We live in a world of excellence or mediocrity, in which our customers demand the absolute best. Customers are increasingly refusing to settle for mediocre products or services, preferring premium experiences – for which they are willing to pay premium prices. When prospects and customers identify products or services of inferior quality, they will either reject them outright or resort to price sensitivity tactics such as demanding large discounts to compensate for the inferior experience.
While consumers increasingly demand excellence, companies tend to reciprocate with mediocre experiences, adhering to the commoditization driving principle of “good enough.” Executive are often the prime culprits behind this trend, often proclaiming the following:
- “We do a decent job”
- “We strive to satisfy their needs”
- “This solution should do”
- “Customers do not need more of this or that”
- “The majority of our customers should be satisfied with this solution”
These types of statements and the frequency with which they are uttered encourage employees to deliver mediocrity rather than strive for excellence. Thus, principles such as “excellence,” “absolute best” and “beyond customer expectations” often fall on deaf ears. When one of our clients presented her customer experience strategy plan to her senior executives, they all replied with great enthusiasm but refused to allocate the necessary funding. All of the executives believed that the current budget was sufficient to implement the strategy – and in so doing, tacitly accepted to the principle of “good enough.”
The principle of “good enough” seems to be adopted in great numbers throughout the corporate world. Despite proclamations, memos and posters about achieving excellence, few companies truly live according to this lofty principle.
Consider companies that sell “slightly blemished” or “imperfect” products through outlet stores. What message do those companies send their employees? The message is that imperfection or second best is acceptable because a certain segment of consumers will be willing to pay for imperfection. With this logic, employees will have little incentive to strive for excellence when “mediocrity sells.” These small compromises, whether tactical or strategic, intentional or unintentional, facilitate a culture of mediocrity. While no company sets out to lower its standards and diminish its brand, the incessant adoption of “good enough” principles will ultimately lead to quality and brand deterioration.
If you are striving to deliver premium experiences that command premium prices, you may want to eliminate any trace of compromise on quality. “Good enough” is antithetical to corporate success and ultimately drives product and service commoditization. Successful companies such as Louis Vuitton and Gibson Guitars are unwilling to allow any hint of product inferiority to emerge from their companies. Do not make the mistake of thinking that your organization can offer consistently inferior experiences and get away with it without consequences.
During these challenging economic times, you will no doubt be faced with increasingly large numbers of price sensitive customers who will question your prices. Moreover, your company will likely mandate some form of cost cutting initiative that can ultimately affect product or service quality. Despite these challenges, do not make the mistake of lowering quality without recognizing that you will be accelerating the commoditization of your own products and services. Consumers will notice, and demand deep discounts to compensate for their inferior experiences. Successful companies will recognize the opportunity to distinguish themselves from their competitors, fight the temptation to cut costs, insist on excellence and raise product and service quality. Consequently, they will emerge as memorable and superior companies, while their competitors will be stuck in traffic on the road to commoditization and price reduction.
Lior,
You have nailed the mindset of all too many business executives, executives who remain baffled as to why they must fight for declining margins and lack customer loyalty.
I would like to emphasize and extend one of the concepts you mention at the beginning of you post. You mention that when customers detect products of inferior quality they turn to price sensitivity tactics. I agree but suggest that the same thing happens when customers are presented with an offer of utility that is devoid of an emotionally compelling customer experience. Customers have an experience; it is just that the experience triggers and indifferent buying personality that focuses on price and convenience.
The prevalence of the “good enough” approach you describe suggest that those who promote and try to articulate the business virtues of experiences customers’ value, still have a lot of work to do.
John
John I. Todor, Ph.D.
Author of Addicted Customers: How to Get Them Hooked on Your Company
John,
Thanks for the comment. I agree with you. In today’s experience economy, emotional engagement is an integral part of the value proposition to customers. Absence of such emotional connection will make the product or service inferior.
Lior
To address Lior’s astute observations, I’m wondering whether the Finance function and General Management are aware of the bottom-line impact of these disconnects between the Marketing and Quality functions. A typical marketing exec is keen to enhance lead generation and improve alignment with the Sales organization. Rightly so. A typical quality exec is focused on product-specific quality. Rightly so, as well. But what if Marketing and Quality could work hand-in-hand to deliver brand messages that are truly lived up to regarding the whole customer experience? For one, both functional areas would expand their powerful impact on brand equity and company profitability. Everyone wants to garner the highest share and margin possible — a desire that’s dependent on consistently superior benefits from the customers’ perspective. Made possible through strong connections between Quality and Marketing organizations’ joint efforts.
– Lynn Hunsaker, http://www.ClearAction.biz, ClearAction mentors executives for customer profitability through advocacy and churn/hassle prevention.
Does the adage “if you pay peanuts, you’ll get monkeys” also apply to the quality of experience delivered to customers?
If firms are reluctant to make an investment in building positive experience, how are they ever going to delight their customers?
Daryl Choy
Make Little Things Count
wisdomboom.blogspot.com
Daryl,
The adage applies. It always did. But companies got away for too long wiht poor experience and now are struggling to justify the investment. they fail to see it in the context of loss of potential revenues and loyalty.
Lior
Lior Arussy