Another Look at Perceived Value
This month's article started backwards. As I was considering a
topic to write about, the title Visual Value came to me. With title
in hand, I faced the challenge of writing an article around the
title. Visual value is another way of saying perceived value or
the immediate perceptions a customer has regarding the usefulness
of a product or service. To be honest, I did not think of perceived
value until later when I became frustrated with the way the article
was developing. My original concern was that many detailers - and
this applies to anybody - don't understand what they should expect
from a product. Without knowing what to expect, people can be misled
into making the wrong value decisions.
Extraneous factors - eye candy - influence your product purchase
decisions. Common extraneous factors are color, scent, or features
unrelated to the product's primary purpose. Packaging and naming
are often extraneous. Remember, value should be based on outcomes
and price. The problem with eye candy is that it can make a product
look like a better value than it really is. You must be able to
identify which value factors are important and which are extraneous
- or not relevant - to forming appropriate expectations.
One of the best examples of eye candy is the phrase "give
a bad dog a good name." If you are trying to find a new home
for an un-housebroken dog, you will not have much success if you
tell prospective buyers that the dog's name is Puddles. But it you
tell buyers that the dog's name is Exotic Mirinda von Grafmeier
or "Happy" for short, you will have more opportunities
to achieve your objective. Similarly, if you have a guard dog that
greets every stranger with wagging tail and cold nose, you will
not inspire fear with a name like Muffin. A name like Fang or Mauler
causes immediate second thoughts about approaching the animal.
As you can see, branding - naming - does not guarantee value. Pricing
does not ensure value. Many shops equate price with performance:
high price = high performance. Low price = ? Well, you don't know
- and that is the problem. Do you believe the promises and appearance
or do you take a closer look?
In past articles, I have discussed and shown that pricing is an
insufficient measure of value. Detailers and car wash managers must
know this when they buy anything. For example, if you are buying
concentrates, you must consider the ready-to-use (RTU) cost of the
dilution that delivers the results you want.
This sounds simple, but unfortunately one person's perception of
value is not the same as another's. In your shop, people may have
widely varying value perceptions about products. For example, do
your employees care how much you pay for car wash soap? Obviously,
as you manage your shop's expenses by looking for the products that
give the most performance for the price you pay, cost per RTU gallon
is more important to you than to the users on the shop floor. They
might look to other features - like ease of use, scent, personal
risk, color, and performance (Do I have to do the job twice?). And
when you consider your customers' perceived values, everything becomes
more complicated. Right? Perhaps not. Let's take a closer look.
THE EYES HAVE IT
One of the universal truths is "Beauty is in the eye of
the beholder." Each person responds according to his or her
needs and perceptions. As business people, we focus our attention
on satisfying our customers' expectations. Consequently, we must
understand what our customers want and then make sure that we deliver
on our promises. Remember that customers must believe that they
received a good value from you. If they believe that they could
have received a better value from somebody else, you probably will
not see that customer - or the referrals made by that customer -again.
How does a customer determine value? By the way the vehicle looks!
If the vehicle looks the way that the customer believes that it
should, then the customer will be satisfied - especially if the
cost also meets the customer's expectations.
If you believe that the foregoing is superficial or that the point
of this month's article is to consider the superficial nature of
perceived value, then you are on the right track. As I thought about
the piece's title, I realized that we are often misdirected and
that the things we are led to believe are "value" constituents
are not. Our perceptions of value can make us lose sight of the
important issues. We expect the wrong things! Focusing on customer
needs should help us make better value decisions.
ALL GLASS CLEANERS ARE BLUE
Imagine this scenario: A chemical distributor pulls up to your
shop with his truck and he invites you to look over his products.
As you look over the goods arranged on the truck's shelves you notice
two glass-cleaner concentrates (Please note that the names are fictional
and were chosen for the sake of this hypothetical situation. Any
resemblance to an actual product name is accidental). One product
is called Red-E Clean and is red in color, and the other is called
BlooZ and is blue.
Which one do you think is the better cleaner - without actually
knowing how each works or how much each costs? Most people would
migrate toward BlooZ because that product more closely aligns with
their expectations of what a glass cleaner should be (It's blue
and concentrated.) Selling Red-E Clean will be difficult because
it fails to match expectations (It is not blue). The Red-E Clean
glass cleaner could be a much better value than the BlooZ, but the
visual value of blue color misdirects the customer from the real
issues - ability to clean glass quickly, thoroughly, without smears,
and at the lowest cost per RTU gallon.
