Where the Value Lies
Business professionals who cut costs to stay competitive will eventually lose ground to those who create premium customer experiences. Cutting costs may keep customers from going to the competition in the short term, but it devalues a product or service and makes it more difficult to compete in the long term.
Published reports have shown that the affluent would rather pay a premium for deluxe experiences than for high-priced luxury items (cars, clothes, jewelry, etc.). A recent conversation I had with an executive at Marriott International revealed the affluent are not the only ones craving premium experiences. She's seeing more requests from customers with motor homes who simply want to spend the day at a Marriott hotel relaxing by the pool, dining, and using other hotel facilities.
Marriott is not alone, as other companies are adding value to their traditional customer experiences. Senior Editor Marshall Lager provides an example of this in his story "Old-School Entertainment Is Still in Session." It's no mystery that sports arenas and movie houses have been losing ground to HDTV sports events and home theaters. But Lager states the NFL's Oakland Raiders are fighting back with customer rewards programs and offering additional experiences such as access to closed practice sessions--something digital entertainment can't touch.
The same notion of adding value holds true for e-commerce. In our cover story called "E-commerce Best Practices Make Perfect," Lager spoke to an analyst who says one of the biggest mistakes in customer retention and e-commerce is to compete on price. "With e-commerce, you compete on convenience, selection, then
price," the analyst suggests. Essentially, when these three elements are done well, it will enhance the customer experience and prevent customers from going to a competitor's Web site. Another way to enhance the e-commerce experience is to offer live help when a customer is stuck. Lager includes an example of how some savvy companies, such as Macy's, Amazon, and Gerber, are offering live help with VoIP solutions.
The convergence of voice and data over an IP network has laid the foundation for Session Initiation Protocol (SIP), a technology that is nearly a decade in the making. SIP, as Associate Editor Coreen Bailor states in her feature "AntiSIPation" helps to establish sessions between two or more communication channels such as multimedia conferencing apps, IP phones, or instant messaging tools. Early adopters are benefiting from SIP's presence awareness capabilities, which determine whether someone is available to receive a phone call or respond to a Web chat or email. While SIP can be used to track down the most appropriate company representative for a customer, its ability to quickly connect people over multiple communication channels can also be used to enhance the e-commerce experience.
If there's anything readers should take away from this issue, it's that there are plenty of examples of how companies can compete without cutting costs. Ultimately, if the value is there, customers will pay for it.