Marketing, and specifically advertising has for a long time worked with the concept of AIDAS.
Attention – Being aware of the product or service
Interest – Seeing how it solves a particular problem or need
Desire – Wanting to solve that problem or need
Action – Obtaining it
Satisfaction – Perceiving that the purchase had value
Customer value is directly linked to perceived satisfaction. It is important to realize that not every purchase is made thinking that the product is the best one in the marketplace. Satisfaction is obtained when the customer feels that the purchase met or exceeded their expectations.
This is all connected to trust. The customer makes a purchase based on a cost/benefit calculation, and when they evaluate the benefits, they rely on the communication of the company producing or selling the product. This trust is placed in that the advertising, sales pitches, and product descriptions are true and honest.
Once we realize that trust is imperative to the perception of value, the need for an ethical approach becomes obvious. You cannot sell value without trust, and you cannot gain real trust without being ethical in the presentation of your product or service.
Perception is Reality
In order for the customer to perceive value, it is important to know that their expectations are not exceeding the capabilities of the product or service. This can actually mean informing a customer that their expectations are too high. Although this might sound like a death blow to an automatic sale, this is nothing compared to the long term effects of having displeased customers. It is better to educate the customer who is in the process of making a decision and possibly lose a sale than to have them experience a lack of satisfaction and the resulting bad relationship because the purchase did not measure up to the expectations.
The White Knight Intervention
The reason for not making a sale that is unable to deliver satisfaction to the customer is called the white knight syndrome. Once a customer feels that they were saved from making a mistake by the sales staff they have gained a level of trust that is hard to achieve in any other way. Losing the initial sale by informing the customer about the true performance of the product or service will build a level of trust that has a much greater potential of bringing future return business and referrals.
To build the trust, there are five stages of communication that takes place:
1. Initial communication - Attention and Interest phase
This stage of communication is seller initiated. It includes advertising, sales copy, product descriptions, blurbs and all the other things that address the first two letters of AIDAS.This communication is normally one way. Printed, recorded or otherwise distributed to a customer that at this point isn’t communicating back. It can also be a cold call, or an unplanned sales visit.
2. Customer initiated contact – The desire phase
This is when the customer somehow approaches the seller. At this point, they are either looking for more information, or are preparing to make a purchase. Achieving consensus now is imperative; this is when the customer asks questions as to quality, performance and price. This is the time when the seller can make sure that the customer is in fact purchasing a product that is equal to their expectations, and the time for a white knight intervention steering the customer away from a purchase that will result in a bad experience. This communication can be either one or two way. If the customer does his or her research outside the control of the seller, it is again imperative that the information available matches the true performance of the product or service. If the customer has contacted the seller, the information should be just as honest, but the benefit here is that the seller can ask questions back, ensuring that consensus exists.
During this phase, ensure that disclosure exists for the customer to get a fair perception of the real purchase.
3. Action – The Sale
During the actual transaction, the real last chance of ensuring customer value exists. This is not the time to disclose additional fees, extras that are needed etc. If that occurs when the customer has decided to make a purchase - the trust is lost immediately. This signals that the seller understands that the deal itself isn’t so good. So they chose not to disclose the true cost of the item. Many companies employ this approach in order to make a sale, but do so knowing that return business is not likely.
4. Satisfaction – Customer Feedback
A seller interested in long term relationships with its customers should pay specific attention to the follow up. Give the customer a chance to communicate their feelings after the purchase. And should their perceived value not be up to standards, be prepared to make corrections. Listening to a customer that has already spent their money in order to ensure that they experienced the value and satisfaction is the one of the best ways to build trust. When a customer has a legitimate problem, be swift and reply with force to correct this problem and your trust will be raised even higher.
5. Follow up
To nurture a customer relationship, maintaining contact with the customer is imperative. The ways to build return business through value added offers differs from industry to industry. If you are selling cars, oil changes, tire wear and other maintenance can be predicted. Contacting the customers at the right time with deals that are of additional great value to them will continue to build trust. If you are a roofer, keeping in touch before seasonal changes with maintenance offers will make sense.
In short, satisfaction relies on the perception of value obtained and customer value is the one main reason that customers return. Return business should always be on the forefront of every deal since it is much less expensive in time and effort to obtain.
Alienating a customer through lack of value can for many businesses be the death blow. Their customer base remains essentially the same, but the available customers keep declining because the unsatisfied customer will create negative publicity for the seller. The word of mouth damage that can be caused by bad relationships is not to be underestimated.
The importance of value will only increase as time goes on because of the internet and the increased customer capacity to write reviews and warnings to other potential customers.