Diversification is a key component of a long-lived, healthy business. Diversification is the process of a business enlarging or varying its range of products or field of operation. Personally, I don’t think of diversification as a process, I think of it as a conscious decision to prosper. Diversification is a proactive growth strategy. Adding new products and services to your business can gain you entry to an attractive new industry full of new customers and high sales potential. It can also kick-start growth again with your current customers.
At BioZyme®, sales diversification is one of our five corporate goals. As a high growth, innovative company not diversifying is not really an option for us. Of course, the tricky part is determining where and how to diversify. Adding the small ruminant brand wasn’t all that tricky, but it has been a pretty easy way to accomplish diversification.
It all started with end-users asking why their sheep and goats could not get the Concept•Aid® line like cattle people could. Being taught by Dr. Francis Fluharty that sheep and goats are not the same and that they are way different than a cow, I wanted us to create products for each of these small ruminants instead of a one-line-fits-all approach. While the population numbers make you think you would put them together, my educator taught me to realize that would not be best for the animal. As an animal lover, having both sheep and goat products in the DuraFerm line became the only way to go for me.
The population of sheep and goats in the U.S. has been stable over the last few years at around 8M head. This is just about the same number as the population of dairy cows and horses. In all cases, we should be focused on a targeted sales approach with salespeople that have time to focus on the diversification, a specific marketing strategy for the diversification effort and a thorough follow-up effort on both to keep the pipeline funnel moving correctly.
At the risk of being long winded, I can’t pass up the opportunity to expand on how diversification brings up the importance of knowing your customers’ demands. To deliver value to your customers, you must have a clear understanding of their needs. This doesn’t change if they are a sheep, goat, dog or horse customer. However, it is probably more important to acknowledge it as a business owner when one is trying to diversify.
A customer need is a problem that a person is trying to solve, which motivates them to seek a product or service to do so. Another way to understand customer needs is to think of them as jobs to be done. The jobs to be done (JTBD) theory was first introduced by Harvard Business School Professor Clayton Christensen. In the online course Disruptive Strategy, Christensen asserts that customers don’t really buy products; they “hire” them to get a “job” done. In Disruptive Strategy, a JTBD is defined as “a circumstances-based description of understanding your customers’ desires, competitive set, anxieties, habits and timeline of purchase.”
Based on this definition, customers hire a product or service based on how well it fits their job description. If you understand the jobs your customers are hiring your product or service for, you can create a winning value proposition and drive innovation within your organization.
By aligning your company with JTBD, you can tailor your offerings to deliver value to your customers, achieve differentiation in the market, and avoid disruption. There are a number of ways to learn about your customers’ jobs to be done. Here are three ways to develop an understanding of your customers’ needs to better serve them with your products and services.
- Reflect on Your Experiences
The first method for identifying jobs to be done is to reflect on your own behaviors and experiences, identifying patterns in your decision-making process. You yourself are a customer and, in the absence of other data sources, self-reflection can be a helpful starting point.
- What motivated me to make the purchase?
- What other options were available to me?
- Why did I choose this product over the other options available?
- What goal did the product help me achieve?
- Observe Behaviors Around You
In addition to reflecting on your own experiences, you should observe the behaviors of those around you. If possible, look for opportunities to observe people at each stage of the buying process—from the time the job to be done arises to the final decision. Observe how people use the product or service to understand what goals it helps them achieve or challenges it helps them avoid. Look out for compensating behaviors or actions people take when a product or service doesn’t exist to fulfill their needs. Understanding the JTBD at the core of inconvenient alternatives can help you identify an underserved need in the market and inspire ideas to satisfy it.
- Order some DuraFerm
Force yourself to diversify and figure out how to get the job done!