From a business perspective, what is the most important focus you have? Shareholder returns? Profitability? Employee engagement and retention? Investor relationships? I would say that, while all these are important, none are as important as a Value Focus.
“Companies that solely focus on competition will ultimately die. Those that focus on value creation will thrive.” – Edward de Bono
At the end of the day, customers purchase your products and services because of the value those products and services add to their lives. As soon as your deliverable ceases to add value, customers move on to find something that will. So, why is customer value critical?
There is a mechanic in my town that I frequented quite often, not being one to buy new cars. In a particular year (that I had dubbed ‘Carmageddon’) I needed yet another repair. I had already spent several thousand dollars in repairs that year from my two cars and had established quite the connection with my mechanic, or so I thought. Upon towing my car to the mechanic and discovering that he could not repair it in a timely manner, I decided to do the repair myself as I needed to use it that weekend for visiting family. My mechanic was irate that I wanted my car back outside the shop and demanded that I pay him $70 for the 5-minute push into a shop bay. He then proceeded to tell me to get it off his lot as he would allow no repairs to be done on his property. He had every right to demand what he did, but he completely lost sight of the value I had in him as a mechanic and why it was that I cam to him. I’ve never been back. Now, he didn’t need my business to keep his shop open, but the idea here is that he lost sight of customer value and forced his process on someone who voluntarily paid for his services. My new mechanic is amazing, but I don’t go to him because of his personality. I go to him because he listens to my needs, provides excellent service and does so in a timely manner – all things that add value to me. I’ll pay for that.
What would the GM of a fast food restaurant be thinking if he dimmed the lights, put fancy tablecloths on the tables, removed the drive-through and walk-up registers, and began playing soft jazz? He would be completely misaligned with the value that brings customers to his restaurant. They are looking for speed, affordability and convenience. On the flip side, what would the GM of a fine dining establishment be thinking if he built a drive-through, brightened the place up, dropped the quality of the ingredients drastically to lower menu prices and forced you to order your meal at a counter before seating yourself in a hopefully clean area? Insane, right? That’s because the value you look for in a fine dining restaurant is the quality of the food, the ambiance, the impeccable service, etc. To change models for either of these restaurateurs would certainly spell doom to that business unit.
Focusing on Value Requires certain elements.
- Eagerness to listen to customers and what matters to them
- Willingness to cannibalize current profitability to invest in the product/service that provides the greatest value to the customer
- Avoiding measuring success based on internally focused metrics and focus instead on the value being created. What are your customers saying? Are they satisfied?
Why do countless millions overlook the abusive data privacy practices of social media and web platforms? Because of the value those platforms provide their lives. Why do you shop at that grocery store? Because of value you find in going there. Perhaps it’s convenience. Perhaps it’s pricing or quality. Whatever it is, it is what causes you to go back again and again.
So, why do your customers come to you? What value are you adding to their lives? How are you adapting to their changing needs and evolving values? Focus on the value your customers get from you. Never lose sight of it. It is the lifeblood of your organization.
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About MCG Partners
MCG Partners a woman-owned, Greater Boston-based consultancy specializing in executive coaching, leadership development, talent management, and organizational development solutions. We help businesses optimize success through the entire management life-cycle. MCG Partners is also a Predictive Index® (PI®) certified partner.