I serve on the Board of Directors of a commercial construction company. At our last meeting, we had a discussion about the increasing competitiveness of the industry and what strategies might be appropriate to differentiate further the company. Management was talking about the increasing trend where a commercial construction company is viewed as a commodity. Whoever can provide the lowest price, meet the quality standards, and hit the completion date wins the bid.
I interjected myself into the conversation and noted that they have several clients that are significant in the commercial development business and seldom use any other construction company. In one case, they are the exclusive builder for a large firm. I asked, “Why do we have such long standing relationships with these clients and we seldom face a competitive bid situation on a project?” This prompted some thinking by the managers around the table and then some thoughts as to why. Here are just a few of the things I heard:
- “They keep coming back because they can count on us.”
- “Our construction quality is high because the number of punch list items are few.”
- “We give them a firm budget upfront and have few change orders that add costs to the projects.”
- “Our project managers and superintendents have more years of experience than any of the competitors in the construction market.”
I then asked whether or not these differentiators were featured prominently when making a proposal to a client that was not as loyal. The answer was “no.” Many reasons were given as to why not but they thought such statements would not be believable. I urged to them try it and see what happened. It is too early to see if a clear statement of their value proposition will make a difference, but I think it will.
The real key to loyalty is having a supplier, no matter the industry, that you can count on. If the customer says I can count on a supplier then not only are you meeting the customer’s rational needs but you have managed to engage that customer emotionally. Customers who are emotionally engaged are far more likely to come back, spend more, and tell others about your great service and products (see Human Sigma).
I have had clients say that there is not an emotional component to the products they sell or the services they provide. Baloney! I recall a trucking company with which I was consulting. They purchased fifty new over-the-road tractors. I remember they parked them in the headquarters parking lot and asked employees to take a look. I noticed that while they were parked nearly all the employees took the time to see the new tractors. There was a palpable sense of pride in the new equipment. I would describe this as emotional.
When you provide a service to a customer or sell a product, think about ways to make it special. I know of a lift truck dealer touches up the paint in the cockpit on the lift trucks that they service. When John Deere sells a larger tractor, the farmer is invited to drive the tractor off the production line and then test drive before delivery. Both of these are examples of how companies get emotional with their customers. How are you doing it?