Business Models Matter

Have you had frozen yogurt lately? Have you noticed all the new frozen yogurt stores popping up in your neighborhood? Frozen yogurt is blowing up again. It’s experiencing a resurgence from the 80’s and 90’s when TCBY was king of the block.  So what’s created this new found popularity in frozen yogurt?

It’s the business model.

Yogurt itself hasn’t changed much in the past 25 years.  There are some unique flavors and the stores are a bit more hip, however in the end the product hasn’t changed enough to drive a resurgence. What’s causing this new found love for frozen yogurt is the business model.  Most of the new frozen yogurt stores are self-serve.  This means customers pour their own yogurt from a number of yogurt dispensers along the wall.  They can mix and match flavors till their heart is content.  Sweet carmel and mango, no problem. Coconut and cookies and cream, have at it. Customers create their own concoction. In addition to self-serve, the stores also offer a plethora of toppings, everything from fruit, gummiebears, chocolate beads that melt in your mouth and more. Yogurt fans can pile up on what ever flavors excite their pallat.  Don’t worry about cost, the yogurt is priced by weight.  Put as much or as little in your cup and the scale will tell you what you owe.  It’s an entirely different frozen yogurt business model.

Frozen yogurt has been pretty much dead for the last 15-20 years.  Over the past few years it’s been blowing up and stores continue to pop up all over the place. The reason is the new business model. It gets all the credit in my book. All the benefits of frozen yogurt are still there; it’s a healthy alternative to ice cream, it’s lighter and more refreshing etc. But those benefits were played out in the 80’s and 90’s. It’s the new business model that breathed life back into “fro yo” as the industry calls it.  What makes the new business model work is it creates an experience for customers.  Customers participate in the process, use their imagination and get to “own” their own concoction.  It’s a playground.  It’s the perfect model for the frozen yogurt industry’s target customer; mom’s and kids.  In addition to the customer benefits, self serve reduces staff costs, increases turn rate and improves the customer convenience factor.  There is nothing more frustrating than waiting in line for ice cream on a hot, busy, Saturday night.  The model works.

Business models matter.  They can make or break a good idea, an old idea, or a new idea. The idea can only goes so far. The business model is what brings the idea to life. Where would Twitter be if it had relied on the desktop? How good would Foursquare be if you had to tell the application where you are, rather than it determining it for you?  Business models matter because they create the experience and it’s the experience that drives adoption.  Product experience has never been more important. Business models affect the experience. Business models matter.

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