Back in 2008, I went to Harvard Business School to do a course on strategic marketing. Before the course started, we had to send in a short essay on our business drivers. Business drivers are developments under your control that directly grow sales.
For instance, if I had an ice-cream parlor, the weather would be a driver for sales. Unfortunately, I can’t control it, so the weather doesn’t count as a business driver. However, watching it eaten also drives ice-cream consumption. Especially by those who crave it. So advertising my ice-cream health benefits in diet magazines, may turn out to be a business driver. Or opening other parlors in streets full of restaurants could be another.
Astonishingly, many companies don’t fully know what those drivers are, or they understand their drivers but don’t measure them correctly.
If I had a recipe for business drivers, I’d be filthy rich. Unfortunately, finding one’s business drivers is a matter of ongoing trial and error. Value propositions change, markets change, and so do the developments that drive profitability.
There Are As Many Business Drivers As There Are Businesses in the Market
Business drivers: leading indicators of growth that are actionable by YOU
Business drivers depend on the specific match between industry and customer base. They differ from adding retail space, to speed of service, to direct marketing. You name it.
Contrary to popular belief, customer satisfaction isn’t always a business driver. Take home appliances. These are low-volume products, which you only buy every once in a while, and only because you need them. If market research revealed that current customers were unhappy with the appliance’s performance, fixing the problem would not have a direct and immediate impact on sales.
However, one business driver is over-represented in all industries: innovativeness. We have to underpromise and overdeliver, delight and surprise, and there’s no better way than innovation to do so. If you don’t want to start a price spiral and get stuck with the consequences, that is.
Innovativeness
It doesn’t mean boasting the innovativeness of a product. Neither does emphasis on the R&D budget or percentage of time spent on “free” thinking help profitability. Innovativeness is a means, not a goal.
The driver is: translating latent, dormant, and unmet customer needs into the pipeline of innovations!