Tag: value

Implicit value of our time

When we spend 20 minutes of our time trying to save $5 by availing a painfully hard to avail deal, we implicitly value our time at $15 per hour.

We also neglect the opportunity cost of that time – time we could have spent relaxing, exercising, conversing with family, and so on. As the saying goes, penny wise, pound foolish.

For those of us who grew up in circumstances where money was relatively tight or for whom the desire to optimize everything to the best possible outcome takes over when dealing with money, it becomes particularly important to set an explicit value of our time.

It makes it easier to stop ourselves from spending one more hour to save a few bucks off the price of that table.

And, most importantly, it forces us to focus our energy on the areas that will actually move the needle on our happiness and productivity.

Managing perception and leading with it

“Perception becomes reality” – is one of the marketing’s cardinal principles. Taken to its extreme, it could mean working away at improving our perception, i.e. “our brand,” at the expense of everything else. In this race to improve perception, it is easy to forget that…

… companies renowned for good customer service start by providing great customer service.
… we get better at leadership by caring more about people, processes, and results than the next person.
… a person’s network is directly proportional to a person’s net worth – valued either by money or by character – sometimes both.
… and so on.

Perception undoubtedly matters. But, building a brand on perception is akin to vaporware. A select few manage to use the fuel from vaporware to build great products. Most don’t.

The most reliable way to build brands – organizational and personal – is by actually doing/building good things that create value and/or impact people in positive ways. Once you work on improving reality, it is critical to manage perception.

But, beware leading with it.

Customer retention

For most subscription services, customer retention is the holy grail. Retaining a customer is cheaper than acquiring a new one. In addition, retention increases your chances of getting referrals. It is, mostly, a no brainer.

So, how do we actually go about retaining customers? While there are multiple levers, there are two that likely drive most returns. One of them is the obvious one – make sure the product or service is valuable. If there is a lot of value relative to what we are paying, we will stay.

And, the second key lever is customer service. If you have outstanding customer service, you do two things at once. First, through customer service interactions, you constantly surface additional value that we are probably not aware of. Second, you make sure we never leave in a fit of anger or frustration.

Now, the fact here is that value matters more than customer service in most cases. Comcast charged me an extra $10 on my bill for 4 straight months. I called their customer service 5 times in the process and was told, every time, that the problem was solved (until it eventually was). However, they do deliver a solid internet connection. And, besides, given their near monopoly where I’m at, they become more valuable. But, am I a loyal Comcast customer? Absolutely not.

On the other hand, the chances that you will get me to switch from either American Express, Audible or In Motion Hosting is very very low. They check the “deliver value” box comfortably. But, they outdo themselves in their customer service. In Motion Hosting, my hosting provider, is exemplary in this regard. I know they are an email away. I am sure they will be helpful. And, I also know that they’ll do so with cheer. They have made sure I will never leave.

The human analogy for a fantastic customer retention strategy is to think of competence and attitude. It helps a ton to be competent. In many cases, even if you have a bad attitude, if you are only among five other sought after rocket scientists on the planet, you will do just fine. However, layer in a great attitude and you will be indispensable.