Do you see where all the confusion about value can cause trouble?
Let's consider the basis of value.
Before we go much farther, we need to define some terms. By
understanding meanings, we can arrive at the same conclusion at
the end of the article: Your expectations must be shaped by the
customer whose subjective expectations are based on perceptions
(visual value - I'll know it when I see it). Because these expectations
are not based solely on objective criteria, the detailer must understand
these expectations thoroughly. What is most important to the customer?
Additionally, the detailer must also be aware that his expectations
are often equally subjective and that value cannot be based solely
on superficial criteria.
Value - the performance you get for the price you
Performance - ability to meet expectations.
Expectations - anticipated or desired outcomes.
Outcomes - the effects or results of doing or using
Cost - the price you pay for an outcome.
You could also define value as the ability to get the anticipated
results for the price you pay. A good value, then, is one that produces
the desired results for the amount paid. Similarly, a poor value
is one that fails to produce the desired results.
So, we have a good definition that hinges on "anticipated
results." What are the anticipated results? This is, of course,
subjective because we really need to know for whom the results are
anticipated. Are your anticipated results the same as those of your
In most cases, we can say that the anticipated results are the
same or at least similar. After all, you use a window cleaner to
satisfy a customer's expectation of clean glass. Both you and your
customer expect the product to clean the glass, but there is a difference.
Most customers do not care what you use as long as the result -
clean glass - is the outcome. And the person cleaning the glass
is probably indifferent about how much you paid for the cleaner
as long as it helped them produce the desired result. Consequently,
while the expectations may be similar, the value applied to a product
If this seems somewhat complicated, then think about it this way:
The customer wants clean glass and expects to see clean glass. How
you get there is irrelevant. The outcome is the important issue.
If satisfying your customer's expectations is your primary goal,
and you know that the process is unimportant, then your expectations
and product selection should become simpler. You would realize that
your expectations should be shaped by the desired result and cost
of getting there.
How do these new expectations make your life easier? Your expectations
for a product, then, should be based on the product's ability to
produce the desired results in the most economical manner. Notice
that I have added a "value" statement "economical
manner," because I believe that a profit-oriented business
should choose products and processes based on their ability to contribute
to the overall profitability of the business. Why pay more if it
does not contribute anything?
Getting back to the BlooZ and Red-E Clean, it now becomes more
obvious that the product's color and thickness do not contribute
anything to the product's ability to produce the desired results.
If you think that the blue color is important, then consider that
many solvent-based dressings are blue, too. How often has somebody
picked up a bottle of dressing and sprayed the windshield? Yeah,
it happens all the time.... Now, if you consider that only some
features are superficial and really don't have an impact on the
desired outcome, you can make a more informed decision regarding
which product to choose and how to form your own expectations for
a product's value. But how do you determine the best value among
many competing products that can deliver the desired result?
One way is to work with your distributor. Most shops do not buy
directly from the manufacturer; they buy from a distributor. Distributors,
like products, have differing values based on how well they meet
your expectations. When you collaborate with a distributor, you
can reach both customer and your own expectations more easily. In
addition, the collaborative relationship the distributor shares
with the manufacturer should result in products that meet your expectations.
So far we have seen that satisfying customer expectations or
getting the outcomes the customer wants is the best way of shaping
your expectations. This sounds simple, but the first thing you need
to know is what does your customer expect? The best way to discover
what is important is to ask your customer. Once you have this vital
information, you can then commit to providing those outcomes or
to inform the customer that the expectation cannot be satisfied
and that certain needs can be satisfied only by non-standard processes
that the shop may or may not have. For example, some shops can do
dent removal or fabric repair and some cannot. If the customer expects
fabric repair and you do not provide the service, the customer will
be disappointed. The customer will not consider your work a good
Value is subjective. By letting your customer's informed expectations
shape your expectations, you can select products based on their
ability to produce the desired result most economically, or at least
in a manner consistent with your business' objectives.
How do you decide which product features are superficial and which
are not? Keep the desired outcomes in mind and work with your distributor(s).
Select your suppliers based on their ability to contribute to your
business' success. Demand packaging and performance innovation.
For example, why pay $100 for a drum every time you buy chemicals?
Find out if there is a way to buy the chemicals and not the containers
and save the money.
Understanding the desired outcomes comes first. Then you must find
the products that will help you get there. This may be simple or
difficult, but the quest will produce its own rewards.
John Lamade has extensive experience in the marketing of detailing
products and is a contributing editor to Auto Laundry News. Contact
John via e-mail at email@example.com.