Tuesday
Nov202018

So you think your customer rewards program is great? Big deal!

I’ve just filled in a customer satisfaction survey for my mobile service provider. It was all going well until there were questions about rating their “rewards and benefits”.

They listed some examples of what they mean by “rewards and benefits”. The thing is every single one of them is part of the reason I choose this company. It's what I pay for.

I’m not aware they've ever offered me any rewards, even though I’ve been a customer for decades, through several brand and ownership changes.

I can’t believe a household name company can get this so wrong.

Benefits are expected as part of the deal, whereas rewards, by their very nature, are unexpected, or, if you like, “extras”.
I started the survey feeling positive about the company, but I ended it feeling annoyed with them for conflating benefits with rewards.

In your business, have you defined precisely what benefits your customers can expect as standard vs. rewards they don’t expect? How about for your management and staff? And for your key partners and suppliers?

 

 

Saturday
Oct202018

Premium means Premium.

My beloved Bowers & Wilkins headphones - the bees knees - finally gave out after three years' sterling service.

I phoned the factory, got through to a helpful young woman within a few minutes, "No problem, sir, we're sorry to hear that, we'll post you a box to return them to us for service."

Two days later a small cardboard box arrived containing what they call a "beauty box" - seriously. The cardboard box itself was sealed with carefully-positioned and cut tape, and had shipping labels that were stuck on absolutely straight. It looked like someone really cared what it looked like before shipping it. The "beauty box" is the same box the headphones had originally shipped in: white, branded, with a soft insert shaped to fit the headphones. Beautiful indeed (if you're into this sort of stuff!).

Off it went back to the factory. I received an email saying they'd arrived safely.

A few days later another email arrived saying they'd inspected the headphones, but due to the type of fault, they recommended replacing them with the latest model for a few pounds more - would that be OK? Yes, I replied.

A few days after that I received a pair of brand new headphones (in another beauty box!), with a note apologising for the inconvenience.

Will I buy from them again? Will I recommend this company? You bet I will, with bells on (disclaimer - I have no interest in Bowers & Wilkins other than as a customer).

If you're positioning your brand as Premium, make sure that every aspect of what your company delivers is what it says on the tin, down to the tiniest detail, every day. No exceptions.

Premium means Premium.

 

 

Thursday
Sep202018

Pricing vs. charging: is there a difference?


 

Pricing and charging are often seen as the same thing. They're not. Pricing a product or service is a strategic decision, whereas charging is tactical. I’m defining strategy as the game plan and tactics as the moves.

Pricing products and services needs research, planning and thought. For example, the Recommended or Suggested Retail Price of a product, the “Rack Rate” of a hotel, or the headline hourly or daily rates of a service. Setting the price for that product or service sets its perceived value, i.e. how it’s positioned in the marketplace.

What a business charges for that product or service can be varied or altered according to circumstances. For example Uber uses "surge pricing" during busy periods, while many retailers have sales from time-to-time.

If discounting, it's crucial always to show the full price, as well as any discount, so that the original perceived value is not lost. Imagine you're in the market for a camera. Let’s suppose it’s the first time you’ve bought one. You’re feeling both excited and nervous as you enter a camera shop.
The camera salesman listens to your needs and says, “Okay, given what you’ve told me, I suggest you look these three options.
Each one has its pros and cons: there’s this one, which is priced at £1,000, this one priced at £500, and this one priced at £250. The one priced at £1,000 is on special offer, because they’re going to replace it with a newer model, so we’re able to charge you £500, in other words a 50% discount. Which one would you like?”

Given these options, I think most of us would choose the £1,000 one, discounted to £500, rather than the £500 one or the £250 one. Most of us associate high price with premium product, so, by definition, the highest-priced product or service is perceived as the best.

We associate price with value, so it’s very important that pricing of products and services is carefully thought through - i.e. a strategic decision - it says what you, as a business owner, value your products or services at.

As for charging – be careful not to dilute the value of your product or service by offering discounts or specials too often; be tactical about why, when and to whom you offer a discount.

 

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