Tell me, what sort of organisation would advertise the fact that using their service creates fear in their customers, except perhaps roller coaster owners!
This is what British rail franchise company East Midlands Trains is doing at the moment. The intent of the advert is to address the serious problem of customers (that’s passengers to you and me) buying the wrong ticket. Up to One fifth of rail customers buy the wrong ticket as this BBC news report reveals.
One of the most worrying consequences for passengers is that if you ‘under-buy’, in other words make a purchase mistake you get a fine or as its euphemistically called a penalty fare. This means you are treated as if you are a fare dodger who has the wilful intent of avoiding payment. In other words the company regards you as a criminal. As harsh as this seems considerable effort is made by rail companies to make passengers aware that they need to buy the correct ticket in advance of travel.
All the same because of the complexity of their own ticketing arrangements passenger ticket fear is explicitly recognised by East Midlands Trains as fear of financial punishment and fear of being cast as a law breaker! Whilst the issue of rail fare evasion is serious I don’t think making fun of passenger fear in this way is appropriate.
I’d like to discuss two things in relation to rail passengers buying the wrong tickets from machines. Firstly the use of ‘fear’ in marketing communications and secondly the issue of value destruction. The latter is something we cover in our book Value-ology.
Fear in marketing
There’s an old adage in sales and marketing that ‘fear sells’. Disturb the customer about an inadequacy or a lack such as lack of beauty or bring up an anxiety such as fear of leaving loved one’s with huge funeral bills when you pass on. Fear is marketing 101. BUT it seems to me that the East Midlands Trains marketing team that came up with idea of, and authorised the use of ‘fear’ in the advert above have a mistaken understanding of the use of fear in marketing communications. Either that or they think it’s funny that their passengers are fearful. Why would you brag about the fact that your ticketing system creates customer fear rather than addresses a customer fear?! It looks like chopped logic to me. The marketing team are sort of in the right ball park but misses the point of how to use the idea of fear in advertising.
I do realise that the advert refers to an explanatory brochure that seeks to demystify ticket types but there is a difference in recognising customer feedback about their fears of buying a wrong ticket and then playing straight back at them in this way. I would have thought something more like:
Take the stress out of buying your ticket.
Buying the wrong ticket can result in penalty fare
You might worry if you have bought the right ticket for your journey
Our simple ticket guide will help you choose the right ticket for you
The potential for value destruction by dysfunctional organisational or individual activities has ben researched by marketing academics in recent times. See:
Ple,L. Caceres, R.C. (2010) Not always co-creation: Introducing interactional co-destruction of value in service-dominant logic. Journal of Services Marketing, 24/6 430-437.and
Echeverri P., & Skalen P. (2011). Co-creation and co-destruction: A practice–theory based study of interactive value formation. Marketing Theory, 11(3), 351–373.
Value can be destroyed by the supplier or the customer through a variety of means such as impoliteness, aggression, lack of attention, humiliation and so on. .I realise that fare dodging needs a deterrent and the official identity of revenue protection officers serves a powerful purpose in that regard. The RPO’s are invariably very polite and only assertive when they have to be. That said, the sense of potential public humiliation and edginess I have witnessed as a commuter as the Revenue Inspectors board a train (dressed in somewhat paramilitary body vests) is palpable. Even when the inspectors ‘let the wrong ticketed passenger off’ with a warning or just payment of a full fare rather than imposing a fine it seems to me that customer value is being destroyed. Fellow passengers have witnessed the interaction and so being ‘shamed’ in public is not ideal.One thing that seems to be overlooked is that the inspector-passenger interaction takes place in a public service-scape (see Servicescapes: The Impact of Physical Surroundings on Customers and Employees. Mary Jo Bitner 1992 Journal of Marketing). This means that all passengers within sight and earshot are also having their customer value (pleasant and relaxing journey) destroyed.
Of course in the world of behavioural economics you get people to change their behaviour with rewards and punishments. Yes dear customer we are cast as simply ‘dogs to be trained.Of course the whole purpose of revenue protection is to ensure cheaper prices (economic value) for us all. Seems sensible, but as academics Brock and Colgate point out firms rarely deliver just one sort of value. See Customer Value Creation: A Practical Framework J. Brock Smith and Mark Colgate Journal of Marketing Theory and Practice Vol. 15, No. 1 (Winter, 2007), pp. 7-23.
