Thursday, February 24, 2011

Value from the Customer's Perspective

Photo: Flickr

Someone left a flashlight in the recycling room yesterday. Sort of gross, but I decided to try and rescue it. It was just so Jeep-looking (yellow and black).

Plus it was free.

I sprayed some Fantastik on it, replaced the batteries and voila! It was clean and it worked.

That flashlight was a value.

Sat on the train the other day and looked up at the advertisements. There was the one for McDonalds' dollar menu. It said something like, "You're a great negotiator. We'll give it to you for only $1.00."

Pictured up there was: coffee that tastes watery (I've tried it); a processed white biscuit with sausage inside (I eat kosher but even if I weren't – just the sight of it made my arteries scream for mercy); and other stuff loaded with simple carbohydrates and sugar.

The kind of food that makes you get fat and go flying.

The kind of food that wouldn't be worth it even if they paid YOU to eat it.

McDonald's dollar menu is not a value.

Another food example.

Whole Foods had organic red peppers for $2.99 a pound. Yes, they overcharged me $3.99. But those peppers – man they were out of this world! The sweetness! I know I'm on Atkins induction forever, but those were the absolute best vegetables I have ever tasted.

I think I paid about $1.75 per pepper. I got two. And you know what? It was worth it! I felt terrific after eating them. I would gladly buy again.

So value does not equal cost.

What matters is really your frame of reference around value. What are your goals in life? What is important to you?

Then you decide if the cost of Item A or B makes it worth your while to purchase.

Let's flip this around and look at it from a marketer's point of view. Recognizing that we are all marketers of one kind or another, in that we all try to sell things, services, ideas, and so on, to others who have the power to help us stay financially afloat.

What is critical for you, as a marketer, is to understand very well what it is that your customer values – over the long term and over the short term. If you only understand part of the picture, you may be successful for a short time, but ultimately the relationship will not last and some other vendor will take your place.

An example. How this can play out, and not in your favor.

You are hired to be the social media director for a national brand of banks. Obviously their culture is traditional.

You know, very generally (or think you know) that the customers of this bank would like to see it be more transparent.

You say to yourself, "I will add value to this bank by delivering transparency to the customer." You go about setting up blogging for the CEO, Facebook, Twitter, YouTube, whatever social media you can get your hands on.

They are less than pleased. You last less than two months – and the first week was orientation.

In this scenario, you didn't understand the bank at all. You had no idea what their short- or long-term goals were, and thus what value meant to them. So your low- or no-cost social media campaign actually cost them a lot. Time, to hire somebody else who does understand their goals. And money, to undo the reputation "damage" they perceived.

You see, what they wanted – what was valuable to them – was complete opacity over the long-term. They just wanted someone to serve as a "cover." They wanted you to be their image of social media, so that they could stay quiet and blank. Maybe you could have launched a Twitter account to sell 6-month CDs, but that was it.

Sometimes the customer sees enormous value in things that have an exorbitant cost.

I'm still "kvelling" (Yiddish – marveling) over a recent Wall Street Journal article, "Who Buys These Clothes? They Do." It focused on women who pay thousands of dollars to buy couture straight off the runway.

This article was almost incomprehensible to me.

In a day and age when every fashion look can be knocked off and still look close to the original, why would you just hand over your hard-earned money for nothing? And yet these women do. They perceive value there. One woman said that to her the clothes were art, and that she felt like a museum curator building her collection.

Is she wrong? Of course not. She is telling us what value means to her. It pays for a marketer to listen.

Similarly, HGTV's "Selling New York" had a prospective apartment buyer who clearly had millions to spend, but found value in "getting a bargain." So he haggled over the price of marked-down properties to the point where he lost some serious good ones.

Think about a travel booking service. Sure you can get a flight booked for nothing. But would you pay a premium for a service that promised you no hassles? No overbooking problems, no luggage delivery problems, no long waits at check-in, just a smooth and relaxing travel experience. I bet you would find that valuable and worth the money. Even if you're thrifty like me.

What makes the whole subject even more complex is that the exact same person may be willing to splurge on some things, but pay almost nothing for others. For example, I won't set foot in Payless. I know their shoes are probably OK. But I have bad feet. I can never find shoes. So you know that only brand I trust? Nike! Those sneakers – that are made overseas – are the only ones that fit my feet right. The men's version. So be it – there goes $80 or more.

All of us are marketers. What is it that you sell? If you want your brand to be successful, think about value from the perspective of the customer.