Are your customers demanding more, yet looking to pay less? Are you facing new and disruptive competitors from every direction? Are you being challenged as never before to differentiate your offerings and stand out from the crowd? If so, you’re not alone.
It may be time to think about the vital but often overlooked issue of customer value. If you’re not a commodity provider, and don’t want to compete solely on price, it may benefit you to revisit (and possibly rethink) your customer value proposition in light of market changes. As an innovation coach and speaker, I often find it’s the last thing that comes up in strategic planning sessions. To avoid disruption, it should be the first. Key reason: “customer value” is perception and is not permanent, but is relative and fluid. What satisfied customers yesterday may not satisfy today. Your customer has new solutions and business models to chose from. Winning firms make adding value a priority. “We invent by starting with the customer and working backwards,” notes Jeff Bezos in a recent Fortune interview. “That becomes the touchstone for how we operate.”
You can nudge internal discussions in the direction of customer value by asking yourself (and your management team) some important questions. What’s really producing value for our customers now? What new, tangible value have we added of late? And when was the last time we examined our overall value proposition with an eye to increasing our uniqueness and exceptionalness?
Use the six strategies below to strengthen your firm’s value-adding efforts – and start winning the value revolution today.
1. Take on the customer’s problem. Powerful things begin to happen when you go beyond merely trying to sell products and services. Instead, strive to understand the customer’s unmet and unarticulated needs. Are you the customer’s trusted advisor, advocate, problem-solver, coach and partner that you say you are? Value-leading firms start by walking in the customer’s shoes. They think deeply about the job customers are struggling to get done. They look for unmet needs and underserved customer groups, and they take action.
Example: BankPlus, in Jackson, Mississippi, took a fresh look at unbanked consumers in their region, those caught up in the payday loans lending cycle (typical interest rate: 400 percent per annum). Research revealed that a surprisingly large number of these people were police officers, teachers, health care workers and others who simply managed money poorly. They responded to this problem by creating CreditPlus, an innovative program offering low-interest loans to unbanked consumers, provided they enroll in a three-hour financial literacy seminar. Today, BankPlus is recognized in community banking circles for having taken on their customers’ problem. And for signing up a growing cohort of new and appreciative customers in the process!
2. Make the customer’s life easier. Every business (and every product offering) has a “convenience quotient.” The customer calculates it by dividing his or her desire for fulfillment by the hassle and annoyance (and time) that must be endured to complete the transaction. Ask your team: Are you easier or harder to do business with today than a year ago? Are your hours of operation reflective of today’s busy lifestyles? What about customer-irritating policies, procedures and complicated voicemail systems that block rather than enhance communication? Take action: Survey customers to discover the most frustrating aspects of doing business with your company. Consider offering extra measures of convenience and simplicity and you will add incredible value to today’s harried consumer.
Example: Car accidents are stressful. So Boston-based Plymouth Rock Assurance, pioneered Crashbusters, a program designed to lessen the hassle of the claims adjustment process. Their mobile claim representative will meet you at a time and place that’s convenient for you to assess the damage to your vehicle. The policyholder receives a check on the spot, so repairs can get underway. And if you want to outsource the entire process, Plymouth’s Door-to-Door Valet Claim Service provides one-stop fender bending repair.
3. Provide access rather than ownership. Access rather than purchase is the mantra of the Sharing Economy, and new entrants such as Spotify, ZipCar and Uber are transforming industry after industry. Incumbent firms can profit from this trend as well. Ask yourself: what do we currently sell that could also be made into a service? Look for more and more product categories to continue to increase in the years ahead, including automobiles.
Example: TechShop, based in San Carlos, California describes itself as a “health club for geeks.” Customers pay a monthly fee for access to its R&D labs, but don’t have to purchase or maintain expensive equipment such as 3D printers, laser cutters and oscilloscopes. With nine locations so far, the concept is attracting small businesspersons, students, and hobbyists of all skill levels, who gain access to expensive industrial tools and equipment without incurring the cost of ownership.
4. Empower the customer with knowledge. While the Internet brings access to unlimited amounts of information, it is unfiltered, unreliable, and does not empower. To take advantage of this strategy, consider ways to shift your firm’s focus from selling products and services to providing “know how” – news they can use. Data can easily drown, but knowledge (“awareness or familiarity gained by experience of a fact or situation”) is power. Your customer contact and sales professional’s knowledge can reduce the customer’s complexity and need to study, thereby speeding up decision making, Absolute integrity is required. Ask yourself and your colleagues: in what ways can educating customers empower them to do more and be more successful? And then: how can it be turned into our to strategic advantage?
5. Raise your firm’s empathy factor. Amazon’s Alexa robot is so human-like that some owners say “good morning” and “good night” and consider it a companion. IBM’s Watson is now able to co-produce movie trailers. Software is designing software. No less than 33 companies are busy developing driverless cars. As robots take over more and more jobs, and as social media isolates us into tribes, isolation and alienation are on the increase. What’s missing in all this? The human touch. Look for the pendulum to swing toward businesses that focus on enhancing their empathy factor. Ultimately only humans can build relationships of trust, demonstrate character, bond us together as humans and give meaning to experience.
Example: The Painted Cabernet in Santa Barbara, California promises to help you unleash “your inner artist – sip by sip.” Professionals and tech workers who’ve poured over computer screens all day, birthday celebrants looking for a memorable experience, and girls on a night out on the town all gather for paint-while-drinking classes under the direction of an encouraging, funny and empathetic artist-teacher. No wonder one of the fastest growing U.S. franchises is Paint Nite, which is taking the paint-while-sipping-wine concept nationwide.
6. Provide greater responsiveness. Winning businesses eliminate customer waiting by challenging time-based assumptions. They measure the time lapse between the customer saying, “I want to purchase” and when the customer says “thanks. Mission accomplished.” One way to put teeth behind your intentions is to offer time guarantees.
Example: Dr. Neil Baum, a New Orleans urologist, guarantees that if a patient is still waiting after 20 minutes of their scheduled appointment, he waives the charge for the visit.
Conclusion: Remember: there’s no such thing as a true commodity, there’s only a tired imagination.