Introduction to value-added solutions
While on active duty in the Army, I had a sign on my desk that proclaimed, “Protest Against The Rising Tide of Conformity.” Great message – wrong location! The brass struggled to figure me out but put up with me because I had some offsetting qualities.
Today, B2B tech companies are still struggling with this message, which is now labeled “differentiation.” And whether you provide products, services, or both, you are now trying to make your offerings unique while remaining cost competitive. Moreover, since hardware and software are becoming generic, the only three viable long-range strategies they can follow are:
- Provide unique, value-added solutions.
- Create long-lasting, positive experiences.
- Provide unique, value-added solutions that are delivered in a way that creates excellent, positive memories.
I do not consider being the low-cost provider as viable long-term.
Value-added solutions
Value-added solutions are difficult to copy because they are based on your business’s unique culture, skills, experience, and insight into customer needs. Even if someone can reverse engineer your value-added services, they may not be able to commercialize them. They may well lack the industry experience you have, or they don’t understand the subtleties that make your offer attractive to customers.
Your value-added services, at a minimum, must meet these criteria:
- They have to be meaningful to your customer. They must offer superior value for things that are important to the prospect.
- You must clearly explain and quantify the benefits in terms your prospect understands.
The value-added features must have long-term value and must be “upgradeable” over time by adding new features and benefits – just like a hardware or software product.
People with services marketing backgrounds generally know how to include critical customers as they develop the offerings, improving your likelihood of success.
Great customer experiences
Customer Experience (CX) management is now a full-blown industry. A LinkedIn search for “Customer Experience” groups yielded 1331 choices. A Google search for “customer experience” generated 180 million results. Almost every business is trying to do “it” with differing levels of success. Yet we can still name the companies with an excellent reputation for providing a memorable experience. The ones that come to my mind in 10 or so seconds include:
- USAA
- Southwest Airlines
- Jet Blue
- Amazon
- Zappos
Zappos is pretty special. They started to provide a great experience to online buyers of footwear. They are so revered that Amazon purchased them and kept them as a stand-alone business to have easy, frequent access to learn about how to clone their unique culture.
Here is a true story about Zappos:
They instruct their call center associates to do whatever is necessary to make the customer happy. They are not measured on how many calls they take in a shift, the average call duration, or whatever. A friend of mine is a Professor in a Boston area business school specializing in Customer Services. He told the Zappos story to an evening class, and they did not believe him, so he called the Zappos 800 number and explained the situation. The call taker answered questions ranging from culture to compensation, management techniques, and even the weather in Las Vegas (where Zappos is located). They were on the phone for almost 2-hours, even though there was no intent to buy anything. Would you tolerate that in your call center?
This is differentiation based on customer experience and is extremely difficult to copy. And their customers keep coming back to spend money.
Combine value-added solutions with great experiences.
This is LOYALTY!! Based on what you have just read, if you did business with a company that did both things, how likely would you be to stop doing business with the company? And when they mess up, how likely are you to contact them and offer to work with them to correct the problem and help find the root cause so it never happens again?
Zappos as an example – You can go online, find a pair of sneakers you like, call the order entry desk, and ask about customer feedback. When you finally purchase it, the shipping is free. After trying them on at home for a while, you decide that your choice was not right for you, so you send them back, again without paying for return shipping. If you call in again and explain the situation, they will probably make other suggestions to satisfy you and even offer you some unexpected bonus on the new order.
Conclusion
Unless you do something special, you will lose your unique value proposition over time; however, by focusing on your customer and delivering value-added services in a way that makes a memorable, positive impression, you can indefinitely postpone the time when your business is considered a commodity.
I am glad I am not selling footwear online!
A related article: Differentiation Through Value-Added Services – John Deere
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization create more value-added offerings, please contact us or check out some of our free articles and white papers here.