Business
What value can you offer your customers?
Business adVISE By Teresa Vise
The North Jefferson News
Getting and keeping customers is an expensive endeavor.
The average U.S. business loses half its customers in five years. Generating a new customer costs five times as much as keeping a current one and firms pay a steep price when customers stray to other brands.
In a slow economy, creating unsurpassed value for a customer so that they stay with you is even more important. So how do we create value?
Value creation in a firm takes a minute to think about. Ask yourself this question: Why does an individual make a purchase? The short answer is to fill a need. But the real answer is found in what motivates a person to do something to fulfill that need.
Psychologist A. H. Maslow developed a theory that characterized needs and arranged them in a hierarchy to reflect their importance called Maslow’s Hierarchy of Needs. Maslow identified five levels of needs, beginning with physiological needs and progressing to the need for self-actualization.
Physiological needs are the most basic. They fulfill the needs for survival like food, water, shelter and clothing. Pepperidge Farm French Toast Swirl Bread appeals to this need by stating “It doesn’t go with breakfast. It is breakfast.” Campbell’s Soup hits the mark with “Mm, mm, good!” as does, “Got Milk?”.
Next up the ladder you find safety needs which include security, protection and avoidance of the unexpected. State Farm Insurance appeals to this need by saying, “Like a good neighbor, State Farm is there”. Timex sells reliability with their “takes a licking and keeps on ticking”.
Third are social and belongingness needs which include the need to be accepted by an individual or group. Think about Olive Garden and their tagline, “When you’re here, you’re family”. How about our very own Peacock Insurance in Gardendale who insures “the church, the steeple, the pastor and the people”.
Fourth is the esteem need such as a need for a sense of accomplishment, the need for respect from others and the need to perform better than others. This is a universal human trait that emerges after lower order needs are satisfied. This may present in the purchase made to upgrade an airline seat, to have premium concert tickets, or as Sony touts, “Like no other”.
Lastly, and the highest need, is self-actualization. This is the desire for a person to reach their full potential. Many educational tours appeal to this need with an appeal to a person’s talent or capabilities.
It may include a trip that includes a course of study such as language, history or cooking. Nike’s famous “Just do it” is right on the mark for reaching potential.
Self-actualization appeals to the desire to experience and learn something new such as at GE where “we bring good things to life”.
Understanding how your product fills one of these needs and fits into the experience desired by your customer will help you to understand how to motivate that customer to act on a purchase.
Have fun with this idea over the next few days as you think about what your customers need and what you actually provide to them in the manner of product or service. This will get us ready for the next few weeks’ articles which will center on branding and image.
Remember to take care of your customers or someone else will.
Teresa Vise is the marketing, growth, events and special projects co-director for the Fultondale Chamber of Commerce. She received her MBA from Samford University and is a speciality sales professional with Sanofi Aventis. She can be reached at teresa.vise@sanofi-aventis.com.
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