We need to re-think everything, including the business models that have driven success in the past. John Hagel
Open FOR Business As Usual?
We've seen those stalwart signs on the front of buildings surrounded by sheer devastation. Despite raging floods, earthquakes, riots and wars, those in business know they need to keep doing "business as usual."
What if the rules of the game are changing so fundamentally that "business as usual" will not be an option? What if the challenges around us we are facing are global cultural shifts rather than unexpected local events? How do you keep the sign on the door that says, "open for business as usual?" When "usual" no longer exists? What's on the back of that sign, "closed for good?"
John Hagel is a noted business strategist who has helped companies around the world improve performance and carve out sustainable edges in changing marketplaces. He writes, speaks and lectures on what shifts are taking place in the world and how businesses need to adapt to new business models to meet these seismic changes. The time has come, he says, for all companies to do away with "usual" and instead develop new models of business for a new "unusual" tomorrow.
In a recent blog post he described what a traditional idea of a business model looks like:
Business models focus on the specific form of value delivered to customers and the economics required to deliver that value to the marketplace. So that, customers feel they are paying a fair price and the owner of the business earns a decent return. It is ultimately all about money. How much are customers willing to pay for value received and how much does the business have to spend/invest to deliver that value?
It is clear that the business models of the past, the "business as usual," that many firms have found successful are no longer going to be successful in the transformed marketplace of the tomorrow. For example, businesses that drive sales from advertising.
"I do not believe advertising based business models will be sustainable in the Big Shift. Advertising is going to prove to be a less and less effective way to reach and engage with ever more powerful customers. As a result, we are ultimately going to have to figure out how to offer something of value that the customers will pay for themselves rather than continue to look to advertisers to foot the bill. This makes the search for new business models even more urgent."
Still Placing That Advert In The Local Paper Each Week?
How much is that advert costing you? What is the return on investment for that advert? Do you know? Can you prove that? Whenever I ask those questions to funeral business owners, I am often reminded of the quote attributed to John Wanamaker the United States merchant. He was considered by some to be a proponent of advertising and a "pioneer in marketing."
Half the money I spend on advertising is wasted; the trouble is I don't know which half.
He sadly died in 1922!
Perhaps if I can paraphrase his words:
"Most of the money I spend on advertising is wasted; the trouble is the other funeral businesses in the town keep wasting money too, so I need to keep advertising! What is the alternative?"
John Hagel suggests adapting many different business models for the future. One that I believe could be interesting to explore as a funeral business owner is what he calls a "Trusted Advisor."
Become A Funeral Business Seen As A Trusted Advisor
What’s that? It’s someone who, rather than sitting on the other side trying to push more and more products and services to me, crosses the table to sit next to me and gets to know me so well that he/she can proactively recommend things to me that I had not even asked about, but that turn out to be extremely relevant to my context, needs, and aspirations.
What could this look like in the funeral business marketplace? That is an interesting question that I want to explore in more detail in the coming posts. I would love to hear your views on the way the marketplace is changing for your funeral business. If you are saying, "it is not, we are open for business as usual" take care because tomorrow may see the sign turned around .... closed for good! What do you think?