Sectors

[column] F * ck the price, long live the service

This book is published exclusively by all newspapers of De Persgroep (DPG Media, ed.) Because these newspapers want to contribute to the solutions for the difficult circumstances of many entrepreneurs.

The price war following the pandemic leads to a lot of unwanted effects. I mention a few here:

* We are massively exporting environmental problems to the developing world because of this price war. Think of the clothing industry that uses a lot of water and dumps the toxic substances into the soil.
* We export bad working conditions to countries far from us. Then we don’t have to see what we are doing by wanting to buy our clothes for next to nothing.
* We want to pay less and less for our food and that has major consequences for animal welfare, but also for the environment. Think of nitrogen problems and pesticides in the latter. The German discount chain Penny with more than 3,800 stores therefore decided in September 2020 to indicate the actual price on 25 articles that would have to be paid to solve all environmental problems. A great initiative. The chairman even felt that they themselves were part of the problem. An interesting development that gives hope.
* Due to insanely low airfares, we travel en masse all over the world, but we also increasingly transport unwanted viruses. Corona is unfortunately a very sad example of this.
* Because everything has to be cheaper, more and more plastic is used and products are becoming less and less sustainable. The plastic soup in the oceans is now beginning to disintegrate, causing plastic particles to come into the air that we will inhale en masse. This will lead to new diseases and health problems.

We are seducing consumers en masse by stunting with low prices. Almost 80% of communication today is about price and only 20% about the story of the product or company. Consumers therefore increasingly decide on the basis of price, because what else can you do? 24% of the range is now permanently on sale in supermarkets, 45% in drugstores and over 33% in clothing.

This is an endless and totally wrong path. Of course you can pass on price signals from time to time, but we are now completely overwhelmed. This goes so far that 1000 factories in the UK are about to collapse. Not a pleasant thought if you have just decided to leave the EU! In the Netherlands, too, the necessary companies are about to collapse. It is therefore a real necessity to start thinking differently about the P for price. I notice that many managers have forgotten that marketing guru Philip Kotler is talking about 5 P’s and not just 1 P! In short, a complete lack of imagination.

Service is a perfect way to escape this price war
Service is a concept that the Dutch struggle with terribly. It is often seen as being submissive. However, it has nothing to do with that at all. Service means that you help a customer optimally and that they are satisfied with you. Service will only work if you are willing to ‘serve’ first and then ‘earn’. Many boards unfortunately turn this around. Then it simply won’t work. Service thinking has to start at the top of the company, which then has to set up a strategy. Service is not an ad hoc issue, but a long-term process. You have to actually organize and, above all, facilitate service. Companies are far too inclined to say that they are service-oriented, but in practice, this turns out to be very wrong. It therefore often remains a hollow slogan. You often see that in their surveys. When you come into contact with a company, you often receive an email immediately afterwards with the question of how you experienced the service. How bizarre is that? Service should be normal, right?

The strange thing is that the companies that most often ask for this feedback are precisely the companies where service threatens to become an ever-increasing problem. Think of banks and insurers. You can take these surveys until you weigh an ounce, but very little seems to change. This frustrates the consumer enormously. We all know the often very long waiting times when trying to get in touch. Often you will also be heard in a disconcerting manner. We experienced this ourselves during our winter sports in January 2020 when our daughter had a skiing accident. The insurer must then immediately contact Eurocross Emergency Center. It took no less than 20 minutes before the phone was answered there (you only had one job!) while the emergency services waited impatiently. Subsequently, an emergency operation was refused because it would be far too expensive in Austria. It was also mentioned that Austrian doctors are money wolves! When we then had the operation carried out at our own expense, it was also very difficult about the repatriation. At that moment you feel completely abandoned as a customer. We have never heard any apologies. Just an example from an endless row of problems that consumers have. In addition, ‘greed‘often a leading role, causing consumers to pay far too much for a product or service. Organizations like ConsumentenClaim have their hands full filing mass claims to help disadvantaged consumers obtain their financial rights. Programs like Cash desk and Radar know how to fill their programs with injustice every week.

