“The art of progress is to preserve order amid change, and to preserve change amid order,” said mathematician/philosopher Alfred North Whitehead.
Successful businesses walk this fine line and know that if they don't transform their organization, they won't grow. To thrive, they face change head on.
How, then, do you preserve customer loyalty amid change? When you revamp your building (or move to another location), change leadership, merge with another company or completely redefine your product or service offering, how do you maintain customer loyalty?
This week's example is a nonprofit organization that is shaking things up by expanding its building. During the transition, a few programs are moving to another locale, and some of its current programs will be put on hold. Discriminating SWOT Team members, how do you manage customer loyalty during and after a transition?
Thank you, savvy SWOT Team members, for sharing your expertise on the quality-versus-cost pitch. Read on to see your peers' best advice.
If loyalty absolutely bores you, or if you've got perfect pitch, write to us and ask our SWOT Team about your dilemma. Tapping into our collective experience, strength and hope works. You could win a free copy of our book, A Marketer's Guide to e-Newsletter Publishing.
SWOT Team, unite and make a difference!
• Give advice about this issue's dilemma.
• Read your peers' responses to the previous dilemma (below).
• Submit your own dilemma.
This Issue's Dilemma
SWOT Category: External Opportunity
How do you maximize loyalty during a transition?
Here my dilemma: My nonprofit organization will be expanding its building. The new space will be great, but during several months of construction some programs, such as day care, will need to move off site, and other programs will be disrupted or put on hold.
We plan meetings with current clients/patrons to let them know what's coming, how we will accommodate them during the building project and to get them excited about the prospect of new facilities. Beyond good communication, what else might we do to preserve loyalty during the transition, so that our patron base and revenue stream remain in place?
SWOT Category: External Opportunity/Internal Strength
How do you promote high-quality products that require time and dollar investments?
Our culture seems geared to using whatever is easiest, taking the path of least resistance. Our higher-quality library databases require a small investment of time in order to learn how to maximize their use. It is very hard to convince people this time spent is a worthy investment.
For example, how do I get my students and faculty to use my library's high-quality resources instead of the junk they find on the Internet using Google and other search engines? How do you compete with a product that sells ease of use, convenience, and requires little thought or effort—and gives immediate gratification—even if what you are getting is poor quality?
Could you please ask the for-profit businesses out there how they promote high-quality products, when their competition offers low-cost solutions?
—Steven Bell, Director, Paul J. Gutman Library, Philadelphia University
Summary of Advice Received
Steven, many of your peers are passionate about this subject. They gave a variety of sound advice, which should give you a good framework for convincing people quality is worth the time investment. If you look at the creative approaches the SWOT Team recommends, we're sure you'll find a way to approach this subject the next time you pitch quality over free resources.
The recommendations we received revolve around the following four possibilities:
1. Understand your audience's value of the product.
2. Gather research about the competition.
3. Educate your audience about the product's value.
4. Change your offering to reflect customer demands.
1. Understand your audience's value of the product
The first thing to do in preparation to get your point across, is to understand your audience and know why they behave the way they do. Try to step into their shoes and discover why one product may be more appealing to them than another one. Once you do this, you are better suited to make a more persuasive argument for your case.
Suzy Teele, Managing Partner of Aceda, suggests the following way to look at the value of the product in the context of your target audience:
The bottom line always comes down to understanding the value to the intended audience. For instance, in business, if the project is for internal use, then don't make a big deal about always having the absolute highest quality. However, if the project is for a prospective client, a shareholder's meeting, etc., then the company should think twice about the quality investment and take the higher ground.
The same would hold true for your situation. Rather than berating Google or the Internet, educate your customer about the best times to use the Internet versus using the library. For instance, you may want to point out that preparing for a final exam or writing a pape, that is the majority of the student's grade is something that can be done more effectively at the library. Then explain WHY.
Also, incorporate the use of these Web resources into the use of your high-quality resources. Whether you like it or not, your audience has grown up with them and is comfortable with them. Educating your customers on the proper use of each type of resource and the potential consequences (in a positive light) of not using the right ones at the right time is always your best weapon.
Bob Close, President of Motion Concepts, believes you must try to understand your target audience's thought processes around this subject. In his opinion, there may be no convincing a die-hard Internet user that alternative resources are more valuable:
Perhaps it is more relevant to consider why the researcher actually prefers the Google approach. I believe you may have jumped to a conclusion that it is only for ease of use. I have been conducting market research for 30 years in the electronics, automation and control industries and have found that many of my colleagues prefer to use the Web for a foundation, rather than available library-type resources, for the same reason as me.
