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How to differentiate a business concept with the 4-W-H approach (Part III)

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A business concept is a way of describing how a business will generate revenue. It defines what your business will sell, the market to whom you will sell and how your business will hold a competitive advantage. It’s not a detailed plan though, but rather a starting point to determine whether the idea is worth pursuing.
 
Customers will naturally compare business offerings with each other, so it’s essential to build a concept that will make customers want to choose yours. An effective way is through differentiation, such as by creating a unique selling proposition (Part II), communicating with customers in 'refreshing' ways (Part I) and by creating innovative products and services.  
 
Another way to create competitive advantage is to understand how customers interact with your business at every step of the way, from initial contact to final closure.
 
This involves asking a few simple questions beginning with ‘why’, ‘where’, ‘when’, ‘who’ and ‘how’, the 4-W-H approach.
 
Suppose you want to start a hair salon, ‘My Salon’. Your task is to come up with ways to make the business unique, to differentiate the offering, to identify new sources of opportunity.
 
►Here’s how you do it with 4-W-H:
 
1. Why: “Why are customers using your product or service?”
  • What specific problems could they be facing and what could you do to enhance their experience? 
Take ‘My Salon’. People normally get their hair done to enhance their physical appearance. A good looking hair-do may have an important role to play (at least from the customer’s perspective) at family events, birthdays, weddings, funerals or dinner dates. Alternatively, a date with a hairstylist may be part of a monthly routine or simply about wanting to look and feel better.
 
Your answers may open up ideas for offering not just a hair-do, but a complete experience. My Salon could offer a “romance your partner” experience by offering complementary products like a full-day spa treatment for him and her.
 
2. Where: “Where are your customers when they use your products and services?”
  • Where would they like to be and can you arrange it for them?
 
A customer may have different reasons for using a service or product based on its location. For some, a hair salon located in a shopping mall represents an all in one touch point to groom your hair, visit your bank, do the monthly shopping, check out the latest book releases and gain access to your favourite Gelato.
 
Would customers like to be in the comfort of their own home when they get their hair cut? Maybe, for reasons of laziness or convenience. A mobile in-house ‘My Salon’ package could be the way to go.
 
And in keeping with the “romance your partner” idea, My Salon could offer cuts as well as complementary products for him and her at locations of their choice.
 
3. When:“When will customers make use of your offering?”
  • When is the best time for them to make use of your product or service?
  • What sort of emotions or experiences do certain events trigger for customers and how could you exploit this?
For example, customers may usually cut their hair after a long days worth of weekend shopping, a time when they feel tired or even stressed. How could My Salon make their experience more memorable? One way could be to offer an extended head massage during the wash and rinse stage or even reflexology.     
 
4. Who: “Who is your customer with when they make contact with your business, and are their thoughts important?”
 
A customer’s family, friends, business partners or even acquaintances may influence decision-making. Consider My Salon. Who else is going to be there besides the person having the cut? If your husband or boyfriend, they'd probably object to waiting three or four hours for you to do your hair. However, a combo package for him and her may sway the dude's decision in favour of waiting.
 
5. How:“How will you address any concerns that customers have?”
 
This may or may not relate to your specific offering. My Salon may be able to throw in an Indian Head massage or reflexology treatment, but you may be eating into a customer’s valuable shopping time. One solution could be to do the shopping on their behalf.
 
What if My Salon offered male waxes? From what I gather (and I’m strictly pleading the fifth here!), it’s not the most comfortable of experiences. Pain is the most likely area of concern for guys. To alleviate the concern and attract more customers, My Salon could apply a topical anaesthetic and advertise the treatment as "Guaranteed Pain Free".     
 
►Key lesson
 
The aim of the 4-W-H approach is to identify new opportunities or ways to differentiate your business concept. However, the answers you come up with only represent ideas.
 
The next task is to decide how best to develop these ideas, given your businesse's strengths and weaknesses. Also, what may seem like a good idea may be completely out of favour with customers.
 
Will a cut with a built in Indian Head massage go down well with customers? For some, maybe. The point is I have no idea. The only way to know is to ask your customers. So, once again, test…test…test.   
 
For more information on the 4-W-H approach, check out the work by Ian MacMillan and Gunther McGrath.

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