customer service | The MarketFarm

Make sure value-added really adds value

Value-added is the currency of the new economy. The idea is this: You do business by giving people what they pay for, but you gain and retain customers by adding a little something extra on top.

When the Eat ‘n Park restaurant chain gives each child a free Smiley cookie after dinner, that’s value-added. When UPS and FedEx provide tracking numbers so you can follow the progress of your package, that’s value added.

But beware of providing value-added that fails to add value. That can actually harm your business.

Here’s an example from the business-to-business world: On behalf of a client, I recently placed some small advertisements with a local media outlet. Ever since, I have received a weekly e-mail letting me know that my online customer profile has been established and that if I fill it out I will receive a free listing in some under-explained and over-complicated online system. They call it value-added; I call it extra work with dubious benefit for which I won’t be paid. But ignoring it leaves me with the inescapable knowledge that maybe – though not likely – I am shorting my client on some meaningful opportunity.

Here’s another, from the business-to-consumer world: The pharmacy placed four automated calls to my house the other day.

One was important; it directed my daughter to call the store about a question on a prescription she had transferred from another location. Over the next few hours she called several times and nobody ever answered the phone. In the end, she drove to the store and waited in a long line to speak to the overwhelmed pharmacist.

While she was there, I asked her to pick up another family member’s prescription that had been submitted electronically the previous day by the doctor. Not only wasn’t that prescription ready, nobody in the pharmacy could find any evidence it had ever come in. But 20 minutes after my daughter got back home, another robo-call arrived to announce the prescription was ready.

That phone call was intended to be value-added, but instead, it emphasized that the pharmacy is understaffed and has flawed processes – resulting in the inconvenience of another trip to the store.

By the time I returned home, there were yet two more calls – “courtesy” reminders that it was time to refill some maintenance medications.

I never asked for these reminders. In my household, we have a better reminder system: When the pill bottle is close to empty, it’s time to reorder. But the pharmacy decided its calls would add value, and opted us in to receive them.

I’m sure there is a way to change the settings for these automated calls. But why should that be my job? I didn’t ask for all this value-added in the first place. Aside from the momentary pharmaceutical chaos in my household, we’re basically healthy and view our business with the drug store as a transactional necessity.

This, of course, is what the pharmacy corporation hopes to change. By offering all this value-added service, it hopes to turn our transactions into a relationship.

It’s having the opposite effect; rather than figuring out how to change my preferences, I simply seethe in the background while the answering machine records each call.

The lesson is this: If you’re going to offer value added, make sure it really adds value. Otherwise you’re just spending money on something that actually harms your business.

Air travel now closer than ever to a root canal

For a fee, Frontier Airlines is now allowing people to bring their caged pets into the passenger cabin to fly along. In doing so it joins United and Southwest in liberating dogs, cats, rabbits, hamsters and small birds from the dark chill of the hold.

It’s all part of a larger strategy. Between narrower seats, reduced legroom, baggage stuffed in every cranny, elimination of in-flight meals and every other nicety, the airlines are getting closer to their end-game.

For yet another additional fee you’ll soon be able to buy a seat and meal service for your beloved pet, and forgo the noise and discomfort of the main cabin with your own spot in the cargo bay.

A green GM logo won’t bring in the green

It’s been reported in several media over the past week or two that GM is considering changing its logo to green to reflect a leaner, more environmentally conscious identity.

I can’t think of anything less meaningful to the company or its customers.

GM’s future has nothing to do with telling the world that it’s lean and green — which is what the new logo color is supposed to represent. The only thing that matters is whether the public comes to perceive that GM and its products reflect the right values.

Honda and Toyota do well in the U.S. (and most places) because, to a vast number of people, their brands have come to represent cars that are among the easiest and most enjoyable to own: affordable, reliable, durable and neither too ugly nor too fancy. People didn’t come to feel that way because Toyota and Honda continually told us that their cars were just right (even though they DO continuously tell us). People came to feel that way because their experience was consistent with all the wonderful things Toyota and Honda always say about themselves.

GM would argue that it’s making cars with these same wonderful attributes. Whether that’s true is irrelevant. What matters is whether people perceive that it’s true.

Further, it’s not enough for people to agree when GM says it. People have to assign these attributes to GM products without any prompting before GM can regain its role as a leader in the global auto industry. That’s what branding is all about. And it takes years — not just years of marketing, but years of consistency in what you promise and what you deliver. Today, GM is still too close to the Hummer for anyone to really believe that it cares a lick about lean and about that kind of green.