We have found that by concentrating on primary source information or the references found in libraries, one spends too much time on data review and opinionated writings that give one side of a market picture. Given the same time on the Web, I can review a broad swath of data on a market, including competitor information, government data, trade organizations, and company white papers, which allows me to see a much broader view. After understanding this overall picture in a fraction of the time it would take in a library, I can then focus on those elements of detail I am seeking. This approach will help my client develop competitive advantage and branding strategies.
2. Gather research about the competition
After you begin to understand your audience, the next step in creating a compelling audience is to research your competitors' offerings.
Justin Evans, Product Manager for Clopay Building Products, provides a formula for your research:
Mean time before failure! This is where you need to do your competitive research. How long will your quality product last verses the competition's less expensive product? It is a simple math equation that has several variables: Total Cost of Ownership/Year (T) - Mean Time Before Failure (M) - Lifetime Repair Costs (R). T = (Product Cost/M) + (R/M). If your product's “T” is less than the competition's… you are marketing the right product.
Barry Caplan, Principal for Team I18N, offers another approach for comparing your product to the competition's:
This is an interesting problem. To paraphrase Yogi Berra—or someone, “Everyone talks about quality, but no one does anything about it.” I am currently beginning a study of actual quality of translations on behalf of translation and localization vendors and buyers. (Shameless request: sponsors of this research are welcome to contact me). Currently, everyone in this space says they provide “the best quality,” but no one can say what that means. Having both bought and marketed these services, this has bothered me to no end.
My hypothesis with this research is: a model can be built with simple inputs that will be *predictive* of the actual quality delivered at the end. In other words, with information available at any stage of the product, you can predict the actual quality that will be delivered, with a confidence interval, of course. The goal is to change the overall marketing of this niche service from a beauty contest into one where quality level dominates. Buyers can select the quality they want to buy, and sellers will cluster according to what they can deliver. Prices will reflect quality, instead of arbitrary, commodity-style pricing with no vendor profit.
My suggestion is to come up with some simple metrics for quality of information and publicize them. Get buy-in from your users. Clearly, time is a factor to your users' idea of quality of information—using Google costs a lot less in time than using library databases. So I would focus on a few levels of quality available and instances when each level is appropriate. Pitch it so that the value of moving up in quality level is seen as worth the additional investment in time (if in fact it is!). But accept that just like sometimes a quick and dirty translation is sufficient, so too is a quick and dirty lookup on Google.
3. Educate your audience about the product's value
The majority of the advice we received fell into this category. After you have taken the steps to understand your audience and have the research to back up your findings, educate them about your quality product's value. Educating your audience can take many forms.
Laura Schieber, Principal for Right Angle Marketing, gives this excellent advice:
It seems to me that people only care about quality when they understand why it matters. In your library example, I would think the students would begin to understand your logic when you tell them, “Hey, you aren't going to do well in my class unless you use the library resources.” Also, it may help to explain how the library databases will help them differentiate their work both in the class and later on.
Everyone has access to Google. It's a great resource, but when you want your work to distinguish itself, you need to go farther. In grade terms, maybe Google is a C and the library is an A. I think this is the case for all people. They always use the cheapest service or product unless they have a compelling reason not to. The reason will vary: from prestige or fitting in to convenience or service.
Also, as an aside, “quality” is a word that is so overused that it hardly has any meaning at all. I always tend to steer people away from using it whenever possible. There is almost always a better, more specific word to use instead.
Brian Flora, Business Development Manager for Paperless Business Systems, Inc., recommends using an analogy to educate your target audience:
Cost versus Quality is a common dilemma. Using analogies that clearly illustrate the pitfalls of being cheap and that the prospect can easily relate to work well. One of our favorites is the $7 haircut analogy. It may be cheap, but how many dates did you lose because of it? And how much are you going to spend to fix it? The message is that it is definitely worth a few extra bucks to get something of quality because you'll pay for it one way or another.
Another interesting analogy comes from Rhonda Barnes, Vice President Communications at Ram Realty Services:
You are lucky in that you are at the Philadelphia University's Paul J. Gutman Library: name recognition and a constituency that wants to learn and grow. I would begin by emailing students and staff with two pieces of art side by side. The first picture is child's artwork, and the second is a contemporary piece of art and obviously a masterpiece.
Both pictures, at first glance, look nonsensical and scattered, as some contemporary art can look to some. The captions can read something like “Your paper using Internet data,” and “Your paper using the library's resources.” You've accomplished your goal in pictures—you can produce a picture (term paper/thesis/book) that has no “depth” or foundation—or, you can produce a masterpiece with the proper tools, education, and quality resources.
Dan Regan, Vice President of The Lightbulb Lab, Inc., advises employing a proven sales model to make your point:
Steven, I'm glad you are asking about this now, and not five years ago, when there existed a very dangerous mentality that “I found it on the Internet, so it must be true.” By now, people have been burned enough times by non-verifiable “facts” and bogus email chains to know that, while the Web is a miraculous fountain of information, the data found there needs to be rigorously checked for accuracy. That's where you come in.
