Business Model Innovator- Eliminate Harmful Costs_2402

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Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise,You are not allowed to view links. Register or Login, and The Ultimate Competitive Advantage. Read about creating breakthroughs through and receive tips by e-mail through registering for free at
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In the field of business model innovation, the top priority for today's CEOs and business owners, one of the three best ways to improve is by getting rid of costs that affect customers or other stakeholders in ways that create harm. Often those costs don't show up on your own profit-and-loss statement and balance sheet.
Some of the biggest opportunities come when you help with eliminating harmful costs that are between your customers and their customers. A lot of people will be stopped short by that statement: They have no clue how their customers interact with their customers or what the costs are that are involved.
Well, now is a good time to start learning. Let's look at an example that takes this perspective to show you what can be done.
Many organizations act as though costs that customers and beneficiaries experience aren't real costs. My dry cleaner, Marc Rosenthal, knew better. He was the first in his town to install a VIP service at no extra cost to customers. VIP customers could drop off their cleaning anytime by using a special key that provided access to a chute into which they could toss personally labeled laundry bags provided by Marc.
When it was time to pick up the clothes and linens, you were served in a special line and you found that your credit card had already been charged. You could usually leave with your cleaning within three minutes of arriving. There was no extra charge for this service.
Marc knew that VIP service also cut his costs: He was paid sooner, could serve his best customers in less time, and fill up slack time with handling the VIP orders. He probably lost fewer customers, too,You are not allowed to view links. Register or Login, to competitors with lower prices or who were open later at night.
Impressed by the example, I was floored to find out that the VIP service idea didn't originate with Marc. In fact,You are not allowed to view links. Register or Login, another friend of ours, Doug Ross,You are not allowed to view links. Register or Login, was the innovator.
Doug was one of Marc's providers for dry cleaning supplies. Realizing that most of his customers could buy supplies less expensively from catalog vendors, Doug began developing all kinds of programs to make his dry cleaner customers more profitable by cutting their costs in other ways and attracting more dry cleaning customers. In the process, Doug saw his market share climb while he helped his customers and their customers eliminate harmful costs.
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Business Model Innovator: Eliminate Harmful Costs
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