Customer Expectation – No2 in the Shareholder Value Series

Over the weekend we wrote about shareholder value and why customers frankly couldn’t care a monkey’s about it. This entry focuses on the first of 3 ways that you might consider as ways of delivering value to your customers, while still ensuring you profit.

Expectation Management

Have you ever bought something from a vendor having been promised a great deal, only to find you get considerably less than you were promised? You know the kind of thing I mean, something like switching mobile telecoms provider having been promised better coverage, cheaper bills and generally better service. Then you find the coverage is woeful, the calls are more expensive and so on. So right from early on in the relationship you lose faith in your new supplier - chances of you staying with the telecoms company?

This is a much more common experience for customers than you would imagine, but it is also one that you can easily avoid being tarred with. We call it Expectation Management and it’s a very simple exercise.

If you really understand what it is that your market perceives it needs, then you have a template for expectation. You can measure your products and services against that template and decide where you want to sit:

• Does just one offering work for the market?
• Does it work better to offer basic, middle and top level versions to suit different sections of the market?

Whichever way you decide to go the real trick, the thing that enables you to set expectation properly is ‘boxing the service’. This means writing a specification of service, publishing it and most of all sticking to it with your customers. 

If you are open and clear about this from the very start of your relationship with your customers, the simple truth is that you are managing their expectations and making sure they know what you will do, what you won’t and how much it costs. This gives the market the ability to place a value on your offerings and when they decide to purchase, they are doing so with a clear understanding of what they get for their money.

Sounds simple and in truth it is. It just needs some solid market knowledge and a bit of work to define your offering. The good news is that this is also one of the best ways for any company to manage its costs, while delivering what its customers want and looking after shareholder value.

Hope this helps and there will be another tomorrow. As always your comments and views are always welcome so please share them.