con-text (kon’-tekst) - the interrelated conditions or situation in which something exists; the circumstance that defines meaning or value.

   In the views of many struggling business people, when their company’s profits and growth are below expectations, the customer is the culprit. A Conference Board survey of CEOs ranks customer retention as their number one challenge. Customers are viewed as more demanding and they don’t stick around long enough to become profitable. Even for are repeat customers, each new transaction is a zero sum game with the business sacrificing profit for the sale. Untenable, unprofitable and unsustainable! Ready for a surprise? Customers don’t like the situation anymore than vendors!
 
   What do customers want? They want Value - defined in their terms. Value is not a good product at a good price anymore. The challenge is to understand the new concept of value. Most companies do not. The good news is that a number of highly successful companies have cracked the new value code. The result for them is rapid growth, high profits and a core customer base that indicates their business model is sustainable.
 
   These companies are not attempting to find, acquire and to sell customers. They are focused on attracting and nurturing customer into long-term, win-win relationships. They see this as a journey not an event. As this journey progresses the customers increasingly act like ideal customers as described in figure 1.1.

   There is a basic premise behind the new value code that drives many successful companies. These businesses recognize that this is a new era where customers face abundance, overwhelming choice in products and vendors, commoditization, the uncertainty of rapid change, and the stress of a fast paced life. They realize that under these conditions it’s not their widget that is of value. The value is in the experience customers have in buying, using and savoring it. Product utility and quality are still important but these days they take are taken for granted. However, what separates the desirable offerings in the mind of the customer is the emotional consequence of the involvement. Products are a means to an end - experiences are an end in themselves.

   This is an excerpt from Chapter One of my forthcoming book Addicted Customers: How to Get Them Hooked on Your Company. For more information on the book go to www.AddictedCustomers.com.

Posted by John Todor on Wednesday, July 12th, 2006 at 1:55 pm.