We use a customer value model called the Value Onion in our new book Value-ology to show the interrelated types of value created by firms:
Surely the best solution to the revenue and fear problem is to have and indisputably simple and clear ticketing system rather than a Byzantine system that creates fear in customers and has the persistent latent potent to destroy experiential customer value?
One of the central ideas we cover in our marketing and sales book Value-ologyis the art of value proposing as a central aspect of consultative selling in key account management and professional sales.
Value proposing is what sales and marketing people do when they are crafting and pitching a value proposition in face to face customer situations. A value proposition is a thing whereas value proposing is a behaviour.
A fascinating article in the HBR blog Emotional Intelligence has 12 elements handshakes our research in Value-ology that social intelligence is an essential competence of experienced and credible b2b sales and key account management executives.
In our book we call the social domain the ‘missing middle’ of sales and marketing management understanding. Something so obvious (people deal with people) that it hardly warrants much examination.
We have found that careful attention to the social contexts of supplier – customer interaction can be difference between success and failure. In Value-ology we describe four social contexts that matter in business:
Approaching, Incorporating, Unfolding and Relating. Each of these demands a different and particular way of behaving and speaking. If a sales and marketing executive reads these wrong it can directly result in the loss of business.
Co-creating customer value requires dialogue. The sharing of thoughts and ideas to improve understanding. Do this in a pro-social way with commercial realism and your bottom line will increase.
Any owner of a small-medium sized business will tell you that they have built their reputation on personal attention to the customer and the knowledge and expertise they have gained in the market sector they specialise in.
Brand identity is hugely important in any business because it’s a promise of value. The logo symbolises what the business stands for and implies everything about its values and what you can expect as a customer.
I think you’ll agree with me that the creative idea in this design really conveys the values of Alex’s business. The clean lines imply attention to detail AND at the same time it is imaginative and thought provoking with its clever twist on Alex’s initials – AJ – which implies the creative capability that makes such a difference in home re-modelling.
In the language (sic) of Semiotics the logo signifies something more than what it says which in this case is the creation and delivery of exceptional customer value.
Now value in this situation doesn’t just mean the price. As we explain in our new book Value-ology value is a unique and subjective assessment of what the customer gives for what they get. In the case of home developments it might be ‘more convenience’, ‘space to entertain friends’, ‘feel more relaxed’ etc
Back in 1977 Lynn Shostack said ‘services are often inextricably entwined with their human representatives. In many fields, a person is perceived to be the service’.
This is especially the case with a small business. So the logo is not making a statement about some objective thing called a company it’s making a statement about YOU as the owner.
This ties directly to my research about sales interactions and crucial need to establish and continuously maintain your eligibility and credibility as a service provider. There is more on this in chapter 3 of our book.
So the next time you go for a brand re-fresh remember it’s a key aspect of communicating your value proposition. Don’t treat it as merely an indulgent creative fantasy ensure it symbolises the very essence of your service offer.
Okay! So sou might know what your customer’s need but do you know what they value?
Watch this YouTube introduction to see what I’m talking about Value-ology
Meeting a need is solving a problem delivering value is being relevant.
Academics Vargo and Lusch describe value as idiosyncratic, subjective and meaning laden. This means that value is a moving target that is only ever determined by the customer. A supplier can never tell a customer what value is.
Suppliers can only ever propose value. That’s why of all the marketing tasks a CMO has to do the creation of a value proposition can be the difference between success and failure. Your offer has to address some matter at hand in the world of the customer.
Your products and services will of course be designed to solve a problem that is generally understood. Zoning in on value means improving your customisation.
Value-ology is packed full of thought provoking ideas and practical tools that can transform your marketing and improve your ROI
There is one thing that will drive business people crazy in 2017. This is the turf war between functions and departments in their own businesses. Why on earth do you fight internal battles when the real war is out there in competitive environment?
When you cut away the crap, the euphemisms and excuses for lack of internal cohesion alignment and performance you are left with one blindingly obvious problem. It’s not organisational culture, its not business structure, not lack of innovation, poor financial management, or any of the myriad of symptomatic challenges and issues that businesses face.
