Jul 19 2010

How to Never Get That First Dollar from the Customer

Published by at 8:22 pm under customer serivice,marketing

What do you expect for a dollar?

If you think your standards are low, think again. What’s the ratio of free apps on your iPhone, to 99 cent apps? How many albums have you streamed, vs. digital downloads you have bought?

Consumers expect more than ever – regardless of price point. Two factors contribute to this continual bar-raising in the consumer’s mind:

  • Increasing quality and service across all consumer categories, and
  • Access to better information.

The past 50 years has seen an incredible expansion of choice and quality across all consumer categories. Manual processes, with variable consistency, were replaced by automated, machine processes. Then, services were automated using computers to create endless replicas that were exact duplicates.

Business processes were normalized and shared across verticals, thanks to the rise in consulting and outsourcing firms. This promoted a high level of similarity across industries.

And all of this was to the consumer’s benefit – quality improved, defects decreased, and customers got more for their money. In Buying In, Rob Walker discusses how Consumer Reports recently rated more than 80 washing machines. There were no “Poor” or “Fair” ratings at all.

In fact, 57 of those washing machines were “Very Good.” Manufacturing has gotten to the point where most everything we buy is pretty darn good right out of the gate. So, the consumer’s default assumption is that everything will be of a uniformly high quality, at a minimum. Sure, some products will really stand out. But, consumers really can’t go wrong at this point. Quality is a minimum expectation.

At the same time, there are more references and resources than ever before. Consumer Reports has a print circulation of 4M, and separately, 4M unique visitors per month. But that’s just one place to get first person feedback about a business or product. Amazon, Yelp, various App Stores, and nearly every e-commerce website offers customer reviews, feedback, and some form of rating system. Not to mention Facebook and Twitter.

That means that customers now do increasing amounts of research on even the most fleeting of transactions.

To pry a lousy buck out of a consumer’s pocket, you have to be the best in class.

I found myself on the consumer side of this equation just today. A Samsung bluetooth headset went on clearance for $2.00 after rebate (only $1.00 each if you bought three!). Initially, I got excited. Then, I checked out their Amazon reviews (which said the volume didn’t go up very high), did a Google search (mediocre battery life), and then searched on Twitter (just talking about the deal; no mention of quality).

My heels cooled. The race for the deal was off – I didn’t order them. It just wasn’t worth the hassle for a product that wasn’t excellent.

If you think you can cut a corner, or fix it next week, or figure it out later, think again.

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