What Is "Value" To Your Customers?

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Perhaps it’s only fitting to mark the passing of one of my professors, Peter F. Drucker, by meditating on one of his favorite, and I believe, most important questions.

Whenever my classmates and I would boast about our products, our technologies, our specialized experience, or say anything at all self-serving, he’d swiftly bring us back to reality by noting: “All of that is fine, but what is value to your customers?”

In other words, it didn’t matter if we believed we beat the pants off our competitors by having more branches in more places. If we couldn’t argue convincingly to the internationally famous Father of Modern Management that our customers agreed with us, those branches, no matter how sparkling and expensive, were of no consequence, whatsoever.

In fact, by focusing at all on our own opinions, instead of actively monitoring and measuring our customers’, we err in two ways. We waste time and resources looking inward, which is decadent, and we insulate ourselves more and more from the only people who really matter in business—customers—who pay our bills and provide opportunities.

Value isn’t always obvious, Drucker would point out. We may think we’re providing one satisfaction when the customer is really deriving another, more significant satisfaction to him.

Take a modern gym, such as Bally’s or 24-Hour Fitness.

Their generally accepted purpose is to “get people into shape, ” if you ask most of the people who work there. Certainly, many people buy memberships for that stated purpose. But there are lots of other reasons people sign-up.

For some, it’s a social outlet, for others, a sanctuary where they can set their own pace, relax, and escape the demands of family and co-workers. For a few, it’s a chance to preen, to show-off their abs or biceps or whatever the muscle de jour happens to be.

If you observe most members, they’re in no rush to move from station to station. They linger, and their heartbeats seldom seem to reach that magical aerobic moment when calories happily burn away.

If they’re pushed by the staff or by other patrons to work harder or faster, they rebel, if only silently.

They want to get into shape their own way, which of course, isn’t always technically feasible, but many folks con themselves into thinking that they’re progressing. Their victory is walking through the gym’s door, not in becoming an Adonis.

To run a financially successful gym, one would have to accept these customers and make it possible for them to maintain their illusions, because these illusions are satisfactions to them. Illusions constitute “value, ” in the Druckerian sense.

He was fond of telling us how his young niece requested a special gift for her birthday, which provided no functional utility at the time-her first brassiere. Instead of dismissing this request, he understood it as a desire to feel more grown-up, and he honored her wish, giving her a truly valued gift, and great joy.

Not only do we have to ask the all-important value question. We need to re-ask it, if we hope to keep pace with and to retain our clientele.

Realities change, sometimes suddenly. GM’s biggest SUV looks very different when the price of gasoline spikes. Bally’s has to stay on top of trends, and offer Pilates or yoga classes, depending upon what seems to be in demand. It can’t say, “We’ve always run dance classes, and that’s it!”

Being guided by customer sensibilities can be very scary to some businesspeople. It requires us to challenge tradition and preconceptions, to open up, to ask questions, and to renounce authoritarianism. We need to be willing to really understand the viewpoints of others, and to cater to them, to serve them the way they want to be served.

We need to be prepared to abandon our favorite products, the ones that have defined us and nurtured us, when there is the hint that they no longer deliver value to the customer.

That’s tough, and that is part of the legacy of Peter Drucker.

As former GE CEO Jack Welch said, Professor Drucker had a knack for asking the right question, usually a deceptively simple one, that could add tremendous clarity and value to one’s business.

Dr. Gary S. Goodman is a popular keynote speaker, management consultant, and seminar leader and the best-selling author of 12 books, including Monitoring, Measuring & Managing Customer Service. Gary’s programs are offered by UCLA Extension and by numerous universities, trade associations, and other organizations in the United States and abroad. He studied directly with Peter Drucker at Claremont Graduate University, for two and a half years, earning an MBA, in the process. When he isn’t consulting, Gary can usually be found in Glendale, California, where he makes his home. He can be reached at gary@customersatisfaction.com


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