The one issue that causes the most dysfunction in any organisation are the assumptions that each and every individual in the business makes about Value and how those assumptions then drive the actions and conversations in the business about what customers need and the solutions that will help them.
In the soundbite world of management one the the beauts is the use of the term ‘added value’. Wow! that sounds so ‘top management’ doesn’t it. Use the phrase liberally and you infer to your listeners and readers several things…you are giving the impression that you are someone interested in creating something better and extra (usually for customers and it could be for other stakeholders too like lending banks, funders etc) you also give the impression that you are value savvy, that you have special insight into what is needed by customers and markets which in turn then drives every single commercial decision downstream from product and service innovation and development, organisation structure. pricing, communications. Use of the term also shows you as a ‘member of the management club’ perhaps with an MBA. It shows you know how to talk the talk. It means you use management speak in a way that suggests you have a superior way of going about management compared to others less educated and experienced.
Now can anyone see a problem here?
How the bloody hell can you talk about ‘adding value’ when you haven’t defined and clarified exactly what is meant by the term ‘value’ in the first place? What sort of value are we talking about? Value for who? When will the value be realised or crystalised? Is the value constant? Is the value multi-faceted? Is the value embedded in the product or experienced through service and relationships? What if its both? What if value only happens in use? How is value c0-created? What is the context in which the value is to be created and delivered? Is value for a patient the same as government? Is value for a higher education student the same as a secondary school pupil? Is value the the same on Monday morning and Monday afternoon? Is value the the same for a consumer and a business customer? Do you really want people in your organisation to ask What the hell does this have to do with anything?
Successful senior executives spend time and energy on getting a deep understanding of value. They realise value is a fast moving ever changing target. So the one thing that will drive them crazy is when you can’t be arsed to put the same time and energy into to justifying your proposals and ideas with a solid well informed understanding of value. Value to the customer, value to other stakeholders, value to the firm, and value in context.
Simply put to stop your boss going stir crazy in 2017 you need to be a Value-ologist
Someone is an expert in Value-ology. Someone who really gets what what value means for your business and is able to craft a compelling vision of future value through a relevant value propositions and proposals.
You can learn more about ways to create, deliver and communicate value in:
Can anyone tell me if they’ve come across any new earth-shattering insight about marketing that hasn’t been discovered already?
Marketing is all about new ideas
The impression of marketing given in social media is that it is a profession that is forever in a state of flux and that if you don’t keep up with change you are doomed to failure.Well there’s an old trick for a start! Fear sells – terrify your prospect that their future career or business is in jeopardy if they don’t take on your ideas.The principles of marketing are enduring and are unlikely to change. This is because they combine into a particular managerial world view. What Thomas Kuhn called a Paradigm.
Marketing is all about old ideas
Now the thing about paradigms is they create acolytes. Acolytes are people who are introduced to the mantras and creed of a world view and fall in love with the paradigm because it makes sense of the world in a way that was hidden to them before. The paradigm is so helpful that the acolytes then evangelise about it (tell every and anybody that it is ‘the way’ and the only way and all other ways are wrong.
People new to marketing are initiated into the rites of the marketing profession, its principles methods and language. Many of these people are at the early stage of their commercial career others may come to marketing mid-career whilst studying an MBA or similar.
Seasoned business professionals are rarely taught anything fundamentally new about marketing – they actually know it all and practice it’s principles instinctively.
Of course other paradigms come along to replace prevailing ones but only when a completely new way of seeing things is put forward. Views such as Service Dominant Logic might be classed as one and the ideas published in the area of Critical Marketing. Everything else I read about concerning everyday marketing management and problem solving sits within the conventional marketing paradigm.
So whilst I read a lot about new techniques such as the application of social media in marketing activities, and trends such as the importance of story telling for brands, because I’ve been around a while I don’t actually see anything truly new in terms of everyday marketing management thinking. Let’s check a few of the marketing stalwarts out.
