A New Value Equation
A New Value Equation, March 2023
“If you’re disappointed with the results you’re getting, it’s not because your expectations are too high. It’s because those expectations are not high enough to pull you forward. Don't lower your expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself, and then do what is necessary to make it a reality.” -- Ralph Marlston
For many, conventional thinking in business (and in some cases in life) says to lower expectations so that you can manage those expectations better – and beat those lower expectations by not so much over-performing but instead by just doing enough. But conventional thinking is what usually gets a business in trouble down the road and doing just enough is never a winning attitude in business or in life.
The problem with lowering expectations is that it results in sustained poor performance, it will eventually demotivate employees, causes value to be defined on commoditization, and the customer will begin to associate those lower expectations - yours and theirs - with weak experiences that eventually leads to churn.
In a service industry, there are two important components that underpin a winning business proposition: products and services. In our Office Coffee Service #ocs work for the National Automatic Merchandising Association , we looked at how consumers and decision-makers view their expectations and levels of satisfaction on products and services. While overall satisfaction is extremely high, expectations are too low.
Interestingly, there are no substantial differences between consumers and decision-makers on measures of both product and service expectations and satisfaction.
Product
Expectations Satisfaction
Consumers 21% 92%
Decision Makers 39% 97%
Service
Expectations Satisfaction
Consumers 19% 91%
Decision Makers 40% 97%
Why would expectations be so low while satisfaction is so high?
Across the OCS industry, the data shows that expectations are this low because owner operators and the industry at large need to better define their offering in a way that aligns with what is causing such high satisfaction. Further, with low expectations there is susceptibility to always selling on price and not on a stronger value proposition. With higher expectations, the upfront sale into an account actually becomes easier and you are not always fighting on price.
How can expectations be raised and what does it mean to do so? Communicate a promise as to what your product and your service offering will deliver. Do this in your marketing and communications. Do this in training of employees. Imbed this thinking into the organization and with your suppliers.
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Of course, this all begs the question: If we do raise expectations, can we know that we’ll exceed them? Based on the data shown in the table, the answer is a resounding yes because the industry and owner operators are already scoring so high on satisfaction.
The following represent the most significant areas where you can both raise expectations and have a significant, positive impact on account retention and acquisition. As a list of actions, these are specific areas to train your employees, have dialogue with accounts, and measure progress:
Is value selling your product at the lowest price? No.
Is value treating your customer as they would not want to be treated? No.
Is value skimping on quality? No.
Is value lowering expectations so you can beat them? No.
We define value as the totality of the experience one has with your product and service versus their expectations. Value is consistently exceeding expectations – high expectations – in the delivery of your offering. Go with #valuecreation and #valueselling.
When that is accomplished, the types of outcomes you seek are realized – customer loyalty, employee satisfaction, premium pricing, minimal churn, and an emotional bond with your customer that withstands stressful times in the future.
So if you were looking to improve or to go even higher, don’t turn to the easy route and simply lower the expectations you would have of yourself or of others. Mediocrity is a losing formula.
Lift yourself and others to expect – to ask for – greater.
Mike Dabadie is Co-CEO and Co-Founder of Heart+Mind Strategies, LLC, an insights and strategy consultancy that continues to pioneer the use of human values in marketing communications.