I’m a fan of Larry Levine, he provokes thoughtful discussions. Recently he led a discussion around value creation comparing two organizations with very different value propositions, Walmart and Nordstroms. The conversation was interesting, a little confusing. Some were taking positions the “high touch” of the Nordstrom experience is superior to that of the low touch, low cost (?) experience of Walmart.
Clearly, both companies have very different strategies around their customer experience and value proposition. And their respective customers don’t expect a convergence of those strategies. I happen to shop at both, and I enjoy and value the experience I have in each. But I choose one over the other, depending on what I am trying to achieve.
And I think this is where we tend to misunderstand value. Depending on what they are trying to do, what customers value in their buying experience will vary. Yet, too often, we think of it as an absolute.
Sometimes customers want a simple, efficient buying process. They know what they are doing, their decision represents low risk (not necessarily low investment), they want to make a decision and move on. High touch is a distraction, it’s not important, and creates no value in what they are trying to do, in fact it frustrates them and slows them down. They want a very efficient, easy buying process. If possible, the process would be fully automated.
But, we, too often, think the more we pile on, the more attention we give them, the greater the value we create. We go through the motions we always go through, frustrating them,
Those very same customers, sometimes value a very high touch, very interactive process. But the issue they are considering, the problem, as they define it is very different. It may be in an area where they have very little knowledge or experience. It may be something they haven’t dealt with for some time or ever. It may represent a very high risk, even though the investment may not be overwhelming.
They struggle with buying, they may not know how what they should be looking at, questions they should be asking, who should be involved, or what their process should be. These require higher levels of engagement from sellers, helping them navigate the process with confidence.
As we look at these, there is no absolute notion of value. How we create value, must be relevant to to what the customer values. Providing more than that needed could actually have a negative impact on customer perception of value.
We need to match our value creation strategies, with that which customers define as representing value.
Stated differently, value is always defined by the customer.
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