Marketing’s old ideas
Customers buy benefits not features
There is a difference between need and want
Brands are a promise of value
Customer segmentation and targeting is an effective use of scarce resources
Make the marketing mix relevant to the target customer
Firms need meaningful differentiation to compete
Customer centricity should be your focus
Keep an eye on your competitors
Plan what you by following the structure; where are we? where do we want to be? set out how to get there, and measure your effectiveness
Don’t give profit away
Have a dialogue with your customers
Changing the logo is not changing the brand
Some customer aren’t worth doing business with
Have I got this wrong? Are there any new principles you would teach new dogs?
I bet one of the first things you would say is ‘well it depends’ and by saying that you are acknowledging something crucial and fundamental about this thing we call ‘customer value’. Saying ‘it depends’ means we recognise that value is unique to the person who decides the value and the circumstances in which they are making the decision.
So in the case of the rusty old Volkswagen Beetle like this one the scrapyard dealer might be thinking of the monetary value of the scrap metal, the VW owner who needs a scarce part might be thinking how their break down problem has been solved now that s/he has found a rare engine part, the car renovator might be thinking about how perfect the car shell is for their next custom car project, the grandson tracing his family history might over the moon that he has finally found his grandfather’s car that he drove around Europe in the early sixties and met the woman who was to become his wife. What we ‘get’ for our money is so much more than just the thing itself.
2.Put value at the heart of every marketing conversation you have
As a cornerstone of business activity in general and marketing management in particular understanding value is the primary commercial concern. Marketing shorthand for value is typically ‘the benefit’ or ‘the solution’. It is so fundamental that almost everybody in a firm from the tea boy to the CEO has a view about what the customer values. If you don’t deeply understand value as a concept and what value in particular means to your customers your chances of success are greatly impaired.
3.Make value the touchstone of every marketing decision and action
Understanding value seems so obvious it hardly warrants further comment and so marketers often give more time and attention to marketing implementation rather than making sure actions are aligned to fundamental value drivers. Marketers can easily end up focussing on the interesting rather than the important. To paraphrase Peter Senge when they do this marketers run the risk of chasing the latest fads thinking they are being proactive when all they are doing is reacting and overlooking fundamentals.
4. Cover all the value bases
Over the years it’s become clear that the idea of value is a multi-dimensional constantly moving target. It is unique to each and every customer, it is relative to the competition and it is a weird mix of the monetary, functional and meaningful. For that reason it’s probably one of the most challenging topics in marketing.
Key thought leaders who have produced value definitions and frameworks include:
Park, Jawarski, and MacInnis (1986) from function to experience
Valerie Zeithaml (1988) from give to get
Robert Woodruff (1997) from product attributes to satisfaction
Sheth Newman and Gross (1991) from function to social
Morris Holbrook (1998) from efficiency to spirituality
Ulaga (2003) from attentiveness to expertise
Khalifa(2004) from trade off to means ends
Brock and Colgate (2007) from money to symbols
Value is a complex combination of different things.
Some are more important in b2c and others more relevant to b2b. The important thing to note is that it is a blend of these things, unique to each customer and each market situation. This means value is never fixed and constant.
Key value elements include:
Economic value – what is the asking price or utility of something
Perceived value – what you think something is worth
Relationship value – how much a long term and close trading worth
Experiential value – how interacting with your brand feels
Symbolic value – what something means
Knowledgable value – how helpful something is in improving life and business in general
These different facets of value engage the purchaser in both rational and emotional decision making simultaneously. The big debate in b2b is just how much purchases depend on objective financial factors and how much on subjective factors such as relational warmth. Is clarifying what value actually is on your marketing agenda.
5. Don’t confuse Values with Value
There is a lot of contemporary talk in professional marketing circles about moving from attribute to values based marketing. The idea here is that if you tap into the psyche of customer by understanding their deeply held beliefs and life goals this is more relevant persuasive and influential than addressing economic, functional and perceived value. We claim that choosing either attributes or values presents a false dichotomy. In practice it’s not really the case of choosing either attribute or values based marketing. Also in a b2b context there might be a very clear need for specific technical expertise, or financial attributes that are deemed of immediate value rather than a more values based value view of purchase drivers such as loyalty or trust.
Value and values are of course closely related. The distinction needs to be made clear nevertheless. Frequently people hear the word value being mentioned and proceed to talk about their company values. Value is what is the customer gets (which might include resonating with personal values). Values on the other hand are the profound beliefs that people hold which guide how they act in the world. Value and values are not the same thing. Is distinguishing value and values on your marketing agenda?
