Value...what do we value? What's more important, actual value or perceived value? Is there such a thing as too much value? Jennifer White in her excellent book
Work Less, Make More argues that we can add too much value into our companies and products or services. At some point, there is so much value that we "don't count" parts of it. Two things come into play: 1. What I call supposed value, and 2. What Mrs. White calls perceived value.
1. Supposed value is when we provide a bunch of stuff that our customers don't really want, or want but "don't count". We suppose that they need these things and it leads to frustration because we count them and our customers do not. I'll give you a few examples and you'll quickly understand what I mean.
1. A. Supposed value that customers don't really want.--Eliminate all these quickly.
Our Playstation 3 will play region 2 DVD's. For those of you who don't know what that is, here's a synopsis. The media world is divided geographically into 6 regions. Region 1 is the US and Canada. Region 3 is Japan, Europe, South Africa and the Middle East. Discs from regions other than your own have coding that prevents players in other regions from playing them. Often tourists are annoyed that DVD'd they buy in Europe don't play in the US.
My wife is happy that our Playstation will play her foreign videos. I suspect that she is one of a small percentage of customers who were thrilled by this news. In fact, it's likely that most people with Playstation consoles don't know what this means and don't care. Listen to that--They payed extra money for value that they don't care about. Sony got smart in latter releases of the same console--they lowered the price and eliminated this hardware. Now the blue-ray player we do value.
1. B. Supposed value that customers don't count.--Gently help your customers count these.
A friend of mine grew up on a large dairy farm. His father worked very hard to keep everything running well, but at the end of a hard day's work he always made it home on time. One day his father got stuck out on a job and came home over an hour late. When he arrived at home his wife was very upset that he was late and hadn't called. She thought the worst. He was never late, so he must be dead or injured. He was surprised that she was so upset...after all, he's never late. She should cut him some slack for this one occurrence, he thought.
They are both right. This is supposed value that this farmer provides every day. He counts it. and supposes that she will too. He works hard to come home on time. He leaves farm jobs unfinished to make his family a priority. She takes it for granted. She doesn't "count it"...unless it's missing. This is a case where "we don't realize what we have until it's gone".
Parents and children often have this problem of unperceived value. It can be very damaging to a relationship and happens frequently in close relationships. One party overvalues something, the other takes it for granted They are suddenly offended when things don't go as usual.
My wife and I often nip this one in the bud when one of us starts complaining that something didn't go as expected instead of saying, "I can't believe you didn't take out the garbage!!" we'll say, "Thank you for taking out the garbage all the other times.".
This is dangerous territory because we need to distinguish between what our customers don't want and what they do want, but are not counting so we can eliminate the things they don't need or want, and gently help them "perceive" the value of what they just aren't counting. Pray that you don't accidentally eliminate something they really do want but aren't counting. It can be tough to know the difference.
2. Perceived Value is that bunch of things that you provide that your customers love...they "perceive" or count the value even if it doesn't really exist. There are two categories.
2. A. Perceived value that customers don't really need, but value anyway.--You will want to eliminate anything that falls into this category that costs you more money than it brings in. Double down on anything that brings you more money than it costs (hype, fads, brands and one hit wonders fall into this category). These are what make rabid customers, but it can be fickle.
Beanie Babies. Need I say more? They are merely tiny stuffed animals, but when there was a shortage, people got injured at the mall trying to get their hands on one and were willing to brave weather, long lines and threats of death to get one. Just know that all good fads come to an end. For some reason customers perceived value where there really was none.
Black Pearls (Tahitian pearls). In the 1970's black pearls were considered inferior to white pearls (never mind that pearls are just parasites covered in layers of calcium carbonate-what antacids are made from). In the mid 1970's Salvador James Assael a pearl manufacturer if you could call him that, brought several black pearls to jeweler Harry Winston in New York and had them set in extravagant settings and placed them in the window next to expensive stones. This piece of sheer marketing genius created for these junk pearls a perceived value far greater than that of white pearls. This perception remains true today. Starbucks did the same thing with gourmet coffee.
2. B. Perceived value that customers need and love.--Run with these. It's your bread and butter. These are what create consistent customers.
What do you get at McDonald's that doesn't fall under the heading of hype from above? A consistent size, shape, look and taste (not to mention quality of meat, at least in cleanliness) to everything on the menu anywhere in the world. And you get it fast, to boot. Start messing with quality and customers will run for the hills.
How can you increase perceived value? Some ideas:
Find ways to gently point it out. I read a book once that said if you come in early and leave late, send your boss an early morning e-mail periodically so he might notice your sacrifice.
Under promise and over perform. I recently failed at this when I told my banker I'd email a document within the hour and then didn't get it sent for several hours. Now I look like a slacker. How much better to have said I'd have it by the end of the day and then send it in several hours instead?
Figure out what your customer wants and give it to them.
Surprise them. Front loading special bonuses makes a customer feel like you only have a bonus because you want a sale. Back loading special bonuses make a customer feel important or valued. They value you in return. Zappos routinely sends flowers with their shoes.
Inexpensive ways: remember names (of customers, kids, grand kids), use names, send a thank you email or note with specific information from a prior meeting, smile, say thank you, make a special offer for each customer group "just for people like you (new customer, old customer, young customer, etc.), communicate well, remember birthdays, remember special events (and mention them), point out features, refer out when you can't meet needs (keep a list of professionals handy).
The possibilities are endless. Get out there and exceed customer expectations and create perceived value.
