Guest Blogger

Branding, marketing & sales are all about the promises you make but customer experience is about the promises you keep.

The Value Proposition

The way a company reflects its culture is in their value proposition.

In the past marketing could make a lot of claims some of which really didn’t hold water. But now in a world of social media they get quickly found out.

A value proposition is a promise made by a company about what experiences a customer will have when buying or using their product or service. It is a statement, which identifies clear, measurable and demonstrable benefits a consumers will get from buying a particular product or service. It convinces consumers that this product or service is better than others on the market and they will receive greater value by buying and using it.

The value proposition can give companies a competitive advantage.

Those value proposition that an organisation is directly responsible for are the promises made to customers in their marketing & advertising or by their customer facing staff.

Take for example Miele who ran a well-known advertising campaign saying that their products are “Designed to last for 20 years”. So customers were willing to pay a price premium for their products because of this reassurance made in this advertising promise.

However, Miele actually only guarantees the vast majority of their products for 2 years (with a very select few having a 5 year guarantee). Imagine how betrayed a customers felt when they paid a premium for a product that they believed that would last for 20 years, which is what the advertising promised them, only to find out that they had to pay for a repair after 3 years. This broken promise results in destroying trust in the brand and leaves the company open for bad word of mouth & social media coverage and ultimately lost customers.

Then look at Le Creuset, again another a premium priced product, who offer a lifetime guarantee on their products and they actually honour that promise. I know this to be true because I brought back a saucepan after 25 years, which developed a chip in the enamel, and they replaced it – so worth what the price premium I paid absolutely and would I buy from them again – definitely!

Customers value of the experience is set by their expectations. So what are the factors that set their expectations?  Some factors are advertising, price paid, past experience, reviews, reputation, emotional connection with purchase, etc.

So for example you will have a very different expectation if you are travelling on Ryan Air vs. Virgin.

If your Ryan Air flight was late or the plane was a bit dirty or the staff were indifferent, well its what you come to expect when traveling on Ryan Air. Why?? Because you have travelled with them before, you have heard Michael O’Leary speak, you know their reputation and you probably haven’t paid all that much for your ticket. But if Virgin or Qantas or Cathy Pacific treated you in the same way you would be extremely disappointed and would likely tell lots of people about it.

Again if you were going to a McDonalds vs. booking a Michelin star restaurant to celebrate an anniversary.

If your experience at McDonalds was fast and the place was clean and the food was hot and they helped to entertain your children – well it ticked all the boxes you expected and you would be happy.

Whereas with the Michelin star restaurant which had great reviews in the press & from friends, you had to wait four months for a table, you are going there to celebrate a special occasion and it is quite expensive. Your expectations for the restaurant are on the roof and less than perfection means you will be disappointed.

This is where the rubber hits the road. And where the service provided by an organisation is an integral part of the product offering – think Apple or John Lewis. Both companies designed their services as a critical part of their value proposition. Because to both of these companies it’s not just about the one point when you buy the products its really all the relationship they want to have with customers and the ways they support and look after them.

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