By | Scott Greenberg | www.entrepreneur.com
Ever heard a business owner say they’re in “the people business?” I hear it all the time. I make a living giving presentations to franchise systems, associations and corporations. I like to ask audience members to share with me what business they believe they’re in. Most people describe the thing they sell: “We’re in the automotive repair business” or “we provide software solutions.” Eventually, someone in the audience anticipates the answer they believe I’m looking for: “We’re in the people business.” Many will nod their head in agreement.
It’s a better answer, but still not good enough. Because what does that even mean?
Unlike computer networks that are driven by data, markets are driven by feelings. These feelings influence everything we do. How we spend money, where we spend money, how we work, how well we perform — all human behavior is informed by emotion. We still need stuff. We still need information. But it’s our feelings that most influence our choices. Behavioral economics is a whole field of study devoted to understanding this.
A typical business trades its offerings for money and considers the transaction complete. A “people business” works to make the transaction extra satisfying. That additional value breeds loyalty and retention. We like to be in business with others who make us feel good. Two types of skills are necessary to do this well: