Burned by the Budget
This has been a tough season for many. As business belts and budgets tightened, the focus to become leaner has led to some tough choices. Many of the activities we engaged in with customers had to change, even go by the wayside. Maybe it was fewer visits, or less personalized care, as we moved their requests into more “efficient” centers, thereby reducing transactions costs. Some of the requests we did for little or no cost, now are fee based. What about when the economy improves?
I know that irritating feeling when responses to my requests take longer or get mishandled by providers I once bragged about. I will likely change providers, once we emerge from the storm. I will reward those that did not lose sight or memory of who I am as a customer. Possibly you may as well?
Often, when we calculate costs of doing business, we do so with impersonal and questionable benchmarks, leaving the effective in favor of the budget efficient. They are impersonal with respect to our markets and reputation, and improper because of the use of averages. The cost and budget numbers improve and the transactional lens shows progress. Did our arithmetic extend down the value stream to our customers’ experience and costs? The math is different for them than for us.
For us, the very basic view is: Our Price = Our Cost + Margin.
For our customers, the basic view is: Real Price Paid = Our Price + Additional Customer Costs (Inconvenience Costs and Transacting Costs.)
For them, we become more expensive when we make it harder for our customer to buy from us. What may look as wonderfully efficient with our accounting lenses looks harshly more expensive through our customers’ lenses. The opposite is true, when we increase convenience and reduce the cost of doing business with us, their Total Price goes down.
- Do we think they’ll understand and forgive our inconveniences?
- Do we think that in better times, they’ll forget and we can go back to the way it was before?
- Do our decisions enable or disable our customers’ success?
- Are our competitors watching? Are they waiting?
- Will we remain the Provider of Choice?
