There was a time when having consistently satisfied customers kept us ahead of the competition. Those were the days when the differentiating power in the market was in products and services. Now, as we become more and more accustomed to our EXPERIENCE economy, we begin to accept that the quality of our products and services rarely differentiate our brand. Quality products and services are now common, expected, minimum business requirements – table stakes. Brand differentiation and loyalty now come by way of our experience while consuming the product, service or brand.
I often ask in my seminars: “what does Barnes & Nobles sell?” The reply is usually: “books”.
The truth is that I could do research for my next book at B&N for the next year, using their tables, sitting on their chairs, with clear access to all the books in the store, and never have to buy a book. If B&N were really selling books, after a couple of days, they would ask me to buy something or leave. But they don’t. In fact, they are not selling books at all. In stead, they are selling experiences and hoping that while we are consuming their experience (nice chairs while we read, a coffee shop, poetry readings, a children’s reading area, etc.) we will see a book we like and buy it. Statistics show we do.
If we know our customers now value and are willing to pay more for experiences, but we continue to offer them marginally differentiated products, we should not act surprised when they ask us for a lower price. Over 50% of the CEOs I speak with, actually believe customers DEMAND lower prices. In most cases these CEOs are the source of unnecessary commoditization and failing businesses. If we offer someone what they no longer value why would we expect them to pay a premium? As long as we continue to try to differentiate our brands by the feature/price ratios, we will always be “me too” brands.
Let’s get to know our customers and their values more intimately. Then let’s create experiences for them that result in emotional bonds with our brand. I know the temptation to simply lower the price is great since no one ever says no to a lower price, but I also know if we are willing to think about our customers, talk to them, ask probing questions with humility and a sense of service, we can get to understand their values, those things that really matter to them; those things that will engage them emotionally and make them loyal.
Aligning our companies to our customers’ values is the only way we can gain sustainable differentiation in a commoditized market.
Alignments require the management of only a couple of key components: Customer Values, Corporate Purpose and Corporate Goals. Align these three and magic will happen.
Customer loyalty is never an accident.
Committed to XCL