How we change what others think, feel, believe and do
The Customer Sacrifice gap
We are all customers every day for many products and services, from early-morning train journeys to luncheon sandwiches and evening drinks. Much of the time we do not think too far about how happy we are about with the product or how completely it fulfils our needs, but now and again something new comes along that we find a much better alternative for some reason and, without too much worry, we may switch from a product or supplier from whom we have had satisfactory service for a long time.
Why does this happen? The answer is because needs are never perfectly met, which in quality terms means that products are never fully fit for purpose. This also means there is always room for competition and that quality professionals are at the forefront in helping their companies stay ahead of the curve.
‘Customer sacrifice’ is the gap between what customers need and what they accept.
Perfect quality thus means zero sacrifice. Pictorially, this concept can be shown as follows:
Of course in practice it is much more complex than this, as there are many different dimensions along which customers choose. Sacrifice can be found in product attributes, service levels and more. The principle, however, still remains as the choice will be based on some weighted aggregate of these gaps. For conversation and persuasion, the diagram above can still be very helpful in explaining the concept.
The choice process
A key reason why customers choose products that do not meet their needs is because no products meet their needs. What they do is look for products that best meet their needs. In other words, they estimate the sacrifice gaps and select the smallest gap. They seldom say ‘this is perfect’ – it is more a matter of ‘this is the best I can find’. In the diagram below, Product B looks best because it has the lowest sacrifice.
This choice process is often relatively subconscious. Customers seldom say ‘I am sacrificing X’ as they assume that their needs cannot be met any better than the products available. They often, in fact, do not know their own needs and only guess them from the product or service available. This represents a golden opportunity for companies who want to deliver greater quality products.
An example of this is an American company which, several years ago, noticed that customers were buy dried pasta in large quantities. In fact many of them thought that this is what pasta was like and so did not know the sacrifice between dried and fresh pasta. After they had solved the problems of producing and packaging fresh pasta on an industrial scale, the company went to market and were wildly successful. Fresh pasta in supermarkets is now a multi-billion dollar market.
Question for you and your company are thus:
· What sacrifices, knowing and unknowing, do your customers make when they accept your product?
· What assumptions do they make about what is possible or not?
· What assumptions are you making about what is possible and not?
· What sacrifice does the market leader’s products and services require?
· How can you reduce customer sacrifice?
If you can see and cut customer sacrifice, you can leapfrog your competitors or even enter entirely new markets, upsetting the applecart and taking significant profits. All you need is research and imagination.
Next time: The Ansoff Matrix
This article first appeared in Quality World, the journal of the Chartered Quality Institute
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