What Your Customers Really Want (Hint: It’s Not Just Price!)
Does your business have what it takes to consistently win in today’s market? How about keeping your customers loyal? If you think the price of your products or services is the reason you are attracting or not attracting and maintaining customers, think again. Today’s customers are savvy and want much more from their relationship with your company than just a low cost.
Customers are looking for relationships that deliver unique value. Yes, they want your products to solve their problems, but they also seek a level of satisfaction that goes beyond the intrinsic value of what they paid for. By learning to tap into this deeper level of emotional satisfaction, your business will retain its current customers and you will uncover a steady stream of new customers as well.
Are Your Customers Loyal?
You may have asked your customers if they are satisfied with their purchase from your company, but the true measure is whether your customers are actually coming back. In an average customer poll you may find that 8 or 9 out of 10 customers are satisfied. That sounds great. Studies, however, show that only 4 or 5 purchase from you again. Why? Because rational satisfaction (they were not displeased, the product worked, etc.) is only part of the equation. Customers who purchase again are emotionally satisfied. Moreover, emotionally satisfied customers will also recommend your product or service to others.
The bottom line on measuring loyalty is based on answers to these two questions: (1) How many of your customers intend to purchase again? (2) How many of your customers would endorse your company to others?
Creating Exceptional Value
Exceptional value is created when your customer perceives your product or service to be worth more to him than the price he pays. There are two components in any strategy for creating exceptional value with customers. The first is how well you are communicating the unique value of your products and services as compared to alternative solutions in the marketplace. This is important and is likely to result in high rational satisfaction. However, it takes emotional satisfaction to develop a loyal customer. The second factor—building deeper, trust-based relationships—is the key to emotionally satisfied customers.
This happens when your employees show that your organization understands customers’ needs, delivers more than is expected, and helps them achieve their goals.
Exceptional value stems from exceptional employees. Your people are the “secret sauce” in your organization’s ability to deliver on its value promise. You have to hire and retain the right people to make it work. These employees are those who do not need management mandates to engage customers and adhere to company values. These employees are your customers’ problem solvers. They provide the discretionary effort and intellectual capital that can take your customers from satisfied to loyal. Moreover, studies have shown that an increase of only 5% in customer loyalty can add 25% to more than 100% to your bottom line!
Tapping the Emotional Fountain
Developing emotional satisfied customers who enjoy extrinsic value (beyond functional benefits) might seem like a pie in the sky ideal but there are many world examples. Think about a Rolex watch and what you feel when you see one worn. Any watch can give you the time, but they aren’t a Rolex. What captivates us about a Rolex isn’t its function, it’s the prestige. A Rolex suggests more than your need to tell the time. It says that you appreciate the finer things. It shows that you have earned enough success to purchase one. It means you are knowledgeable about the value of the craftsmanship and precision it represents.
That is the connection you should seek to develop with your customers. You want to deliver more value than the functional benefits inherent in your product or service. You want your customers to experience the extrinsic value you bring to the relationship by being emotionally engaged throughout the buying process.
It Pays to Be Ethical
A recent USA Today poll revealed that 72% of people will pay more to use the services and products of a company they perceive to be ethical. An easy example of this for consumer products is the higher prices that consumers pay at eco-friendly stores like WholeFoods. For service-based businesses, think of the movement of customers away from the megabanks that charged hidden fees and left customers navigating though a labyrinth of automated phone systems to credit unions and community banks where a real people answer the phone with a sincere interest in your situation.
These are examples of how the perception of ethical business practices can make a difference. It reflects the impact of emotionally satisfied customers. People feel better about themselves when they believe they are dealing with an organization that cares about “doing the right thing”.
By optimizing the key performance drivers of value creation, you can successfully tap the emotional bonds of your customer relationships. This takes the right people, the right process, the right leadership, and the right commitment. The investment your company makes in enabling and aligning your team with the skills, attitudes, beliefs, and values that develop loyal customers will enrich your core business and provide new opportunities to gain customers and market share. Stay engaged and stay ethical in your customer relationships and you will transform your business.
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