MARKETING STRATEGIES: Where is the value for your customer?

Too often vendors see only functionality of the product or consumption of the service as the boundary of what they sell to the customer, without appreciating the context within which the customer makes the decision and uses the product or consumes the service.

If we have an overriding objective of securing the repeat sale or encouraging a referral, then we should be interested in every aspect of the customer interaction with the firm and the use of our products or consumption of our services.

When our focus shifts from functionality to customer satisfaction, we encompass every stage of the customer experience from recognition of need to the memory of the experience long after the service was consumed or the product disposed of. If in six months or six years, the customer was asked to reflect on their experience – what would they say? That needs to be our measure of the quality of the experience.

While we would always argue that value is in the eyes of the beholder, it is not difficult to ascertain from current and past customers what they valued in the overall experience. We need to move beyond solving the problem to looking at emotional impact, time expended, expense and physical characteristics of the experience.

What we need to recognise is that customers put a “value” on many attributes of an experience. I would argue that my time is of very high value, thus the time consumed in searching for information, evaluating a product or service, travelling to the point of supply, purchasing time and taking delivery is of extreme interest. Time I consider wasted because the information was not easily available, poorly presented or difficult to interpret or not easily evaluated is annoying to me.

On the other hand, I may find the shopping experience not only useful but enjoyable. Knowledgeable, efficient, friendly and readily available assistance when I am seeking clarification or purchasing can make all the difference to the purchasing experience.

For some customers, other dimensions of the shopping experience are important. They might value safety and accessibility or find the time shopping entertaining, educational, enjoyable, friendly and so on. The psychological dimension of the experience can have great meaning for some customers and they may make their purchase choices based on some of these dimensions when there is little to choose between the functional aspects of the product or service.

We see these dimensions play out continually in the case of restaurants. You often see two restaurants side by side and yet one is full and the other empty, even though the food served and prices are reasonably equivalent. Customers value their experience.

We don’t all value the same experience. I may like a quiet restaurant but others might like the energy and buzz of a crowded one. I may prefer to shop in a super store while others may prefer the intimacy of the boutique shop. I may prefer the self learning manual while others prefer the face-to-face classes.

The message here is that it is really all about the customer and what they want and what works for them. Once you know who your ideal customer is, you need to find out what they value and what their overall needs are rather than try to second guess it. Customer feedback across the entire customer experience is a necessary part of our marketing strategy. Unless we know what the customer requirements are, we can’t improve our service to ensure we are delivering the best customer experience we can.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia. A series of free eBooks for entrepreneurs and angel and VC investors can be found at his site here.