In the extremely competitive business environment today meeting customers’ expectations is no longer enough. The businesses have to go the extra mile; they need to excel, exceed people’s expectations and delight their customers, employees and community.
Let’s have a look at the evolution of business orientation:
Quite a while ago (at the beginning of 20th century) management was mostly focused on the production problems. The key question was how to engineer and make product available. The most successful companies (e.g. Ford) were those who were efficient enough and able to bring products to market. Say’s Law encapsulated this viewpoint, stating: “Supply creates its own demand”. To put it another way, “if somebody makes a product, somebody else will want to buy it”.
Soon enough many organizations perfected their manufacturing processes. They could now produce as much as they wanted. Businesses had to concentrate on ways of selling their products. This led to the development of a sales-oriented philosophy. Numerous sales techniques were developed. In addition advertising, sales promotion and packaging started to play a huge role. The slogan “Push! Push! Sell! Sell!” best describes this orientation.
Soon enough many organizations perfected their sales processes. The companies realized that putting more and more pressure on sales cannot be the most important key to their success. Instead, they started researching what customers need and want and then figuring out how to provide those products. This approach is called marketing or customer orientation. It is best described by the shortest definition of marketing ever: “Discover the need and satisfy it!”
Guess what? Soon enough many organizations perfected their marketing processes! Everyone was now doing marketing research and everyone was trying to “meet customers wants and needs”. The smartest, however, (e.g. Apple, Ikea), started innovating and reinventing their products, business models, customer experience… They started creating new needs and new product categories and finding ways to go BEYOND customers expectations. The new motto is: surprise and delight them! This is the age of WOW! Here is the new law (Ivan’s Law if you will), or 10-300 rule summarizing this approach “Wow your customers by giving 10% more than expected and you will triple your chance to keep your business growing”
Still not sure? Well, consider the following facts about the importance of WOW:
o COMPLETELY satisfied customers are six times more likely to repurchase products than merely satisfied customers (Jones and Sasser, Why Satisfied Customers Defect, Harvard Business Review, 1991)
o Shoppers who were emotionally connected to a supermarket spent 46% more over a one-month period than shoppers who were satisfied but lacked an emotional bond with the store (Gallup survey)
o Ford executives say that each additional percentage point in increasing
customer retention is worth $100 million in profits
o The company with the highest total return to investors over the last five years on Fortune 500 list is Apple, the company well-known for creating huge wow factor with their innovations such as iPod, iTunes, iPhone, iPad…