Everything your company does either creates or destroys value. Value, when measured by a customer’s willingness to pay, is in the mind/wallet of each customer.
You design products, marketing programs and sales training specifically to create and communicate value to your customers. Most of your company resources are dedicated to these three areas: new product development, marketing and sales. The purpose of these are to create and communicate value.
Every customer touch point creates or destroys value. Price can’t compensate for bad customer interactions.
Here is my worst customer service story ever (although a lot of companies seem to be competing for this recently).
I ride an expensive bicycle and am very picky about who works on it. I would love to give my business to a local bike shop, but I need to trust the mechanic. There is a bike shop very convenient to my house, but I had never taken my bike there. Oh, I’d purchased a few accessories from them, but they hadn’t worked on my bike.
One day while walking by I met Mike (not his real name), one of their mechanics, out testing a bike. We started chatting and I came to trust him. So I made an appointment for Mike to work on my bike.
The day of the appointment arrived. I walked into the shop and told the guy behind the counter that I was dropping my bike off for Mike to work on. He replied “I’m the owner and I’ll decide who works on your bike.” I was stunned. I truly couldn’t believe what he just said. Gathering my wits I asked nicely, “Can Mike work on my bike?” He said, “I can’t make that commitment.” “Are you serious?” I asked, not believing what I just heard. He said “yes”. So I turned around and walked my bike out the door.
To add a cherry on top of this story, I called the owner about a week later and asked if he would reconsider and he said he didn’t want his customers coming in because of his workers, so no, he wouldn’t.
I easily spend $1000 per year on bicycle service, accessories and clothes. Since that day, this bike shop has not received a dime of that.
This bike shop owner surely puts a ton of time designing his store, making it as inviting as possible. He carries the products he thinks are best. He hires good people. He advertises in the local community. He does many things to create value for his customers. With one action, he destroyed every bit of value with me.
Value gets destroyed one customer at a time.
Lesson – Every customer touch point creates or destroys value. Make sure none of your customer touch points destroy value. Pricing can’t help you recover.
Mark Stiving, Ph.D. – Pricing Expert, Speaker, Author
Photo by Tony the Misfit