Whether winning new customers or fighting to try to keep and develop the value of existing customers, long-term success depends upon delivering the continual exchange of real value.
The value exchange revolves around the utility that is offered by the company in exchange for the customer’s patronage, attention or even personal data. It defines ‘what’s in it for me’ for the customer and acts as the rational, or often emotional, reason for why customers should buy your brand rather than from competitors. An interesting recent example of a brand evolving and upping their value exchange comes from the highly competitive world of Commercial Radio.
Last summer Digital Station ‘Planet Rock’ upgraded its VIP Service offering its c.1m listeners a host of reasons to sign-up including: Exclusive access to an HD Audio Stream (Higher quality than the normal DAB broadcast), online Video content, competitions, discounts at the Planet Rock Shop, discounted membership at Planet Rock Dating and finally gigs and events just for Planet Rock VIPs. In addition all airtime for VIP Club members is Ad Free meaning listeners ‘get more music than your average listener’. This service was priced at £4.99 a month and this caused a vocal backlash from some listeners, mainly because they could still get the main broadcast channel for free. Responding to this criticism, CEO Malcolm Bluemel made it very clear what it would take to preserve the station which had previously been rescued from imminent closure in 2008; “the world is changing and it’s not just about radio any more. It’s about a global brand “where rock lives” and getting people to become part of that family”.
After this explanation of the value exchange, subscriptions to the new service reportedly soared as customers agreed that not only were they getting a valuable premium service but they were also helping secure the survival of their favourite station. The fact is Planet Rock needed additional commitment and participation from its listeners to sustain the business and in return invested directly in content and experiences for VIP members that would not be available anywhere else. By being open and honest, and appealing to the emotional side of its customers as well as providing functional benefits, the station was able to succeed in developing a subscription model where so many others have failed.
The use of customer data, and seeking to active participation from customers in brand content, is a key enabler of a strong value exchange because knowing more about what your customers want or are likely to want from you, means you can adapt faster to meet their needs and identify sales opportunities. Amazon in particular has leveraged data successfully to drive sales around known interests which customers have freely indicated on their records. Having additional commitment from customers to actively provide you with their data is a good indicator of a healthy value exchange, as well as giving brands a strategic platform for driving growth.
Building stronger customer relationships and a sustainable value exchange is key to survival whether you are a niche Radio Broadcaster or the world’s biggest Tech brand. As Marketing Week said recently: “Having the world’s fastest processor, thinnest screen or lightest device won’t make the average consumer blink; to really make them open their eyes brands must communicate a purpose and why people’s lives will never be as dull, arduous or lonely without them”.
So, ask yourself, do you have a compelling value exchange proposition in place for your customers?
