Budgetcarinsurance

It seems everywhere I turn someone is trying to upgrade me, or sell me something in addition to what I want, or get me to do more work to use their services - all in the name of providing me with more value. The heating and air conditioning service guy now wants to clean my ducts and my fireplace chimney. The dentist tells me that I need to have the area between my two molars and my gums cleaned (flossing doesnt get there) at a cost of two hours and over $400. And every business now seems to have a telephone answering system that replaces their receptionist with way too many numeric presses by MY finger only to be disconnected or routed back through the same choices again.

Without realizing it (my wife pointed it out) I have moved away from many tried and true service and product suppliers to those who are sticking to the basics - or at least to the ones that reflect my basics. Even my old friend American Express received a nasty rejection of a service I had used for a long time - auto rental coverage. I recently opened a letter from the company advising me that changes had been made to this coverage as detailed in a brochure that was enclosed. The brochure was four pages (front and back), in 8 or 9 typeface, with no margins top, bottom or on either side.

My letter canceling this coverage stated that I was not inclined or equipped to read that enclosure to find the changes - which I was confident were not made with my best interest at heart.

In another example I watched a TV ad with fascination about a new feature on a certain automobile that would parallel park the car with no involvement from me. Out of curiosity I inquired what the option cost; the salesperson quoted me $1000. I then asked my independent repair mechanic what he thought it might cost to fix that system - should it need repair; he said that based on what he had seen so far, anything complex would have to start at $1000 (at his rates which are about half what the dealers service shop charges.) I then asked my insurance agent if that option might have a higher premium. She said yes, probably something similar to the difference between a two-wheel drive and an all wheel drive. Oh you didnt know about that one?

Let me turn this around for a moment. From 1997 to 2003 one of my businesses produced a direct mail, relationship-building newsletter for boat retailers. We had a dozen or so clients who used this product four times a year to talk to their customers and prospects about why they were the best place to buy a boat. Our newsletter was good enough at communicating the uniqueness of that dealership so that one customer stopped all other types of marketing.

When the Internet and web sites started to catch on the dealers began to focus more of their attention on that type of media, that direct mail had seen its day. I cautioned against going overboard (no pun intended) stating that they were moving from a relationship oriented business to a transaction oriented business and that in the end all they would wind up doing is competing on price.

Guess what, last week I got a call from a dealer asking me if I could do a newsletter for his shop. He said his clients missed it - they liked the information and when they saw the special discounts on the back page they felt they were special.

Now I admit that Im a pretty conservative person, but at the same time I am a strong advocate of finding better ways to do things. I spend a lot on our computers and the software that we use to make our work more efficient with higher quality results. I also spend a lot making our facilities more energy efficient. What concerns me is that I am spending more time and effort listening to people as they try to get me to buy something more that I asked for AND most of those people really have no clue what benefit, if any, that addition may have for me.

I used to argue that too many of us had fallen into the trap of wanting the bigger - better car, house, TV, etc. and that we had to question why. Ive now come to the conclusion that many of us do so because there no longer are any options. No body offers the simple, serviceable, perfectly fine replacement anymore.

I understand why. It costs almost nothing to try and sell an upgrade and the difference in profit between a Chevy and Cadillac or a regular and a super-size is enormous. So the reward for successfully selling the upgrade is equally enormous. But is it? Is there a downside?

I think so. Every successful up sell puts the pressure on the purchaser to begin up selling his or her products and services. So more money is spent on only marginally more worthwhile products and services thus encouraging those who can up sell their products and services to do so, while pushing those who cant increase their income further down the food chain as it becomes more difficult for them to stretch their disposable dollars

As my old economics professor used to say, Some savvy business people are going to see opportunities here.

Lets begin focusing on how to produce more value, real value - not feel-good value and stop focusing on how to extract more dollars from our good and loyal customers - just because we all ready have them on the phone. You really dont want them to become transaction focused rather than relationship focused, now do you?

# posted by taniayegn : 7:10 PM  0 comments