Service is much broader than we think
If you have the service well organized, you will stand out. Just think of Coolblue, which is able to present a service experience in a brilliant way. That has everything to do with an inspiring leader in this case Pieter Zwart. Inspiring leaders clearly make the difference to actually deliver excellent service. It strikes me that companies have great difficulty in figuring out how they can add service. That is why I developed the 5 G model.

With the help of this model you can deploy service in many areas. After all, service is a broader concept than we often think. Convenience is, for example, Apple Pay, or home delivery of orders. Profit can be expressed beautifully in the savings that the use of your product or service will generate. Just think of solar panels or specific sales training. A photography course can also be a wonderful service tool. I will discuss this below in a short case study about ‘Foto Village in Losser’.

Healthy services
Healthy is an area where a lot is possible. Supplying organic products or ensuring that the environment is less burdened are matters that interest many consumers but also B2B companies. A company such as Yoghurt Barn, for example, is very responsive. Enjoyment is a service factor that consumers are desperate about. Rituals understands that like no other. Finally, luck. Why are so few companies realizing that what they are selling is actually just ‘happiness’? Just think about it for a moment Netflix. What they sell is the evening on the couch with your loved one a good bottle of wine a tasty snack where you can choose beautiful series and films where you can talk a lot about. Netflix doesn’t actually sell movies, but luck. Price is therefore not relevant at all. They hardly talk about that either. Apple has understood that too. The beautiful design of their products and the new possibilities ensure happiness that has no price!

Photo Village in Losser
It is nice to see that there are now shops that literally take over the idea of ​​service and act on it with passion. For example, a photo shop opened very recently under the name Foto Village in Losser. Two enthusiastic entrepreneurs (Alex Wächtler and Robin ten Cate) decided that things can be done differently and must be done differently. While the economy is under enormous pressure due to corona, they did not open a shop in an industrial estate or in a box of blocks, no, in the middle of the village Losser in a farm from 1682. What makes this shop so special? Answer: the fact that they make very clear choices that many retailers can learn from.

This store is not going for price, but service
* Every sale includes an intake interview to determine what your wishes are. This takes place in a separate room in the farm.
* A plate with Twentse Krentenwegge is set up for each customer along with a cup of delicious coffee so that you experience the optimal hospitality.
* This shop does not have an insane amount of cameras, but has made an excellent pre-selection. This way you avoid choice stress. The store image is therefore very quiet.
* The intake interview leads to extraordinary expert advice so that you will never again be able to buy the wrong camera or lens that you will regret later.
* Customers can take the cameras outside and try them out.
* A beautiful nature route has been mapped out where you can test the camera extensively.
* Outside the shop, electric bicycles are available for you to take the photo safari.
* The shop organizes permanent workshops to become a better photographer.
In the store there are unique photos that satisfied customers have taken themselves.
* It is not difficult to exchange.

* The website is used for information about shop and photography, but not for price information.
* This shop makes a very specific target group choice: Not the masses, but the hobby photographer who wants to progress.

You can see that they have really dared to apply all 5 Ps in this shop in Losser. Customers will never, ever return here with disappointing experiences. Something that unfortunately still happens in many stores. Very annoying when you are going on a beautiful trip and it turns out that you take better photos with your Apple iPhone than with the recently purchased expensive SLR camera. That’s not going to happen in this store. The choice of these owners shows that things can be done differently. Customers are happy to pay for service as long as it is clear and clear enough exactly what that service entails. An example that many companies should adopt in the current period.

In 2020 the version specially written for the English-speaking market will also be published under the title: The price is dead, long live the service! Writers are Ton Christiaanse and me. We hope with this new edition to get companies and marketers thinking.

Paul Moers
director of Paul Moers Strategic marketing Services
writer of management books


F * ck the price, long live the service can be ordered via this link

image above: Daria Shevtsova / Pexels

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