During the July 4th holiday, I decided to celebrate our nation’s independence by locking myself in a car with my family (no, the irony is not lost on me) and taking an epic road trip through parts of the Midwest (yes, we all survived with our sanity intact. There was a 14 year old in the car so it was close.)
One of the most memorable stops on the trip was our visit to Sun Studio in Memphis, TN. In case you don’t know, Sun Studio (AKA “The Birthplace of Rock N’ Roll”) is the recording studio where iconic American musicians like Elvis Presley, Johnny Cash, Carl Perkins, and Jerry Lee Lewis got their start back in the 1950’s.
From a business perspective, what really stood out to me was how little the Sun Studio had changed since the days Elvis and Johnny Cash created music in the building. Other than restoring some of the fixtures and artifacts, most of the building has been left untouched. Standing in those rooms on the tour, you can almost hear history being made.
The experience got me thinking about how often in the name of “growing our business” we wipe away the essence of our business.
“The essence” of my business?
What does that even mean?
Although you may not have thought of it in exactly these terms before, chances are you have thought about the essence of your business. If a business coach has ever asked you to list your core values, for example, you understand a little piece of what I’m talking about. Marketers sometimes refer to it as “the magic” or “the secret sauce.” Simon Sinek famously talks about finding your Why.
Basically, it’s what gives your business purpose. It’s what you’re all about—the big idea or concept that motivated you to start your business in the first place and keeps you moving forward.
Spring Insight’s secret sauce is strategy. I started the business wanting to help businesses with their website creation and design, but I always knew that the best websites were those where it was obvious that an over-arching business strategy was behind everything. As I developed my own business, I added marketing services, which were a natural outflowing of my focus on strategy. We’ve recently added launch strategy to our marketing services too to help business’s launch new brands, products, and services, another natural progression of my original vision.
Now that we better understand the concept we’re after, let’s look at what not to do and lessons small business owners can take from this cautionary tale.
Etsy: A Cautionary Tale
A decade ago, when Robert Kalin started Etsy (in Brooklyn, NY, of all places), it was a hipster haven. Etsy started out as an online boutique welcoming a diverse community of solo artisans (before they were actually called artisans and still called craftspeople) to sell handmade creations without having to pay huge fees. You would think of Etsy when you wanted to find a really special and unique gift for someone really special and unique.
But you might not think of Etsy for that one-of-a-kind gift anymore because, in 2013, Etsy changed its selling policy. It had grown by leaps and bounds into a global craft e-commerce site and in an effort to keep up with demand, while keeping shareholders happy, opened its virtual doors to third-party manufactured products. Etsy now has over one million shops. Sounds great, right? Except that now those independent artisans, who were once the focus and essence of the company, are forced to compete with middlemen selling $ 3 watches.
When the board of directors decided to change Etsy’s selling policies, they signaled a shift in loyalty away from the artisans and toward their shareholders. The major problem (besides treating loyal sellers badly) is that a lot of customers shopped Etsy specifically to support these independent artists. These conscientious customers quickly started shopping elsewhere. Etsy lost its essence.
Since 2013, the brass at Etsy seems to have realized their misstep and tried to return to their roots. The policy currently states that everything sold on Etsy must be handmade, vintage, or a craft supply. But it’s hard to come back once you’ve lost credibility in this way. Most of those early customers are probably never coming back.
Etsy is a huge company, but there are still lessons here for small business owners:
1. Loyal customers are like gold.
Loyalty is defined as a willingness to make an investment or personal sacrifice in order to strengthen a relationship. For a customer, that can mean sticking with a supplier who treats him well and gives him good value in the long term even if the supplier doesn’t offer the best price on a particular transaction.
While regular customers aren’t always the most profitable for a business, their choice to stick with a product or service can reduce a company’s customer acquisition costs. Loyal customers are free advertising. They talk up your company to friends and family. In referring you, they are doing more than indicating your company’s economic value; they are putting their own reputations on the line. If you treat loyal customers like gold, they can become, in effect, your marketing department. Of course, there’s no substitute for a great marketing team who can help you figure out how to treat loyal customers right!
2. Scaling your business doesn’t have to mean losing touch with your roots.
At Spring Insight, many of our clients find us at the point where they are ready to transition their businesses to the next level. During our initial interview, whether on the website side or on the marketing side, we walk the client through a fairly lengthy questionnaire designed to give us a window into the essence of her business. That’s because we want to help you scale up in a way that respects your vision.
Scaling your business may mean changing policies, staff, and internal processes. But all of these changes should be done with a strong respect for your brand, which is your most valuable asset. This means really giving thought to the changes you make so that you can reinvent your business without recreating it and removing the essence of what makes you truly valuable.
3. Your brand is so much more than your business’s name and logo.
As long as you keep true to your essence, your users and customers will see your brand expressed in every aspect of your business from customer relations, to management, and even staff attitudes and logistics. Taking steps to ensure that a strong brand identity is reflected in the growing culture of your business and in the policies, which you put in place, ensures that your business grows into a bigger version of itself, rather than into a company you don’t recognize.
My visit to Sun Studio reminded me of the importance of protecting what has always been special about Spring Insight. Now that you understand the importance of protecting your business’s essence, are you ready to take the next step and grow your business?Business & Finance Articles on Business 2 Community