Friday, 28 January 2011

Service and Value Differentiation

I spoke to a friend recently who has just started a new job at a large digital print company. They’ve been very successful for a number of years but are now finding it increasingly difficult to differentiate themselves from the competition.

It’s not because the quality of their service and products has dropped or because they are too expensive but because the competition has found ways to add value to their offering and move away from a commoditised model.

I’ve spoken to a number of print businesses recently who are facing the same challenges and are therefore looking at ways in which to diversify their operations. They have all realised that competing on price alone cannot be sustained and that they must offer clients a full service approach to marketing communications by moving into data management, email marketing and online communications, often through forming partnerships with experts such as EWA.

Personally I think this is down to a number of factors some of which are not unique to their industry. The changing demands of clients themselves are one of the main reasons. Many are increasingly using procurement professionals as a means to extract every last ounce of value from a new contract, both in terms of price but also in the scope and quality of services provided.

The same can be said of us as consumers, we all want to achieve what we perceive to be a good deal although this doesn’t always necessarily mean the cheapest (and I think perception is the key word here). We’re happy to pay a premium for products or services that offer just that little bit more than the competition, whether it’s in terms of quality of service, speed of delivery or customer support, both pre and post purchase.

And customer service can be a simple and cost effective way of gaining competitive advantage and standing out from the crowd in a saturated marketplace. You may sell the exact same products as your competition for the same price or perhaps even a few pence more. If your customer service is exceptional and you strive to add value to each and every purchase, then your customers’ experience will be a positive one and they will be happy to spend that little bit more, hopefully becoming advocates of your business as a result.

In today’s digital world, news (good or bad) spreads fast. Social media has opened up a whole new world of communication and information sharing between groups of like-minded individuals. Where previously recommendations would have been limited to an individual’s peer group or family network, people (i.e. your customers) are now much more comfortable sharing their opinions and feedback online. Such feedback is given almost in real-time and becomes viral in its own right, propagating across multiple social networking sites and the World Wide Web for consumption by other potential customers.

So in summary, good customer service and adding value to each purchase, whether real or perceived by the customer has the potential to make your business a success, attracting new customers who in turn will help spread the good news.

No comments: