Delivering high customer value


Consumers have varying degrees of loyalty to specific brands, stores, and companies. Loyalty in this context is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future. This is despite situational influences and marketing efforts for other products having the potential to cause switching behavior. A 2002 survey of American consumers revealed that some of the brands that have greater consumer loyalty include Avis rental cars, Sprint long-distance service, Nokia mobile phones, Ritz-Carlton hotels, and Miler Genuine Draft beer.

The key to generating high customer loyalty is to deliver high customer value. A company must design a competitively superior value proposition aimed at a specific market segment, backed by a superior value delivery system. The value proposition consists of the whole cluster of benefits the company promises to deliver more than the core positioning of the offering.

An example of the value proposition is Volvo’s core positioning has been “safety,� but the buyer is promised more than just a safe car; other benefits include long-lasting car, good service, and a long warranty period. Basically, the value proposition is a statement about the resulting experience customer will gain from the company’s market offering and from their relationship with the supplier. The brand must represent a promise about the total experience customers can expect. Whether the promise is kept depends on the company’s ability to manage its value-delivery system. The value-delivery system includes all the experiences the customer will have on the way to obtaining and using the offering.

British Airways and American Airlines may use the same kind of aircraft to fly executives first class between New York and London, but British Airways (BA) beats American Airlines by meeting customers’ needs or convenience and rest at every step of the journey. BA’s value-delivery system includes a separate first-class express check-in and security clearance, plus a pre-flight express meal service in the first-class lounge so that time-pressed executives can maximize sleep time on the plane without the distraction of in-flight meals. BA was the first to put seats that recline into perfectly flat beds in its first-class section, and in the United Kingdom a fast-track customs area speeds busy executives on their way.

A similar theme is emphasized by Simon Knox and Stan Maklan in their competing on Value. Too many companies create a value gap by failing to align brand value with customer value. Brand marketers try to distinguish their brand from others by a slogan like “washes whiter� or a unique selling proposition “A Mars a day helps you work, rest, and play�, or by augmenting the basic offering with added services “Our hotel will provide a computer upon request�

In spite of the above slogans and announcements they are less successful in delivering distinctive customer value, primarily because their marketing people focus on the brand image and not enough on actual product or service performance. Whether customers will actually receive the promised value proposition will depend on the marketer’s ability to influence various core business processes. Knox and Maklan want company marketers to spend as much time influencing the company’s core processes as they do designing the brand profile. Here is an example of a company that is a master at delivering value.

Superquinn is Ireland’s largest supermarket chain and its founder, Feargal Quinn, is Ireland’s master marketer. A greeter is posted at the store entrance to welcome and help customers and even offer coffees, and to provide umbrellas in case of rain and carryout service to customers’ cars. Department managers post themselves in the aisles to interact with the customers and answer questions. There is a high-quality Salad bar; fresh bread baked every four hours, and indications of when produce arrived, including the farmers’ picture. Superquinn also operated a child-care center. It offers a loyalty program that give points for the amount of purchase and for the discovering wrong within the store, such as dented cans or bad tomatoes. The loyalty card is recognized by a dozen other firms (a bank, gas station etc) who give points for purchasing at their establishments. Because everything is done to exceed normal customer expectations, Superquinn stores enjoy an almost–cult following.

From the above examples one can best understand what is about delivering high customer value. Even in India very recently opened super markets are offering such incentives which are delivering the high customer value. May be more and more developing countries’ marketers are doing the same.