It seems that more and more often organisations are competing on price. We live in such a price dominated world. We are bombarded by prices every day. From the Petrol station price boards to the jingles "Down, down prices are down". Our continual exposure to this price war mentality has a big influence on us especially when it comes to the pricing of our our services and goods.
If we have competition we tend to think that what we should be doing is lowering our prices. While we can almost always find a way to lower our costs of production or service expenditure in the long term we just run out of features, elements and activities that we can cut or reduce. In the end our final service or product quality falls and so too does our success.
So if price cutting is not the key to long term commercial success, then what is?
I've been discovering how many organisations can still provide a premium product or premium service without having to enter into a price war. The insight lies in the expectations of the customer and the degree of memorability of the product or service experience.
Let's use an accounting firm as an example. A client needs some accounting completed on time and on budget. The accounting firm completes the work on time and on budget yet nothing more. Although have met the clients expectations and created a transaction, because the have merely fulfilled the clients expectations and nothing more, to them the experience is forgettable.
Imagine now that client calls back and asks for some special reporting to be completed for an urgent report for the board of directors. The time frame is beyond the expectations of a normal delivery time, yet the accountants manage to complete the task with aplomb. The client has experienced a positive interaction and they will remember that for the future.
Consider however what would happen if the accounting firm, did a little digging and found out that their key client contact was looking to buy a new house. They brainstormed some ideas and purchased an inexpensive but best selling book on purchasing property tips and they compiled a list of trusted mortgage brokers they knew of.
They packaged it up in a nice box and called it the 'home hunting toolbox' and delivered it to the key client contact. Needless to say the client contact wasn't expecting this at all, and was flummoxed as to how they even knew out their house hunting. By tapping into their imagination the accountants provided an unexpected and unforgettable experience that will help to make their client a raving fan.
While the actions and activities went beyond the expected service delivery, it was low cost and easy enough that it didn't impact on their profit margins. What's more important is that by continually looking at delivering unforgettable unexpected experiences for their clients, they are able to charge more than their competitors. Imagination in action is what commercial innovation is all about.