Dunkin Donuts or Just Dunkin – What Are They Selling?

Know What your Customer is Buying

Dunkin’ Donuts dropped Donuts from their name and logo because their customers are primarily buying coffee and other beverages. (see earlier blog post) But drop back to the question of what the Dunkin’ customer is buying. OK – a cup of coffee. But they can make it at home or go to Starbucks.

The recent dialogue my friend Larry Gulko, well-known Brand Strategist and CBS Boston media personality, had with former Dunkin’ Brands CEO Nigel Travis as part of an Entrepreneurship conference at Babson College described the strategic shift Dunkin’ has made to better align with what their customers are buying.

Harley Davidson is selling freedom. The Dunkin' customer is buying convenience. The customer who wants a place to hang out and read the NY Times will go to Starbucks. A more direct competitor to Dunkin' is the convenience store that is losing revenues from declining cigarette and gasoline sales and needs to raise beverage revenues.

Travis described how Dunkin’ introduced the drive thru, modified the store layout, and simplified its menu to make the customer stop faster and simpler. Dunkin’ is competing against Starbucks, the convenience store, the gas station, McDonalds, and your kitchen by being the choice you will make when convenience is the primary product you are buying. Following the same strategic concept, Dunkin’ kitchens in large buildings are coming so deliveries can be made directly to customers. They will not have to leave their apartment or office.

In the past, all Dunkin’ customers went into the store, bought a coffee, and left. Nigel Travis learned the value of knowing your customer from running Papa John’s Pizza before going to Dunkin’ Donuts. Pizza delivery allowed the company to know its customers and sell to them directly. Customers can go to the Dunkin’ website today and place an order – no waiting in line – or post their birthday and get “a free beverage.” Dunkin’ now knows who their customers are and can sell directly to them. Knowing, engaging, and embracing the Dunkin’ customer is the company’s path to success.
What do coffee and donuts have to do with your business?
Your company makes fiber optic cables, sells cyber insurance, or machines specialty parts for automotive companies. Do you know what your typical customer is buying when they purchase your product or service? Could be absolutely reliable, on-time delivery; low cost, OK quality; specialized components fully integrated into their evolving technology; or a backup supplier to their primary supplier.

Know your customer and know what your customer is buying from you.
Too often, we do not understand what our customer is hiring our product to do for them. Your firm will be more successful if you build your business strategy around what your customer is buying.
Sailing on the Charles River, Boston
I believe we are safe saying that summer has come to Boston after the wet and cool season. Sailboats on the Charles River separating Boston from Cambridge are part of the scene. Here is the view from the MIT sailing dock looking cross the Charles towards Beacon Hill.

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