By: John I. Todor, Author of Addicted Customers

Put Your Offering in Context—One Meaningful to Customers

Declining profit margins and limited customer loyalty, these are common concerns of many businesses. When customers treat product like commodities and shop on price or convenience they force businesses to aggressively compete with each other. Unfortunately, this just exacerbates the situation.

How can a business differentiate on value, keep margin high and win customer commitment? Decommoditize! Put their offering in a context that is meaningful and valuable to the customer.

What is context? Context is the interrelated conditions or situation in which something exists; the circumstances that define meaning or value.

How can a company put their offering in a context that is meaningful and valuable to customers? By looking at the offering from the customers’ perspective. 

Mimeo.com is a great example of a company that did just that.

Mimeo.com sells printing. In most instances, printing is a commodity. Printers compete on price. Most printers are struggling and in recent years many have gone out of business. Yet, Mimeo.com has been very successful.

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By Katherine Jones, Director of Marketing at NetSuite

For years, the mantra for SFA and CRM systems has been to achieve a 360° view of the customer.  The sad truth, however, is that traditional standalone Sales Force Automation solutions are not able to deliver this complete view for the sales force and leave major “blind spots” on key customer activity with the company. 

The important intersection of sales teams and their customers is central to optimizing sales effectiveness. This means that real-time visibility into every aspect of the customer life cycle from initial lead through revenue transactions is vital.  Having this information within one business solution improves productivity and efficiency across the entire sales and support teams.  Without that broader visibility, the sales rep is driving blind and can easily run off the road by not knowing customer purchase, service, or payment history.  However, when businesses rely on a single integrated system, the sales team and its management can obtain more timely, accurate data while reducing the need to chase down information from disparate systems and to reiteratively enter data in multiple applications.

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John Todor, Author of Addicted Customers: How to Get Them Hooked on Your Company

How do you get customers to scrimp elsewhere so they can splurge on your offering? Offer a relationship that gives them a better experience, reduces stress, and increases the value they get.

This type of relationship leads to customer equity. Customer equity leads to higher profits, greater lifetime value, and the power of word-of-mouth. Yet, most businesses are compelled to compete on price and convenience. Why? They have no systematic process for building customer equity.

The basis of these relationships is trust.

However, according to the 2006 Edelman Trust Barometer, customers rank most companies, executives, products, and marketing in the bottom one third of the trust scale. Many business people feel they stand behind their products and therefore are trustworthy. Guess what? Customers expect quality products and services. This only leads to trust in the product, it does not add trust or value to the relationship.

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John I. Todor

Customer equity leads to higher profits, higher lifetime value, and the powerful impact of word-of-mouth. Yet, most businesses are compelled to compete on price and convenience. Why? They lack customer equity and have no systematic process for building it.

Customer equity is the value of the relationship that exists in the customer’s mind – it’s emotional or psychological. When customer equity is strong, customers have a greater desire for the offering, are less price-focused, forgive snafus, seek advice on big picture issues, see the relationship as helping them deal with the future, and become advocates.

In today’s marketplace, customers are confronted with abundance, overwhelming choice and aggressive competition for their business. Consequently, most products are seen as roughly equivalent, and therefore are to be bought on the best trade-off between price and convenience. In this mindset, customers are indifferent to brands or relationships. No customer equity accrues.

The differences between most products are not meaningful to customers. It is through the experience the customer has buying and, especially, using the product that the customer gains value or meaning. Experiences create emotional and psychological reactions – negative, indifferent, or positive. The outcome of the experience lasts and impacts the relationship and customer equity.

The customer experience is the vehicle for building customer equity!

Six Ways to Build Customer Equity

1. Shift the Focus of the Relationship
A highly competitive marketplace encourages customers to buy on price and convenience. Yet, customers want trusting relationships. Relationships that deliver meaningful experience and help them deal with their issues. Truly trusting relationships simplify things for customers in an increasingly complex world. Yet, few companies deliberately nurture the right type of trust.

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