It’s The System Stupid! (Not the Product!)

Most businesses focus their attention on the products that they offer.  What do they look like? What is the design? What is the best price we should offer it for? But these are questions everyone asks.  This is true not only when you are developing a new product, but as you continue to market old ones.


More important than the product itself, however, is the system that surrounds the product.  When Apple began to consider the development of digital MP3 players, there were many competitive products in that space.  In fact, Sony should have been the hands-down leader in the marketplace. What the businesses that offered digital players were not focusing on was that it wasn’t just the ability to play music that customers were interested in, nor was  another digital player the real opportunity in the marketplace. 


The real problem with digital music was the overall difficulty in managing one’s own music.  The producers of digital players were thinking about the hardware, not the real problem.  They should’ve been thinking about the overall system.  MP3 owners had trouble locating, buying, downloading and managing their music library.  The unique thing that Apple did, in order to make the iPod so successful, was to integrate all of the music management operations into one easy–to-use system.  Yes, the iPod was cool looking and the presentation for it was modern and hip, but the product wasn’t just the iPod.  The product was the whole system: the iPod, iTunes and even the integration of all of the tools within the Mac itself. Where the other MP3 player producers had seen a unique new piece of hardware in which they could have a competitive MP3 product, Apple saw the big picture — creating the music system around the product.


The concept of system creation is certainly not new.  The very essence of the franchise industry is centered on the process of designing easy to use systems that anyone can follow.  The story of McDonald’s is a prime illustrator of the theory of system success.


McDonald’s wasn’t the first seller of hamburgers or milkshakes.  However, what Ray Kroc did that others had not done before him was to create a system that allowed the different operators to deliver to the consumer the exact same product, no matter who was cooking the hamburger or shaking the milkshake. The result today, based on the initial design of a system and the perfection of that system, is the reality of thousands of McDonald’s throughout the world.  Amazingly, because of the system you can go into any McDonald’s, wherever you are and the consistency of the products will always be the same.  McDonald’s may not make the best hamburger, but they do have one of the most consistent systems in business history.


These two examples highlight the theory that great success is more attributed to the system delivering the product than it is to the product itself.  As a business owner, you should establish a specific methodology within your own organization to periodically review products and ask yourself the question,  “How can I create a standardized system that effectively markets and delivers this product over and over in a successful fashion?”  This doesn’t mean that you run out tomorrow and change all of your marketing and sales processes.  If you do, you will probably face disaster.  Instead, look at some of your products that may be underperforming and begin to make changes to create a marketing and sales process that constantly delivers the same product in a manner that gives your customer new benefits that they want.


The other opportunity for each of us in business is to take a broader look at the marketplace we are in, to see if there are other products that we could add to our mix that would be better delivered to the consumer with a system.  Let’s look at the pizza industry for an example.


 There have been many changes over the years to the pizza industry as it grew from mom-and-pop restaurants serving pizza to the major chains of today.  In many cases, these chains became successful because they created systems that were attractive to the consumer.  Many years ago, Domino’s bought market share from the mom-and-pop restaurants as well as chains such as Pizza Hut by delivering pizza in 30 minutes or less, or it was free. In this case it was not the pizza that was changed; it was the system surrounding the product that was altered.  If we revisit the pizza industry today, we see that there is little distinguishing one pizza offering from another.  While there may not be a great opportunity to make a new pizza that is more attractive to the consumer than the ones being offered, there is probably another opportunity for the system surrounding the pizza.


One such example can be found in a restaurant called Diana’s Gourmet Pizzeria.  Diana takes aim at several standards of delivering pizza to the consumer and creates a new type of system around it in the process.  First, she introduces the concept of “personality” into the system.  Diana promotes herself as well as the pizza.   She adds personality to the pizza and by doing so carves out a position that makes competition difficult.  Yes, you can buy pizza, but the only place you can buy Diana Coutu’s pizza is at Diana’s Gourmet Pizzeria. Diana even offers a simple but effective guarantee to pizza, “You’ll love our pizza or it’s free.” 


In addition to the personality Diana has injected into the pizza industry, she has also added other unique marketing ideas to her system.  Diana offers membership levels and royalty rewards programs.  For example, if you are in a silver membership plan you pay $25 a month, but you get $30 in credit each month to order pizza, gold members pay $50 a month and get $65 a month in pizza and platinum members pay $100 a month and get $130 a month worth of pizza.  Additionally, if you are a platinum member, you get exclusive access to a private telephone number that no one else gets that gives your call priority access and bypasses the regular queue system.  Most importantly, your order is moved to the front of the line, ahead of all other orders.  If you have ever waited for your pizza order to be taken and processed, you know that this is one area of the system that many people will love.


Diana also takes her pizza system to a new level by writing a monthly newsletter called The Pizza Press that is delivered to her customers and prospects.  The newsletter adds the personality of Diana and her family, while at the same time gives advice about pizza and the all-important coupons. I predict it won’t be long before someone takes note of the unique system  Diana has created to deliver product and takes it worldwide.


The next time you think about adding any product or service to your business, think about a unique system to structure around the product that delivers it in a manner that is both unique and beneficial to your customer.  If you create a system, you will find that leveraging the product is easier and the opportunities for rapid growth of the product are dramatically increased.