GM may engineer a financial recovery over the next couple years, and that will be a great thing. But it’s going to take far longer than that for people to know, in their bones, that GM stands for lean and green — if, in fact, that’s really what GM wants for the long haul.

And I don’t even think that’s the right message. Because in 15 years, green is going to be the price of entry in the car business; if your products aren’t environmentally responsible, then you won’t thrive. So is GM going to rebuild its very identity around meeting the next generation’s minimum standards?

Do Honda and Toyota really get respect for the energy efficiency of their fleets? Or do they get respect for pursuing a mission — building cars that people want to own — with so much focus that energy efficiency naturally became a part of it at the right time? Their fleets were energy efficient before the 2008 run-up in gas prices. The only thing that changed was the advertising.

If the new GM is smarter than the old GM, it will focus on the reasons people really buy cars — the perfect combination of price, style, durability, maintainability and lifetime affordability. Green fits in there for sure. But it won’t always be the headline. And even today, I doubt it’s the reason most people choose which car to buy.

Selling what your customers want v. what they need

Content marketing guy Newt Barrett turns around conventional wisdom, suggesting that instead of working to develop a unique selling proposition, you develop a Unique Buying Proposition. This is more than a semantic turn. The UBP forces you to think like your customers. It changes the question from “Why should they buy from me?” to “Why do they WANT to buy from me?”

You can read Newt’s complete case here.

Would you do a better job buying this...

In the meantime, I’ll add this thought on selling: People will spend more to buy something they want than something they need. The corollary is that they’ll do whatever they can to avoid buying what they need, whereas they enjoy buying things they want.

So even if you’re offering business-to-business products or services, there is a benefit to communicating in a way that helps people WANT to buy what you’re selling.

... or this?

If they feel the product has value-added benefits, some kind of cache, or is exciting and transformative, they’ll buy more readily (and tend to be more pleased) than if they buy something because it has the lowest price or simply fills an urgent need.

That’s the beauty of Newt’s concept of the UBP: It helps your prospects to see your product as something they WANT to buy.

How fast can one company lose customers?

According to Shelly Palmer at imediabytes, Sirius/Xm Radio lost $36 million in Q1. And that’s nothing. It lost 400,000 customers — which I’m thinking is more customers than Johnson & Johnson lost back in the 1980s when someone started putting cyanide in its Tylenol products. siriusxm_sirius I mean, 400,000 is a mid-size city. It’s a lot of customers. I’m not sure you could get rid of customers that fast if you paid telemarketers to call them up at dinner time and swear at them.

And if you’re the folks at Sirius/XM, it’s the kind of number that puts you into a full-blown panic attack. When you lose 400,00 customers in 3 months, you start asking questions like, “Are we doing the right thing here?” and “WTF?”

My personal experience is that I had been a subscriber for 2 years when I got a note from Sirius/XM in February siriusxm_xm warning me that I would no longer be able to access programming for free on my computer unless I paid for the full year in advance right away.

It annoyed me, and I immediately assumed it was a cash-grab. But I bought the 12-month subscription because I thought it was important to me. Two weeks later I lost my job, and a week after that, in an effort to cut all unnecessary costs — and because I was irritated at being leveraged in the first palce, I called to cancel my subscription.

Their response? The nice lady with a Punjabi accent asked if they could keep me as a customer if they reduced the annual subscription rate by 50%. Now I was really mad, realizing that all along I’d been paying twice what they were willing to take. I told her no.

A month later, I got a direct-mail piece asking me to come back at 4.99 a month for six months — 38% of the original price. I suppose this was supposed to entice me. But it made me feel even more stupid for having paid $12.99 in the first place.

There’s one other thing: All along, Sirius/XM has advertised that it’s commercial-free radio, which should be worth paying for. But it’s not true. If you listen to any syndicated programming that’s re-broadcast via satellite, you’ll get the same amount of commercial time as you would on commercial radio.

And if you listen to their original programming — some of which is really pretty good — you still get advertising. And it’s the most irritating kind: low-budget stuff for whole-body cleanses and businesses that you can run from home without any skills or experience required.

I originally bought my XM subscription because I didn’t want to be my own DJ; I’d rather have someone else do it for me. But these are hard times, you know. Worst times since the Great Depression. So now, when I get in my car, I plug in my i-pod or put in an old CD. I still don’t want to be my own DJ. But I’m guessing that 399,999 other people agree with me that it’s not all that bad a job.