Visual Value
Another Look at Perceived Value
By John Lamade

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 have
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.

VALUE TERMS
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 pay.
• Performance - ability to meet expectations.
• Expectations - anticipated or desired outcomes.
• Outcomes - the effects or results of doing or using something.
• 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 customer?

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 can differ.

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.

COMMUNICATING 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.

RECOGNIZING VALUE
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 jlamade@msn.com.