Your customers are demanding more, yet looking for ways to pay less. You're facing new and hungrier competitors. You're being challenged as never before to differentiate your firm's products in a "commodity" market. And you're not alone. A seismic shakeup-a revolution-is altering the relationship between buyers and sellers. Many firms assume they must lower prices or perish. But such knee-jerk response is misguided. Instead, my research reveals buyers are actually looking for better solutions to their problems, rather than doing business with the low-cost provider. While your prices must be competitive, smart companies are focusing more keenly than ever on their value-added services to win the value revolution. Use these proven strategies to differentiate your firm-no matter how big or small it is.
Take on the Customer's Problem
Powerful things begin to happen when you go beyond merely trying to sell your products or services and become the customer's consultant, problem-solver, coach, cheerleader and partner. Example: Tyson Foods, America's top chicken processor, studies the problems of down-chain customers and develops product ideas that benefit everybody. When Americans began to turn away from red meat, McDonald's faced having an out-of-favor main product. Tyson sold McDonald's on Chicken McNuggets by demonstrating how the product could be integrated into its kitchens, then developed ways to prepare, season and deliver it-everything short of cooking it. Today, Tyson is the exclusive provider of McNuggets and is key supplier to 88 of the top 100 restaurant chains.Make the Customer's Life Easier
Every business has a "convenience quotient." The customer calculates it by dividing his or her desire for fulfillment by the hassle and annoyance that must be endured to do so. Are you easy to do business with? Are your hours of operation convenient? What about customer-irritating policies, procedures or complicated forms? Offer an extra measure of user-friendliness and you have added value to today's harried consumer. Example: Plymouth Rock, an auto insurer in Boston, smoothes the often-annoying claims adjustment process by having their adjuster come to you. After videotaping the damage, you're issued a check, all in about 20 minutes. The firm now holds the highest customer satisfaction ratings and the lowest cost of doing business of any auto insurer in Massachusetts.Empower the Customer with Knowledge
This is frequently the most cost-effective way to add value for customers. Often overlooked is the need for creativity rather than large marketing expenditures. Consider ways to shift your sales force from pushing products to providing solutions. In what ways can educating your customers be turned into your strategic advantage? Example: Miller Office Systems (Ft. Worth, TX) holds customer seminars on avoiding carpal tunnel syndrome, a repetitive-motion condition resulting from improper use of computer keyboards and other office equipment.Manage the Customer's Complexity
What if you can't differentiate on the basis of unique products or better prices? Then create unique value-adding services ht ingrain your firm in your customer's life. One way is by taking on unpleasant or complex tasks for the customer. Investigate how to reduce your customer's aggravation and costs at the same time. In the process, you'll become indispensable. Example: F.D. Titus & Sons (City of Industry, CA), a highly profitable health care products distributor, manages the inventory for doctor's offices and giant hospital chains alike, even going so far as to take its products right into the various departments within clinics and removing packaging materials. In exchange, customers agree to swing all their business to Titus, at negotiated prices.Provide Greater Responsiveness
Revolution-winning businesses eliminate customer waiting by challenging time-based assumptions-that is, the time between the customer's saying, "I want to purchase" and when the customer takes possession of the product or receives the service. One way is time offer time guarantees. What might your firm guarantee? Example: Dr. Neil Baum, a New Orleans urologist, guarantees that if a patient is still waiting after 20 minutes of the scheduled appointment, he waives the charge for the visit.Involve the Customer in Creating Value
Is a lack of affordability possibly affecting demand for your products/services? How under-served is the low end in your industry? What aspects of your service might customers be willing to do for themselves in exchange for lower prices? Example: Ikea, the furniture retailer, offers customers a unique value proposition. In exchange for prices ranging from 24% to 50% off what other retailers charge, customers agree to arrange transportation of purchases and assembly is required.Provide More Customization, Choice
The customer's ability to adapt your product to changing needs adds value to your product. Offer choices that make sense in today's market. Keep tweaking the mix in constant communication with your customers, sales force, suppliers and partners. Example: Boeing offers its new 777 jet in many combinations. The $115 million aircraft is designed so airlines can quickly and easily reconfigure cabins to meet shifts in demands, such as more or fewer first-class seats.Excerpted from the book Customer Service for the New Millennium by Robert B. Tucker, (Career Press 1997).
Robert B. Tucker is a Santa Barbara based professional speaker on the subjects of Future Trends, Innovative Thinking, and Customer Service. He is also the author of 'Customer Service for the New Millenium', 'Win the Value Revolution', and Managing the Future: 10 Driving Forces of Change. For more information please feel free to contact him.
Questions or comments? Post your opinions in the Bulletin Board, our bulletin board service.
Do you have an idea for an article? Interested in being an author? Submit it!
Please see our rules regarding submitting articles and ideas.
Copyright Interactive Training, Inc.
