‘POP’. So he asked himself the next question, how do I make my popcorns pop louder?
After studying and discovering how popcorns explode, he found out that the amount of pop was tied to how much water the kernel had; it will determine how much steam it will produce. He tinkered with various ideas how to increase the amount of water in each kernel, until he was able to produce a type of packaging that allowed the right amount of moisture to be maintained in storage. This allowed him to sell popcorn that gave a bigger POP! Now, his popcorn was differentiated from his competitors in the area that mattered to the client – the POP!
So what can we learn from this story? As the year comes to an end and business planning cycles begin for the next year, what are some areas you must consider in your planning? From this story, there are three things:
First – how well do you know your core customer? Do you know why they buy what they buy? Can you articulate in one sentence who is your core customer, and what problem are you really solving for them? Have you differentiated their needs, fears and their wants? Many businesses have a vague idea about this. And from my experience working with companies worth a few million to a few billion, they usually have little time invested in dissecting this question.
Secondly – Do you know in particular, why they buy from you, and not from your competitor? What makes you different? How does your product or service address your customer’s needs and fears? In a world where everything is becoming more and more commoditized, the need to stand out is critical. The only problem is this – many times, our customers want to ‘commoditize’ us because they want it cheap, but is that the game you want to play? Too many businesses get sucked into this whirlpool of letting your customers, and sometimes your competitors, decide what your business should be. Identify three reasons why people buy from you and focus on making these three things better!
Thirdly – What is the core competency you need that will help you make that special difference? The common thinking is to focus on correcting weaknesses or plugging gaps. However this approach will not help you to scale up. It may solve your problems but it will not help you grow exponentially. Take a step back this planning session and ask this question,
Many of my clients start off saying they don’t know what makes them different; they just try to meet industry norms or standards. Or they list an industry standard as a competency e.g. ‘We have ISO XXXX and this is our edge’. However, they miss the point that everyone has the same competency as them.
But when we push them harder and help them ask the right questions, they discover that every business has a core competency they can leverage. It is just a matter of finding out, and putting a strategy to enhance it. “What makes us special? What makes us unique in meeting our customers’ needs? What makes it hard for our competitors to copy? These are questions to explore in your planning.
Too many year-end planning sessions go to waste because business leaders ask the wrong questions. Wrong questions lead to the wrong answers, and wrong answers lead to bad strategy. While business may still grow due to various factors, we want to not just grow but to grow continuously. These three questions, when answered well, will lead you to not just profitability but profit-ability – the ability to continuously grow your profits. Happy planning!