| This book is about making the choice for the customer, making a choice
beyond the superficial slogans and choosing an operational, actionable strategy.
Our experience has shown that although companies focus their customer
programs on cross-selling and loyalty initiatives, the issue is much
more fundamental. They fail in their value proposition—their total customer
experience. One of the critical rules discussed in this book is: whoever collects
and completes the value proposition gets to keep most of the money. A
few companies deliver a complete, clear, and compelling value proposition
to their customers, so they collect premium prices. However, most companies
leave their customers to unravel the value of products and services on
their own, so they reap a poor return. The real money—in any game—is
not in the old four “Ps”: Product, Pricing, Placement, and Promotion. The
glitz and glamour of the product does not really cause people to beat a path
to your door; you can build it, but this doesn’t mean customers will come
wandering out of the cornfield to plunk down $20 for it. In fact, product
differentiation evaporates faster than ever because of private-label alternatives.
The attractiveness of the price doesn’t get customers either and is easily
compromised through Web retailers who compete on the basis of the lowest
price ever. Nor will a fancy display in a high-traffic channel bring them,
and promotions are a dime a dozen. Many alternatives are available to your
customers, alternatives that will challenge your premium placement. If you
want to win loyalty and create a customer base with an almost fanatical devotion
to your products, you need to create a complete experience, an amazing
and surprising experience, that is, a value proposition.
This book will detail the critical decisions and trade-offs companies
must make to focus their efforts on the customer. To live and breathe the
customers, just as your company used to do when it was founded by a passionate
entrepreneur, requires that you make strategic choices. These tough
but necessary choices are what this book is about. In fact, the book will argue
that these choices are at the core of customer relationships: companies that
do not commit to customer relationships do not keep customers; companies
that do can hardly keep up with demand. These commitments cannot be
faked or subjected to quarterly demands. They are long term by nature.
Before we discuss the choices, let’s review the state of the industry
and the fatal mistakes that companies make every day in their customer
relationships. |
