Wednesday, February 10, 2010

Promise me value or your sale is toast. Warranty in value.

BEVERLY HILLS, CA - APRIL 09:  Actress Angie H...
Don’t interrupt me. I’m having fun on Facebook. I’m getting value. You take that away from me and I lose the value. Don’t you hate for the lights to go out, the timer to expire, or Twitter to fail? You want your pizza delivered hot and fast. You want your television program not to lose the sound halfway through and the color to be stable. If you opened a business account with a credit card, you don’t want someone else buying stuff with it. This necessary component of value to a customer is the believable promise of a good time.

As a business manager of your services, your goal is to take what you got and make money with it. If you are a non-profit, you want to provide value to a member or citizen. Maybe it’s a writing talent that you want to be paid for, maybe it’s a glow in the dark t-shirt that you found a market for, or it’s the next viral YouTube video. But it’s up to you to decide the right mix of quality, cost and risk to pass on to the customer. They of course, want it all. A thicker fabric, lower cost, and no shrinkage at all is what they ask for. You manage your business the best way you can to own that market.

This is the third in a series of posts covering what goes in to making value through the help and guidance of Information Technology Infrastructure Library. In the next posts you’ll see:
Past posts include:
Economics doesn’t avoid promises

Economics has a bad reputation because of that thing called price. We take ownership for handing over a check for the price and the service provider thinks that they’ve sealed the relationship. That’s the way economics is to most people.

But economics has never been about money. It’s always been about value and scarcity. The value of a transaction is more than a decision to buy a service concluding with monetary exchange. People don’t make bottom line decisions or else no one would ever visit a Saks, Barney’s or a Holt Refrew.

We’re looking for those things that help make a decision when other things like functions are about the same. Sure, the product costs a discrete amount. But how much is the service provider going to talk to me after I walk away? How long will the product last before it starts to crack, run out of ink, slow down, or become unusable?

The promise of Zappos for returning shoes without questioning where the customer has worn them or for how long has propelled that web store past any other commerce commodity store. These are shoes just like any other ones you get in a store. But they promise so much and make you happy at the same time, all of which adds up to profit and loyal customers.

Promise dissonance

Customers get skittish when they don’t know that their service will be consistent. They become skeptical about the uncertain value they are getting. They start wondering about outages or worse, you going out of business. It has to be backed up by a promise that the food will be delivered on time or that phone service will be restored in the hour. They will illogically switch to a competitor even after you increased the perceived value by giving them extra time, extra goods, or extra quality. That’s because customers worry more about losses than getting stuff that they didn’t initially sign up for.

The expectations of a customer can be kept from fading away by having some documentation about what the customer is getting. A food label that says what is in the box is better than a brown box. A picture is even better. But start showing your hamburger as juicy with a thick tomato and fluffy lettuce leaves and then serve up a flat burger with a flimsy couple of unappetizing vegetables and see how many customers come back.

What if you want to add utility like I mentioned in a previous post by adding resources to provide a wide menu and don’t have the assets? Then you take away that uncertainty of variation in the services. You make your promise better. Just one soup delivered consistently hot and yummy will turn a business into a magnet like Andersen’s pea soup restaurant along that vast stretch of agrarian flatness between LA and San Francisco. Nobody remembers exactly what town they are in but they remember to stop for the pea soup when they see the sign as they have for the past 75 years.

Just breaking the uncertainty of delivering your product can make a customer engage in your service. They will of course, make a mental note of everything you do from the first meeting to the box you deliver your product in. Your telephone etiquette and return policies have to be in line as well as being up front with any charges that they might incur along the way. Without a strong corporate wide policy that spells out the utility and warranty of the service you provide, you are setting yourself up for a portion of customer dissatisfaction.

If you blog you might think of these things to help you break that uncertainty:

  • keep a regular schedule
  • keep to a consistent set of topics
  • use graphics that match up with your posts
  • use backgrounds that don’t hinder first impressions
  • make all the widgets useful for your topic

Put the promise of how you deliver the product up there with the product that you have figured out suits your customer. Don’t let the sale of one or two of your products soothe you into believing that it’s all going to sell well. It’s more than money when it comes to value for the customer. Promise them a good time and follow through on it to keep that sale or keep them reading.

Image by Getty Images via Daylife

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