Which kind of business are you building?

I’ve often thought that there are two kinds of businesses: those that make money from providing more value to customers, and those that make money from providing less value to their customers.

This brief article describes 5 grocery store ripoffs. I’d add Trop50 to the list, as noted also in the comments here. Trop50 is Tropicana orange juice with half the sugar. Awesome, until you look at the label and realize they added water so it’s only 50% orange juice. And the last time I looked, they actually charged MORE per half gallon of half-juice than for a half-gallon of pure juice. Are their customers really so pressed for time that they can’t mix juice with water when it’s coming out of the fridge?

And this isn’t bashing — consider a twist: like many parents of young kids, I have a love-hate relationship with juice boxes. It’s not about crappy drinks anymore — you can get organic fruit/vegetable mixed juices at Costco easily enough. No, it’s that my kids drink 50/50 juice/water mix at home, but juice boxes come in 100% juice unless you buy junk.

What if Tropicana put their great juice in a 50-50 juice box, where I get more value because I can give my kids the drink I want and can’t readily mix it myself?

So that’s an anecdote. Walk around tomorrow with your eyes open and think about the companies you interact with: who gives you more value? Does Costco? It’s certainly part of their proclaimed brand identity (salmon story, anyone?).

Now, think back to the title of this post: which kind of business are you building? When you think about the sustainability of your business, do you see a future in which it becomes increasingly easier to deliver less and less to your customers? Or one in which the amount of value you deliver is limited only by your imagination? Is your business one in which you expect to disappoint customers regularly and so need to plan to ensnare new ones consistently? Or do you expect to keep your customers happy and seldom see them defect?

Which kind of business are you building? Tell us in the comments.

1 Comment

  1. Followup: takers and makers on October 9, 2010 at 7:38 am

    […] post, of course, reminded me very much of our post on two kinds of businesses: those that deliver more value and those that deliver […]

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