“I-Know-It-When-I-See-It Value” is the Key to Best in Market

In “Ten Steps to Keeping Your Customers Loyal”, Joe Calloway begins with a story about the Acme Widget Co. Acme needed to increase revenue and profits so they initiated a new ad campaign and offered special deals to first time buyers. Buyers responded but, Acme management found that their revenues and profits actually fell. According to Mr. Calloway, Acme made a classic blunder. “As new customers came in the front door, existing customers were leaving in greater numbers through the back door. They had violated one of the most important rules of business: Never take your customers for granted.”

Mr. Calloway goes on to cite 10 tactics for keeping customers loyal. For the sake of brevity, let me headline the ten tactics:

1. Take a big picture approach. Demonstrate how your product or service can help them accomplish their big-picture, long-term goals.

2. Speak their language.

3. Be a source of intelligence.

4. Know who the customer is today, not yesterday.

5. Point out what an incredible deal they are getting.

6. Make it the first six weeks again.

7. Make them tell you how to be better.

8. Find out who is trying to break you up.

9. Continuously audit your “easy to do business with factor”.

10. Have a face-to-face, heart-to-heart “thank you” session.

While I have no quarrel with the main point of the article about keeping customers, I do have some concern about the tactic approach. Buried in the ten tactics (number 5) is the real issue for keeping customers. The expanded version of number five reads:

Point out what an incredible deal they are getting. What are you doing for your customers that provide value, but that they may not know about? Let them know what you’re doing that goes above and beyond the expected.

Let’s not make this any more difficult than it needs to be. Customers that continue to buy from you will do so as long as they think they are getting a good deal. They know if they are getting a good deal or not. They don’t have to be told.

This is the “worth it” question that the seller has to be able to answer. Is my product or service “worth it”? One of the scariest things you can hear is you customers saying, “Don’t buy Acme’s widget, it’s not worth it”. Again, if your widget is worth it you won’t have to tell them about it. In fact, your customers will be out there telling everyone else about the good deal they are getting.

A lot of firms will tell you about their value. You see this in advertisements all the time. In fact, we have trivialized the idea of value by using it to describe “value meals”, “value vacations”, “value shopping”, etc. Typically, this means cheaper or less expensive. It does not mean higher quality at a fair competitive price. Creating and delivering real, discernible, I-know-it-when-I-see-it value is the key to becoming best in market – it is what competition is all about. In order to be best in market, Acme needs to be able to capture how its targeted product/markets define value, drive this information to the key strategic and operational areas of their business and deliver a level of value that will grow their market share. This is the essence of being best in market.

Most Acmes will not have the necessary capability to do this. They will have to develop the capability or import it. This is where Six Sigma Marketing comes in. SSM provides the bridge from a focus on low cost operations to high revenue market performance. It does this in a structured disciplined way that is driven by the voice of the market (VOM) and not what managers think value is. I encourage all of you to ask the critical “worth it” question and answer it honestly. If you are not currently best in the market or on your way, more than likely your markets are telling you that you are coming up short.