How does an organization create customer value
Marketing experts Don Peppers and Martha Rogers said: “Without customers, you don’t have a business.” It is such a simple, nevertheless, a scary thought. We live in a world of consumerism, in which the customer’s wants and desires greatly exceed their basic needs. Even though many see this concept as a threat to modern world society, it has created the extremely competitive marketplace for businesses. The companies are competing everyday to win over as many customers as possible by offering products that create irreplaceable value and benefit to those customers. Many companies will succeed in getting the customers to buy into their value and benefit however, the true success of a business is not linked only to getting new customers. It is considerably linked with keeping those customers around and winning over the customers from their competition. Companies work hard to develop creative marketing schemes for their products so that the company is recognized and perceived as valuable and beneficial to the customer. However, I believe that all strong companies start from the same point: listening to the customer. The extraordinary merits of information technology, such as the internet, cell phones, social media, television, radio, etc. have made the world we live in a global village. Thanks to the information technology, distance has never been less of an obstacle to communication amongst people. Technology has made information essentially accessible to everyone, everywhere, at any time making consumers, “more educated and informed than ever. They have the tools to verify companies’ claims and seek out superior alternatives” (Kotler & Keller, 2009, p.121). Consumerism and technology have made it possible for the customer to be heard. They can share interests, as well as positive and negative reviews for others to see. Companies follow and act upon those interests and reviews. They analyze all the information and seek to create a product that will satisfy the consumer’s interests and minimize the negative reviews. The creation of a quality product or a service that satisfies a great number of the customer’s needs and wants will create competitive advantage in the marketplace for the company and will make the product or service valuable to the customer. Ultimately, it will create an valuable experience. Positive experiences create loyalty towards that product and, “deeply held commitment to rebuy or repatronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior” ( Kotler & Keller, 2009, p.123). Negative experiences on the other hand can cause dissatisfaction with the product and cause a customer to defect and go to the competitor. When defection happens companies seek other ways to retain current customers, gain new ones, or even stop dissatisfied customers from defecting. Some of the other ways companies make themselves valuable to the customer are: speed of service, discounts and rebates, warranties, loyalty programs, gifts, etc. Sale!Sale!Sale! 20-70% off entire store! 2 for 1! All these marketing schemes, discounts, and rebates are used to promote value in the eyes of the customer. Customers like to use phrases like: ”I want more for my money”, or, “getting more for less”.
One of the best ways that companies show they are valuable to customers is lowering the price of their products. The value created for the customer is satisfaction and a feeling of success. Meeting customer needs with a product is great, but the real measure of success cannot be measured by the product made, but by the feeling that the customer gets after purchasing it. That feeling of satisfaction or dissatisfaction after purchasing the product will affect the customer retention base, customer loyalty, company’s image, and ultimately the bottom line. Many companies today compete on price and try to create value for the customer by giving them more for less. No matter how good the product or service is, mistakes will happen and the customers will complain. Many people don’t like to hear complaints, but when there is money involved there will be complaining. The first step in making the company valuable to the customer is by making complaints easier and more accessible. By doing this the company makes it personable, consequently creating the value of importance for the customer instead of making them just a number. Benjamin Franklin said, “Well done is better than well said”. Companies might say they will make it personal and resolve the issue, but then you are put on hold for thirty minutes when you call in for a complaint, or your car might have to stay in the shop two days longer than anticipated. When inconveniencing the customer in moments like these, any effort to help the customer resolve the issue thereafter may be futile. That may very well be the last time the company will deal with that particular customer. The second step in creating value for the customer is the speed at which the issue will be resolved. It might sound cliché, but time is money, and an attorney that has to be on hold for thirty minutes might have lost the opportunity to earn two hundred dollars. He might take it personal and go to your competitor. According to Kotler & Keller (2009), “Of the customers who register a complaint, between 54% and 70% will do business with the organization again if their complaint is resolved. The figure goes up to a staggering 95% if the customer feels the complaint was resolved quickly” (p.129).
Therefore, it is not just resolving the issue that makes the customer value your company, it is the speed at which that issue or complaint is resolved. The desire of each marketing person and each company, per se, is building a strong and loyal customer base. Quality products and services create satisfied customers, and that satisfaction creates a relationship between the customer and a brand. If the customer is repeatedly content with the benefits from the particular product or service, it starts building loyalty. Once loyalty is established companies continue creating value for the customer thru development of loyalty programs that provide customers with extra rewards and benefits, making them feel more valuable since they are not getting those benefits anywhere else. The company has created ultimate value for both customer and themselves when their customers become their clients. According to Kotler & Keller (2009), “Customers may be nameless to the institution; clients cannot be nameless. Customers are served as part of the mass or as part of the large segments; clients are served on an individual basis. Customers are served by anyone who happens to be available; clients are served by the professional assigned to them” (p.140). Companies create competitive advantage in the market by putting the customer’s wants and needs ahead of everything, understanding that without their customers they would not exist. In today’s world of consumerism and information, every company is capable of creating a valuable experience for their customers. However, the difference between the leaders in the market and others is that the leaders are constantly making their customer’s feel valued. Leading companies listen to their customers, they resolve their customer’s complaints and concerns in a fast and effective manner. They make customers feel valuable by building personal relationships thru numerous loyalty programs, and ultimately deepen that relationship by making their customers into clients.