Have you ever noticed that people who are successful have something just a little bit extra?
Take McDonald’s as an example.
Their hamburgers are average. Their service is competitive. What makes them so much more successful than any other fast food restaurant in the world? The extras.
I can’t prove this but I’m pretty sure that little kids demand to go to McDonalds because of the toys they receive and the playground they enjoy.
When Your Product Is Indistinguishable
You use a “Value Add Strategy” when your company’s product is indistinguishable from your competition’s product. When this occurs, don’t sell your product, sell the added value you will give your client.
The added value becomes your product, not the actual product.
For example I’ve been traveling all my life, but for a short trip of five days or so, I’ve never had a better time than when I went on Bonneville International Corporation’s (BIC) client trips. BIC is a broadcast media company that owns radio stations, etc. all over the country.
Most of the time the music they play on their stations isn’t that much better than what is played on their competitors’ stations. Yet, BIC consistently made more money than their competitors in the late 1990’s and early 2000’s. Why? My guess is they offered more extra value to the clients who bought advertising on their stations.
For example, one time KSL Radio and TV (BIC broadcast properties in Salt Lake City) offered a trip to Hong Kong to their clients who buy advertising time on their stations. My wife and I went along as invited guest. Everything was first class, even our airplane seats. We stayed at a five star hotel right on the water. The president of KSL rented a limousine and took us sightseeing. They purchased a side trip for us to be some of the first Americans to visit Beijing in over 30 years.
At this time I was a management consultant, and didn’t own any company. But they took us anyway. Later, however, when I did and do own a company, KSL is the first station we pick to advertise on. Why? They over deliver. They are a “value added player.”
Merrill Lynch
The same can be said for banks. In the early 1980’s, I was like most others. I was a religion teacher with a modest salary and a large family. I received the same service everyone else received from their local banks.
Then Merrill Lynch came out with a tremendous offer. If you could come up with ten thousand dollars, they would give you a “Cash Management Account.” With this, you could write checks, have money market interest rates that were calculated daily, and you had access on a 24 hour basis to see how much money you made each day.
My aunt and I came up with 10k and opened an account. I’ve been with them ever since. That original ten thousand dollars has increased many times since then. All from the fact that Merrill Lynch gave a modest client a little more.
Something more …
I’m convinced that most standard products are pretty much the same. Hence when the business offering the product does something extra, that makes a lasting impression on the buyer of the product.
Deep down, when a vendor or retailer or service provider does something a little extra for me, I want to repay that by ensuring them of my loyal patronage. For example, when I check into a hotel and they call me by my name, that’s a little extra that matters to me. I tip more liberally, and I return to that hotel again and again.
In fact, that goes for everything I do. From the shoeshine stand to the receptionist at any business I frequent, if I’m treated with a little extra care, I do everything in my power to return the kindness and continue to give them my business.
I’m a lot of things, ungrateful isn’t one of them. When someone gives a little more than is expected, I’m grateful and that gratitude turns into my wanting to ensure they have more and more business.
My Own Situation
As a management consultant, I charge a fairly large amount for my services.
Most management consultants perform similar services. We go into a business, assess their challenges, and give them recommendations on how to overcome these challenges. For that we charge up front consulting fees.
When I first started out, I recognized that my services weren’t that much different than the next consultant’s services. Realizing this, I came up with an idea which allowed me to give the client extra value for services performed.
First, I didn’t charge up front for my services, but staggered the payments. Next, I stayed with the client and helped them implement the recommendations I had given them. Last, I adjusted my recommendations as I helped implement them. In other words I won’t leave until the recommendations succeed.
For these value added services, clients have retained my services anywhere from six to twenty years on the average. I’ve never been without active consulting contracts since I started consulting some thirty years ago. And I just agreed to a five year extension with one of my top clients. I will be consulting well into old age (even though I do not believe in old age.)
Give more than what is expected. It’s a strategy that has worked well for me.