Anybody can type “cure for common cold” into Google and accept the first answers that come to the top. Yet few people have the time, discipline or desire to make absolutely certain that the information offered is legitimate. I presume that by using your databases and resources users can be confident that the data presented is from more legitimate sources and can, therefore, trust that the information is “clean.” But, here's the hard part—giving the devil his due.
Might I suggest taking a page out of premier luxury automotive sales? Here's a “word track” that we often teach sales professionals in such companies. It's an effective way to handle buyers who are considering a competitive vehicle without getting defensive or confrontational. It's called “RACE.” If you were selling “Brand X” cars, it would work like this:
R = “Respect.” (“So, you are also considering buying a Brand Y. That's a good car.”) This is the “give the devil his due” part. Let's face it—BMW, Jaguar, Audi, Mercedes, Volvo, Saab, Lexus, Acura and Infiniti all build very good cars. If your job is to sell one over the other, you are not selling against junk. This first step shows that you are not afraid of or defensive about the competition.
A = “Ask.” (“Tell me, what is it about Brand Y that you like?”) This reveals the customer's primary “buying motivation.” Let's say that the answer is “safety.”
C = “Compare.” (“Safety—that's interesting. Brand X and Brand Y both have six airbags, ABS brakes, and front crumple zones.”) In this step, we show the ways in which both “products” are similar.
E = “Explain.” (“Brand X is an all-wheel-drive vehicle. That delivers better handling in poor driving conditions, which can help keep you out of an accident in the first place.”) Here, you point out where your product is superior, without disparaging the competition.
In the library, your “RACE” might look like this:
R. So, you usually use Google or Yahoo to get the information you need? That's a great place to start.
A. What do you like best about using the Internet as a research tool? (Let's say the answer has something to do with convenience, as you stated in your question.)
C. Much like the Internet, you only need a vague idea of what you are looking for to get started using our library database. There's an almost endless supply of available data. And, just like the first few times you used Google, it takes a little bit of practice to figure out the tricks of performing a good search.
E. Once you've learned those tricks, you'll be accessing information that has been properly researched, attributed, verified and completely reliable from an academic or empirical standpoint. You don't have to wonder if what you are reading is a fact—or a marketing tactic, an urban legend or somebody's random musings. Speaking of random musings, I'm finished. Good luck with your challenge. Just remember, better quality is always cheapest in the long run.
T. Buyens, in Marketing Services for Cooper Menvier offers up two equations, one for quality and one for low cost:
B2B situation. Let us take a look at my definitions of both quality and cheapness of products:
Quality= cost-effectiveness x service(+) x reputation(+) x other marketing instruments(+).
Cheapness= cost-effectiveness x service(-) x reputation(-) x other marketing instruments(-).
First of all, quality products do not have to be very expensive in the long run. Let us think of maintenance, replacement of accessories, or the lifetime of a product. In other words, the high price is easily accepted. Second, it is very important to understand that quality is created by an excellent mix of marketing instruments (service, product features, communication, etc). In the minds of customers, cheap products lack these investments. Even if these investments exist, customers see every flaw in these cheap products. In every economic situation, rational customers have realistic prices in mind. So, maximum prices are applied. To conclude, the best recipe for a quality product is cost-effectiveness in the long run, an excellent marketing mix, and a high acceptable price.
4. Change your offering to reflect customer demands
If you're having problems selling your offering “as is,” you may want to redesign or repackage it so it is easier to use or better addresses your customers' needs.
An undercover SWOT Team member provides this alternative:
Simply put, library indexing and the databases that run them are great for librarians. But students and faculty don't spend eight hours a day or more in the library replacing books and using the database. Finding information in a library for an inexperienced user can take hours, whereas Google gives gratification in 0.31 seconds or less. I can only use my experience to qualify this: I search for a book at the University of Guelph. It turns out that the book is checked in, and on the shelf. I know the book title, the author, and the index number. Now what? I have to search through five floors and countless shelves to find my research.
Instead, how about a graphical interface that shows (via a floor plan) where I can expect to find my book? And how about a printer that I can print off the map? It's a classic case of over-engineering. I recommend keeping the database intact, as is, but integrating another “ease of use, convenient” interface. The point is, you cannot dismiss Google's popularity, because it is functional. For you to compete, you must integrate that “ease of use” into your database, maybe even integrate with Google. The easier it is to use, the more students and faculty you are going to draw. You are not going to change the student, so you might as well change your database.
A High-Quality Job, SWOT Team!
We did our best to provide a thorough overview of your responses to this timely topic. All of the advice we received was insightful. Thanks for your participation. We appreciate it!
Continue reading "SWOT Team: Customer Loyalty in the Midst of Change" ... Read the full article
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