Sourcing & Services Matter: Why Price Alone Won’t get your Customers to Stay

Price wars are a st andard challenge of marketers, whether working on the retail or manufacturing side. They have become more frequent in the last couple of years following the recession. Consumers are today even more price sensitive and are searching for great value and even greater deals. However as most retailers are now claiming lower prices, it becomes less of a differentiator. I therefore read with interest that Walmart is moving from its emphasis on low prices to one on sourcing.

Walmart gives serviceIn 2007 Walmart replaced its “Always Low Prices, Always” slogan by “Save Money Live Better”, so this new push with the message “ Made in the US” is worth noting. This latest announcement is made in conjunction with its promise of an additional $10 million in grants to non-profits focused on “on-shoring” manufacturing efforts.

 

Target gives serviceTarget announced last October its plans to introduce the “ Target Sustainable Product St andard” which was developed to “establish a common language, definition, and process for qualifying what makes a product more sustainable.” Target will ask vendors to complete an assessment that is designed to determine a sustainability score for their products. Products will be assigned a score of between zero and 100 “based on the sustainability of ingredients, ingredient transparency, and overall environmental impact”.

 

Both these initiatives show a move to a more caring retail environment. A study run by the Boston Consulting Group at the end of last year, found that more than half of companies with sales greater than $1 billion are actively planning or considering to bring production back from China to the U.S. This rise from a mere 37% just six months earlier shows a significant shift in American sensitivity.

 

Jumping across the “pond” to the UK, something similar is happening in terms of shifting attention from price to value, or should I say values?

 

Tesco gives serviceTesco recently introduced their “ Price Promise”, a pledge to match the price of a basket of both own-label and br anded products at Sainsbury’s, Asda and Morrisons, or to offer customers a voucher at the till for the difference. Sainsbury’s has appealed to the Advertising St andards Authority, arguing that this claim was misleading customers. However, their wrath was, in part at least, sparked by the fact that this new Tesco pledge came in response to their own highly successful “ Br and Match” scheme, although the latter only compares br anded products.

 

Sainsbury's gives serviceSainsbury’s has now retaliated with the launch of a new campaign with the title “ Same price, Different values”, a possible dig at the fact that although Tesco won the ASA appeal, Sainsbury’s might appeal as they claim that their own-label products cannot be compared since many are locally produced. To support this position, the National Farmers’ Union has now taken a stance, backing Sainsbury’s. In light of last year’s  horse-meat sc andal, the values of retailers and the sourcing of food has become even more crucial, and Sainsbury’s sees this latest row as an opportunity to emphasise the difference between itself and Tesco. Continue Reading

10 Ways to tell if you’re Customer Centric: And what to do about it if you’re not

Summer is a great time to reflect on the progress we have made to date on our plans, be they personal or professional. Having finally completed the “nth” revision of my latest book –the formatting not the content! – it was the perfect occasion for me to review what I wanted to achieve in the coming six months.

This got me thinking about how organisations too need to take a step back and review how their plans are going and what changes need to be made to ensure their completion over the remaining six months of the year. So here are my ten ways to tell if you are well on your way to becoming truly customer centric – and what actions you can still take to go further along your journey.

#1. Identify the category in which you are competing

This may sound strange to you, but many br ands are not competing in the category in which they first thought they were. Think soup which is now a meal replacement, or laptops which are now entertainment platforms.

Action: Review how your product or service fits into the customers’ daily life and how they compare and decide between options. This will help you identify your real competitors and the actual category in which you are competing.

#2. Underst and your primary target

Boston MatrixKnowing precisely who the customer is for each of your br ands is the first essential step to satisfying them. Use the BCG Matrix to help select the best group. Do you already work with this matrix, or do you have a better system? Please share your own best practice below, so I can learn.

Action: Review the target audience for each of your br ands and ensure you have information on their +4Ws” – Who, What, Where and Why: demographics, purchase, usage, media use, places of purchase, consumption, connections to communications, their values, usage motivations and emotions when doing so.

#3. Watch and listen to your customers

Personal experience of your customers is essential to putting them at the heart of your business.

Action: Ensure everyone has regular – ideally monthly – contact with the customer, whether by listening in at the call centre, watching market research interviews & discussions, or observing customers as they shops and use your product / service.

#4. Know what current trends could mean for your business

Many organisations follow trends, but they don’t provide any competitive advantage unless they are turned into future scenarios.

Action: Identify the most relevant trends for your br and and then project them into the future to develop two axes of uncertainty and four plausible future worlds. These will help prepare the business for future opportunities and challenges.

#5. Reinvent your innovation

Example of innovation leversMost organisations innovate based upon their current knowledge or technical skills. This keeps them boxed into a narrow b and of categories.

Action: Take your NPD thinking outside its box, by making use of all relevant innovation levers, including, but not limited to, packaging, channels, sourcing, communications, br anding, services. Continue Reading

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