Let’s begin with the biggest contradiction: Businesses purport to put customer value first when in fact they always put shareholder value first, but if you are in it primarily to satisfy your shareholder, then your success will last as long as:
- Your shareholder remains satisfied with the value [only monetary] they gain from your products and services. Think of how fast they move when a leader sneezes – you may recall Gerald Ratner, who wiped £500m from the value of his jewellery business by saying “…it’s total crap.”
- You find and retain enough customers who are satisfied with what your shareholders decide to offer in value and experience.
So if you are satisfying only the shareholder and the market is of sufficient size, then “Well done you!”
Maybe say a prayer that you are unique enough for long enough for it not to matter when competition comes in or customers drive the buying process, or the intermediaries arrive and the control shifts (e.g. Uber, Booking.com).
Control of the service is in the hands of the player who brings and controls delivery of the greatest value in customer expectations and experience!
Customer Value is ensuring the Experience exceeds the Expectation, within which reside 5 levers of control:
Who holds the levers of control in the game of Customer Value?
Master-brands and super-products
Apple and its Apple-lites, Microsoft and Office users, Starbucks and Star-strucks – are glued together in love and hate. The former owns 100% of the control and encourages the latter to become dependent acolytesˆ.
In the master brand product space they control everything: product, price, place, promotion and performance.
What about intermediaries?
Is it only major brand names that hold control of customer value, or does it apply to intermediaries as much?
Is it Uber or the taxi driver, is it Booking.com or the venues, is the doctor or the private medical scheme?
If the product/service you offer is generic and the customer can get it anytime, anywhere and at a better price then the control of customer value shifts.
If doctors own the prescribing of drugs and admission of patients, yet private medical schemes (PMS) own the customer contract and the range of services doctors and hospitals will be paid to deliver, then who controls the value delivery – the doctor, the hospital or the PMS? Is the balance of control in the right hands?
If Uber steps in and offers immediate taxi services at low costs, contracts all the drivers, sets the tariffs and flexes them at peak / off peak times, then who delivers most of the value and control of the service? Is the balance of control in the right hands?
Do intermediaries control and throttle the customer value and you are just another generic service provider?
As a product / service provider ‘who’ is your real Customer?
The shareholder, the intermediary or the consumer?
If you are completely driven by shareholder value, then your customer is the shareholder and you just have other stakeholders – consumers and intermediaries.
If you completely orbit around intermediaries and their policies on product, price, place, promotion and performance, which effectively set customer expectations and measure the experience, then your customer is Uber or Booking.com, as you are just scoring whatever they score. Do you treat these intermediaries as your primary customer and the consumer is just an end-user?
If companies march to their measures and price, promotion, place, performance are set by the intermediaries, then who is running the business?
…and which of these customers / stakeholders is truly optimising the value proposition in both expectations and experience?
Shareholders? …who without taking any major risks just want the dividend guaranteed or will drop and swap in seconds ( a little sarcasm here )
Intermediaries? …who without producing a single product, grabbed enough to control the game through price, place, promotion or performance.
So what next and can the control of the levers change?
Well, YES…….. if you decide to cause it to.
In terms of master brands, you will probably not chase and replace them through product because you probably do not have the resources, research and development budget, the money etc… unless you invent something incredible they cannot replicate.
You are probably better to innovate something shareholders cannot resist, intermediaries cannot replace and your competitors cannot follow.
You have to take control
You have to control product, price, place, promotion and performance.
This is how value is created before, during and after the Customer Expectation and the Customer Experience.
Your Value Proposition has to set this Expectation and your service has to deliver an Experience above and beyond it.
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Thank you for reading and do have a peak at our new centre in Greece, it’s a life changing experience.