6. Ensure everyone in the team has the same take on value
One of the most frequent problems we hear about when working with organisations is that there is a problem with communications. People don’t keep their colleagues informed, there is a lack of feedback or information is simply not shared.
These things obviously create communication challenges however there is something much more profound about how we communicate that is often overlooked. That thing is declaring your assumptions or explaining where you are coming from. We take our assumptions for granted and so we often don’t bother talking about them or revealing them to others. People tend to rush into selling and enthusing about their ideas and proposals without establishing a baseline of understanding. They assume they are talking about the same thing when often they are not. One person may be talking about economic value and the other about symbolic value; another may be referring to value and the other to values. Always be clear about ‘what’ you are talking about. Is understanding different internal value perspectives on your marketing agenda?
7. Avoid customer worship
The establishment of marketing philosophy and principles in the management psyche is probably one of the most successful selling jobs ever.
Marketing speak is everywhere, people who don’t even work in marketing talk of brands, positions, segments, targets, benefits, competition and differentiation. Where there is talk of customers instead of patients, where there is talk of customers rather than students, where there is talk of customers not citizens that’s marketing talking. Philip Kotler crystalised the idea that marketing touches every aspect of life from business, hospitals, schools and churches in his 1972 article The Generic Concept of Marketing. We can call this the marketisation of everything and the assumption that this is obviously a good thing, but is it? Customer centricity is a key marketing idea.
Customer centricity is epitomised by the idea that the ‘the customer is king’. If you are not careful this can lead to customer worship and the potential of going out of business. I worked many years in the gambling industry. When we researched players they always said they wanted ‘the jackpot’ every time they played a slot machine. Did we give the customer what they wanted? Of course not! Value has to be created for all parties for the deal to work. The players were given a win chance and a run for their money and the slot operator got a profit per game played. Esteemed marketing expert Evert Gummesson recently called the pursuit of customer centricity a wild goose chase. Getting the balance right between the value the customer wants and the value the supplier needs is called value appropriation.
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8. Deeply understand value in use and value co-creation.
How many people in your firm actually know what co-creation of value means?
Do they really understand the principles of The Service Dominant Logic of Marketing proposed by Robert Vargo and Stephen Lusch where the notion of co-creation was first presented?Many marketers use the term co-creation to mean working with the customer to develop new products and services. For sure an element of joint or co-creation takes place. Often this is called co-production too.
When talking co-creation of value Vargo and Lusch mean something else entirely. They challenge the very basis modern marketing management by claiming that the whole profession is built on focussing on just one, very particular, idea that philosopher and economist Adam Smith had about value. This idea was the exchange of value which he set out in his book Wealth of Nations. In this treatise Smith made the case that for nations to grow their wealth in the global economy they needed to add value by the production of products which is then exchanged for money by exporting to international markets. The idea of value exchange has been the basis of marketing ever since.
Adam Smith was making a specific economic case in relation to exporting; as a philosopher Smith also understood that value was only really co-created at the point of consumption. So we have value in use rather than value in exchange. Their point is subtle and important.
The claim that value can only ever be created in the moment of use means that value creation is reciprocal – in other words co-created for the supplier and the customer at the same time not passed from one to the other. Value therefore cannot be ‘added into’ anything and embedded by the supplier prior to purchase. Thinking about value in use ensures that firms don’t run away with a technological or product perspective and always focus on the value the customer will derive when the solution that is offered is used. Co-creation is not really about co-development.
9. Remember you are always aiming at moving target
Can we ever really know what the customer wants, needs or values at any point in time? Sure we can have broad idea of the sorts of problems and aspirations customers have and sure we can propose generic solutions to satisfy what the customer might be seeking. But can we actually know in advance what is driving a particular customer purchase? The context of every purchase is unique every time. Only the customer can decide what is relevant to their situation and so this means that businesses can only propose value. What this means is that being continuously tuned into what is relevant to your customers is vital. This is what makes face to face interactions in b2b marketing so important. Without relevance your marketing efforts run this risk of missing the target. Is solution and value proposition development for value in context on your marketing agenda?
10. Create, deliver and communicate differentiated customer value with Value-ology