SOWHAT

TIME REQUIRED30 Minutes

essential previous learningPoints of Difference

The ‘So What?’ Test

Do your points of difference pass the test?

Key Learning Outcomes

  • Understand that your customers are your business’s main priority.
  • Determine what your customers want and why they buy from your business.
  • Identify your products’ and services’ points of difference and assess if they pass the “so what?” test.
  • Obtain some tips for passing the “so what?” test from our scenarios and examples.

Article

Once you have defined your points of difference, it is important to make sure they pass what we call the ‘so what?’ test. Too many businesses can rattle off a list of their points of difference without much thought as to what their customers actually want or why they buy from them.

Theodore Levitt, a world-renowned economist at the Harvard Business School and editor of the Harvard Business Review for many years, is considered one of the founders of modern marketing. In one of his most famous works ‘Marketing Myopia’, Levitt posed the question “what business are you in?” This article, first published in 1960, looks at how businesses and even industries can collapse when they fail to consider the customer as their number one priority. In the article he outlines how the railroad industry was once an economic powerhouse that declined due to the failure to understand the basic need of the customer – transportation. This need for transportation did not decline over time, in fact it grew; however, the industry allowed competitors, such as airlines, to fill this growing need. They allowed other industries to take their customers away as they failed to understand that they were in the business of transportation rather than the railroad business.

One of Levitt’s famous examples that is still quoted in marketing courses today, relates to drill bits. He asks the question, “if you are selling drill bits what is your customer actually buying?” Levitt suggests not the drill bit but the hole that it makes. If you take this further you are not in the ‘hole’ business but if the holes are being used to join things together with screws then your business is the ‘joining business’.

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