4 Myths about Customer Value

The purpose of business is to create and retain a customer.

Much has been written about customer orientation, customer relationship management (CRM), Customer Lifetime Value (CLV) metrics, Customer Centric organization models, customer retention, customer care-add any high sounding word with -customer- preceding or succeeding that word and you have a new model, a new theory. Headline hitting books, celebrity author seminars and training till another theory comes along.

And we see the poor customer is still the most dissatisfied lot (that includes all of us specialists too, as customers).

What a manufacturer or service provider often thinks as a market or value proposition, customers respond in a diametrically different fashion. Why does it happen?

While business thinks in terms of products and derived values, customer is looking at satisfaction. The key question is whether all the strategy, product features, add ons and value creation lead to ultimate customer satisfaction.

Now this may seem a little contradictory. To illustrate it better let's take the example of Cell phone services. Companies are rolling out a new product every fortnight offering more value, in their perspective.

Then the point is why does the customer keep switching over to different service providers and products or packages so often, if the products are offering value.

The key here is more value propositions are being rolled out without looking at the very basic. Whether the value proposed gives satisfaction to the customers. If not it is not valuable. The customer is buying satisfaction. Highest value is derived when the customer is fully satisfied with his purchase.

Some common myths in Value Creation

Myth # 1 More is often considered value

Buy one get one free schemes are rolled out. There is of course an instant sales push. However at the end of the scheme the customer feels that he had all along been paying 100% more for the products and perceives that very product as costly once the scheme is withdrawn. May switch to another product at the same price. Conclusion: Dissatisfaction leads to value erosion

Myth # 2 Price is value

Many business considers lower price as offering more value. More often than not lowest price products end up as the second best with a higher priced product with similar product attributes leading the market. The simple reason is the higher price product may be offering a higher satisfaction due to perceived values and imagery. Car markets are a prime example of this syndrome.

Myth # 3 More Features or add ons are value

Businesses load a product or service with more features thus offering a higher value. While this may be attractive, if the features are not backed by adequate supports the satisfaction may be less and value is reduced. We encounter this everyday. A customer buys a product with many features but not demonstrated properly or may not be serviced properly. Enquiries may not be handled effectively. Airlines offering add ons like free overnite accomodation are still not favored if the services, like enquiry handling, reservations, and time schedules are poor. Cell phones companies may be offering plenty of add ons like national roaming or free incoming calls etc. However if the billing is poor and billing enquiries are not addressed properly the customer is dissatisfied and leaves the service for another provider.

Myth # 4 Products are competing with similar products

This is often true in the leisure industry. A movie theatre may not be competing with another movie theatre. If the customer is not satisfied with a theatre or movie he may look at options to other entertainment sources, for instance an amusement park. We may call them discretionary time products. Highest satisfaction levels are very important in this type of business.

These are some of the examples of how businesses can go totally wrong in assessing value. While it is all good to talk of value creation some thought must go into the major ingredient in value that is the customer satisfaction.

And are business really serious about customer retention. As even a novice to business knows it is far cheaper to service and retain existing customers. The cost of acquiring new customer is very high.

Now how many business have consumer satisfaction index to monitor this prime factor in customer value creation

R.G. Srinivasan is founder of Born to Win Forum. He is a certified trainer and 0nline marketing promotions consultant. Check out his webpages at http://venturelinks.tripod.com

---

Have You Hugged a Customer Today?

It all started a couple of weeks ago when a... Read More

Small Business Customer Service Can Work Against You

Is the special treatment you designed specifically to keep customers... Read More

If Everyone Thinks They Give Good Service, Why Do We As Customers Think Its Poor!

First of all let's look at what customer service is... Read More

It?s Customer Service Stupid: Delivering Customer Service Training That Sticks

"Society is always taken by surprise at any new example... Read More

Customer Service and The Human Experience

Historically, customer service was delivered over the phone or in... Read More

How To Use Your Current Customers

Jay instructed a customer of his to offer a rare... Read More

Customer Satisfaction Is Your Business

Regardless of what business you are in - you are... Read More

The Drawback of Hacking Off a Blogger Through Weak Process Gaps and Pathetic Customer Service

With all of the recent data theft in the financial... Read More

Customers - What They Really Want - 6 Secrets of Customer Service

What customers really want can be divided into two areas.Firstly... Read More

Customer Service: Everyone is Fighting Their Own Personal Battles

Relationships... Money... Health..The Past...Failure..Mental and Spiritual Battles..Time Constraints...Professional pressures..At any... Read More

How To Build Stellar Client Relationships

Your opportunity to build a stellar client relationship starts with... Read More

Take Care of Yourself Before You Take Care of Your Customer

One of the most important questions people ask when they... Read More

Provide Exceptional Value - Grow Your Business

The primary objective of a business is to get and... Read More

Making Your Contacts Work For You

The best way to explain this concept is to tell... Read More

Invalid Excuses for Poor Business Results - The Weather

Note to Kmart: It wasn't about the weatherIn the 1970s... Read More

Dealing with People - Words to Avoid

You probably realise how the wrong tone of voice and... Read More

Be the Customer: See Yourself as Your Customers Do

What do your customers experience when they interact with your... Read More

Client Appreciation - It Means Everything!

Want to know the secret for keeping your clients forever?... Read More

Clients - What They Want from You

A growing number of individuals are finding themselves called to... Read More

How to Retain Your Customers the Dish Network Way

Customer retention is vital to a business. If you cannot... Read More

What Every Employee Should Know About How to Win the Loyalty of Customers

Dr. Michael LeBoeuf, in his cassette album entitled, Win... Read More

Make Sure You Get The Customer Perspective

Businesses that fail, often forget to seek out the customer... Read More

How To Handle Customer Billing Snafus

Q: I just discovered that for the past six months... Read More

Under Promise & Over Perform: The Art of Managing Customer Expectations

I'll always feel warmly about Conrad's restaurant, in Glendale, California.On... Read More

How Do You Create Customer Loyalty?

Another sad fact of life is that these days, very... Read More

Are You A Coward? I Was

Over the last month, I have come to hate emails... Read More

RETAIL GREETERS: Sales Builders or Customer Turnoff?

Do you need greeters or should you avoid them? That... Read More

Making Customer Satisfaction Surveys Work

Why bother? Good customer service is the life blood of... Read More

My Child Has Opie Eye!

7:00 a.m., the silence in the house is broken by... Read More

5 Ways Customer Service Managers are Implementing to Increase Customer Focus

According to a Forum Corporation survey of commercial customers lost... Read More

One of the Secrets of a Great Customer Experience

A few weeks ago we conducted our annual "Customer Experience... Read More

What Every Employee Should Know About Putting Positive Phrases Into Customer Service

If you were a customer on the telephone with a... Read More

Customer Service Tips for Mail Order Businesses

Can we be too good to our customers?... Read More