Core Business vs Core Product
Traditionally you would describe the main way in which you earn revenue as being your CORE business. Your main focus of attention when marketing and selling. Am I right?
And, in that traditional description, you are more than likely exchanging time for money. People pay you for your service, to produce a specific outcome or gain a particular result.
What the pandemic taught us though, in no uncertain terms, was that your core business could disappear overnight. Literally. We have never had such a seismic shock to our economy and society, as when COVID-19 hit us globally.
The ‘old’ business model has cracked
Of course I had been watching how the business world was changing in the last 5 years…by seeing the slow deterioration of the “old” style retail high street, big brand stores vanishing and lonely empty commercial spaces unable to be filled again.
I was intrigued as to what would be “next” and at what point Governments, Councils, business institutions and even retail organisations would realise that the ground they were sitting on was moving. Well, COVID-19 not only broke that ground – it sent a hurricane of external forces and resulted in even more tumbleweeds across towns and cities around the world.
Moving online – the Holy Grail
Yes, many businesses had been ‘moving online’ (before COVID) and many small businesses were ‘trying’ too. But…were they really? I don’t think so. There wasn’t enough effort to update the way people do business. In fact, I think there was a heightened sense of lethargy around change – because “if people are still buying…surely things are fine?”
Today, with a real life case of having your business completely stripped away by external forces – many more small businesses, and especially micro businesses, are realising: “If I don’t go online or change fast – I will not have a business”.
And they would be right.
Building a Hybrid Model
Now, I’m not saying you have to change everything you are doing in your business. You do, however, have to take a step back and revisit HOW you do things, and seek out the possibilities to improve how you earn your revenue.
One of the things I find most commonly with service-based micro businesses – is that they have so much treasure, but they have forgotten where they have buried it. And by this I mean – they have forgotten how valuable their experience and knowledge is and that people will pay to get access to it.
It’s time to look at your business model and stretch your thinking about how “things have to be”. There are millions of ways in which you can diversify your earning potential – but unlocking the value you have in that mighty brain of yours, and linking it to a need in the market place (or even…just in your back yard…i.e. your existing customers or clients.)
Core Business vs Core Product
Inside my group programme, I teach micro businesses all about defining what their Core Product is. Now, this is in the context of what I call your Value Ladder. (A Value Ladder is a way of visually mapping your product/service offering, so you can clearly see the relationship between price and value. The idea is that, as the client ascends the ladder – the level of value increases with the price paid.)
A Core Product is one the five categories of products you will create in your business (if you are going to move to a hybrid model where you are working on and offline with people). It’s the ‘main’ product or packaged service you have that is transformational for the customer…and profitably transformative for you.
This means that for the client:– you are solving their problem / issue / challenge from A to Z, completely transforming their situation from pain to complete relief, ease and confidence and their happy place.
For you, this means:– this product allows you to serve more clients, make more profit and leverage your time better. You will create the mechanism to draw most of your clients to this product – it becomes the “signature” product that you are most known for.
How do you know what your Core Product is?
Good question. Really it is simple. You will look to who you are serving right now (ideally) and dig deep into what else could you be doing for them, where can you look to:
- add more value in some way (therefore add more spend), and
- extend the lifetime they spend with you
As a knowledge worker or subject matter expert – there is always another way you can serve. Your brain and experience is marvellous. You just need to turn that magnifying glass your way and spot the value.
Normally I can crack this mystery with clients by asking: what’s the bigger problem your client has? Yes, you mostly solve the initial pains and aches – but what’s the higher level problem, that you are really solving? The higher the level of problem you solve >> the higher the value >> the higher the price paid.
What can a Core Product look like?
Great question. It really can be quite different for everyone. The important thing to just note is that this core product is not a standalone – so don’t think about it in that way. It is one part of your product ecosystem. All your products (or services) work together harmoniously.
Here are some characteristics you can look at and see if any ignore an idea for your core product:
- It is profitable (usually a one-to-many offering, leveraging your time input)
- It can stem from what your core business is today – but flipped on its head and delivered differently. (May replace it, in time).
- It can supplement what your core business is at the moment and work as an overarching service that works synergistically with what you are doing today.
- It can be a packaged service (and you could have partners that help you deliver it)
- It could be a completely online service, or a mix of on and offline.
- You could have two levels to your core product: a basic one, and then a higher level, higher value VIP option
Difference between Core Business & Core Product
The main difference between a core product and core business is in the profit margin, and in terms of thinking of a hybrid model, between online versus in-person.
You may want to consider whether your core business that you’ve been doing at the moment is actually what I would describe as a ‘product for clients’ (P4C). Which means that it’s the kind of product/service you would sell to an existing client.
So it might be that the service that you’ve been doing to date is a recurring retained service or a consulting service. But in terms of price point, and your value ladder, it’s more than likely sitting in the P4C category (see my article here about the categories). This won’t be true for everyone, but can be true for many.
I want you want to look at your revenue streams and what the split is on how you earn your income as a knowledge worker or a subject matter expert. Do you only have one at the moment – and its THAT thing that you’re doing right now?
Now, look at the time you have to invest in delivering that service – in marketing it, selling it, and then delivering it.
What I would urge you to do, is to think about how you are:
- Valuing your time (and therefore how you are pricing)
- Leveraging your time
With a core product, you might be able to leverage some of that time in some kind of hybrid option where it’s online some of it, it’s a one-to-many option and to some degree could be pre-recorded. You could also still have your in-person element.
Remember you also could include other people as strategic business partners, to help you create that for A to Z core product, where you’re not physically delivering that whole product.
Inside my Brand Compass™ Programme, we work on your brand positioning. Positioning is about a lot of things including: who you are in the marketplace, who you are for your customers, where your value lies and what your offer is. I teach you all about the product categories and challenge you to think outside the box about developing some products that all work together, leverage your time better and ultimately bring in better profit and more of a time balance for you.
Interested? Super. You can find out all about what’s in the programme here, and if you fancy a Discovery call to talk it through with me – then book that in.
Bitesize Insights & Truths on Branding for Micro-Businesses.