The Value Of Providing Value
The PHC industry can learn a great deal from other branches of the service sector. For example, note the competition between Wal-Mart and K-Mart, the major players in the “sell for less” retail game.
Both chains launched at about the same time. K-Mart had a jump start with an existing chain of Kresge stores. Wal-Mart began from scratch. Both stores were on a mission to deliver products people need at a price they could afford. Today, Wal-Mart has not only surpassed K-Mart, it is now the largest corporation in the United States, while K-Mart is struggling just to be relevant.
On the surface, one might suspect that Wal-Mart’s lower prices are the key to their success. Low prices are certainly important to their customers but low price is only part of the value equation.
In their quest to be of value, Wal-Mart has developed amazing operational efficiency. They not only run an efficient enterprise, they teach -- actually, it’s more like “require” -- their vendors to be more efficient as well. This allows Wal-Mart as well as its vendors to be profitable while offering a broad selection of goods unmatched by any other discounter.
What else does Wal-Mart do that is so special? They greet customers with smiles and they keep the shelves stocked with goods that people want. Wal-Mart would probably flourish even if their prices were higher than K-Mart’s offerings. In short, Wal-Mart delivers the best value to its customers.
A bit closer to our industry, Avon, Mary Kay and Tupperware all seem to prosper in spite of the fact that similar products can be found for less money at the behemoth discount retailers. For these direct-sales icons, the key to success is to take customer service beyond what the big discount stores can deliver.
While plumbers complain about home centers that sell toilets and faucets, Avon and Mary Kay are no doubt selling cosmetics to people that work for their “mega-competitors.” Their value proposition is so strong they actually recruit customers to become sales associates.
What do all of these successful businesses have in common? Their success can be traced back to their focus on being valuable to their customer. It’s fair to say that just by being in the PHC industry, we’re intrinsically more valuable than, say, 37 shades of blue eye-shadow. Unfortunately, we’re often guilty of assuming that our customers automatically perceive our value. How can we prove our value to our customer?
Earn ReferralsReferrals are so important for Tupperware that their sales process begins with referrals. What if we had a Tupperware-like fetish for referrals? I’ll admit, it’s a bit of a stretch to have a “Potty Party” where we’d invite all the neighbors over to see the latest china fashions, but that doesn’t mean we can’t ask for a few names.
Your entire company should begin earning the right to ask for a referral from the moment the CSR greets your customer. After all, CSR stands for “Customer Service Representative” not “Order Taker.”
What if your plumbers/service techs were thinking “referral” from the time they parked their gleaming trucks in front of their customer’s location? Obviously, their primary goal is to take care of a problem. But if they viewed a clogged condensate drain as an opportunity to earn a referral, you can bet that they would be friendlier, neater and more thorough while taking care of that problem.
As an added bonus, complaints would be fewer and sales would be higher. Your people would be treating your customer as someone of value, which in turn makes your company more valuable.
Use Ad Codes
Give every employee an ad code in your lead tracking system. Whenever a new customer calls, find out if they have a business card coupon to use and if so, get the employee’s name. If another customer referred them, look in your history to see who last served them. Laud every producer of referrals because referrals truly are a measure of your value to your customer.
Be On TimeIt’s fair to say that people in this Internet/cell phone/ Soccer Mom world are busier than ever before. If we show up for a service call within the final 15 minutes of our scheduling window, it’s likely that we’re going to be dealing with a harried customer who doesn’t have time for thorough service.
Achieving prompt arrival is like spinning plates, but maybe we’d try harder if we consider the sales and service opportunities lost because we ran out of time.
Besides missed sales, we’re leaving the door open to more call backs and/or return visits just because we couldn’t be there on time.
Spend some quality time on every aspect of your operation that affects your promptness. Starting the day on time with the trucks stocked and fueled is probably a challenge for many of us, but it is worth the effort. Calling customers ahead of time, offering discounts for service at your convenience and just taking the time to do it right the first time are other ways to improve your on-time performance.
These operational nuances add up to more value for your harried clientele as well as cost savings for your company. The Wal-Mart thought process works like this: By being more efficient we save money. If we pass the savings on to our customer, we’re more valuable and we still earn a profit. This kind of thinking has been a major factor in Wal-Mart’s success.
Be NeatThis mantra is so old it’s growing hair in its ears, yet I still find neat and tidy contractors are the exception, not the rule. Taking pains to protect the work site against property damage saves clean up time and helps keep the customer on your side if something disastrous happens.
Neat service people reduce risks, save time and, most importantly, add value to the transaction. Customers will remember how clean you left their home long after they’ve forgotten your technical expertise.
While you’re thinking about it, find other ways to build value. Look at the way you’re stocking trucks, training your professionals, dispatching and anything else that directly affects your customers’ experiences with you.
Examine how each step of your business process might demonstrate how much you value your customer. Once you’ve determined how a process is valuable, you can begin to enhance the value by improving that process. You may also find that some processes just need to go away because they mean nothing to your customer.
Consider these two truths as you consider adding anything to your overhead:
- 1. If it’s in your overhead, you have to charge for it unless you like losing money.
2. The higher your price, the more challenging it is to prove your value.
By considering the customer’s perception of value in everything you do, you can become more valuable to your customer. This doesn’t mean you have to be the cheapest contractor in town. Wal-Mart prices are low because it’s part of their value proposition. Your value proposition probably involves higher levels of service at a higher price. Charge what you need to charge in order to be profitable, but by all means charge enough to be valuable.