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It’s a phenomenon that highlights the value of providing consistency to your customers. | Source: Shutterstock
It’s a phenomenon that highlights the value of providing consistency to your customers. | Source: Shutterstock

The value of giving your customers certainty

Customers crave certainty and predictability from the businesses they interact with. DAVID BROWN  reveals the hidden value of reliability.

In June of the past year, the Federal Reserve in the US raised interest rates by 0.75 per cent in an effort to combat inflation.

In the days and hours leading up to the announcement, the share market had been in a decline for five consecutive days in anticipation of a potential rate rise and the fear it may be as high as what it eventually was - the biggest increase in 28 years.

Markets traditionally fall with interest rate increases. A combination of their impact on business costs and hence their profit, and the fact investors see higher interest rates as an alternative place to invest their money.

“Markets traditionally fall with interest rate increases. A combination of their impact on business costs and hence their profit, and the fact investors see higher interest rates as an alternative place to invest their money.”

Within minutes of the worst expected scenario playing out the market took off, climbing higher despite the confirmation of what many thought and feared would happen.

Fast forward to July and the same scenario played out in Australia.

The local share market took off immediately after the announcement of a half-point rate hike, despite some negative trading in the lead-up to the announcement.

A similar situation has been observed following recent political elections. The uncertainty of not knowing the outcome of an election is rapidly offset by positive trading once the results are in regardless of which party wins.

To most, the response of these share markets seems counter-intuitive.

Surely, one would think, the confirmation of unwelcome or dreaded news would be seen as a negative. And yet, it is a perfect example of how the public at large would prefer the certainty of their worst fears being realised.

A lesson to learn

So, you may be reading this and wondering, sure that’s very interesting, but what has this got to do with my jewellery business?
It’s a phenomenon that highlights the value of providing consistency to your customers.

I remember reading an article many years ago about a customer who visited a local hairdresser. After several visits, the customer stopped going to that hairdresser.

Was the haircut bad? The customer service poor? The price too high?

None of those aspects of the visit were the specific problem and, in fact, the haircuts were all very much the same. The issue was consistency.

“So, what level of consistency do you give your customers? Do they know what to expect each time they visit? Is there a consistency in the quality of your product? What about your level of service? Do you leave your customers wondering what to expect with each visit?”

Occasionally, the customer would be charged one price and other times a different price. The customer would be offered an espresso by one hairdresser during a visit, and then the next time, not offered one by a another hairdresser. The person cutting his hair would constantly change.

In the end the customer found the uncertainty too much to deal with.

Now, you may read this and think that it sounds like a particularly fussy customer, but it’s important to understand that other customers will likely think the same way. Even 10 per cent of customers leaving for this reason would be a ‘loss’ to any business.

Big business

If you don’t believe this situation, how about an example for one of the biggest businesses in the world?

Ask yourself this question – why do you eat at McDonalds, or any fast-food franchise for that matter? Is it the quality of the food? Does McDonalds make the best burgers?

Most people would agree that no, they don’t. In fact, you’d be hard pressed to find someone who would adamantly defend that statement. And yet, McDonalds is the world’s largest fast-food restraint chain.

What McDonalds provides is certainty.

Whether you’re dining in Athens in Georgia, or Athens in Greece, you generally know what you’re going to get. It’s this consistency and by extension certainty - rather than the quality of the product – that drives customers to their door.

So, what level of consistency do you give your customers? Do they know what to expect each time they visit? Is there a consistency in the quality of your product? What about your level of service? Do you leave your customers wondering what to expect with each visit?

High-profile author Tony Robbins talks about the contradictions we all have within ourselves. One is the tendency
to want adventure and surprise and the other is the need for a certain level of predictability.

We work in an industry that needs to provide a little of both to people. The importance is to ensure they get the right dose of each where they most require it.

 

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ABOUT THE AUTHOR
David Brown

Contributor • Retail Edge Consultants


David Brown is co-founder and business mentor with Retail Edge Consultants. Learn more: retailedgeconsultants.com

SAMS Group Australia
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