Delivering Value through Quality Experiences
Leaders of an organization drive value. Positive experiences their employees have working at their firm and a long-term, positive relationship customers have when buying their brand are the desired output of value.
At Airlift, we believe there is an equation to delivering value.
We believe the QE/P=V ™ . This is defined as “The Quality of an Experience for the Price paid in time and money is Value.” Think about quality experiences you have had with your favorite brands. What works best for you?
The QE/P=V equation works across all categories, brands and all economic ranges. But can the quality of an experience differ that much within the same category. The answer is “yes” and that is why one brand may outperform over another.
Let’s take a look at three retail brands targeted to three differing consumer economic levels with their product offering; Costco Wholesale, Target, and Nordstrom. How does each of their value equations stack up?
Costco Wholesale™ is a member-based warehouse club designed to offer small businesses and families “substantially lower process than found at conventional stores. A shopper may wonder how an experience whereby consumers must show a card to get in, shop among aisles with little merchandising on concrete floors might be positive. At Costco Wholesale the Quality Experience plays out in many factors.
QE at Costco: The choice, the quality brand names, the fresh food and the volume make shoppers feel empowered that it is all under one roof. Price is the driver of value in two ways. Shopping at Costco is a relatively fast shopping experience. They know time matters to the customer so their products and services are easy to find.
P at Costco: Their great prices are delivered because of their packaging strategy. Products are offer in volume packages so customers enjoy low unit prices and get the bulk quantities they need.
V at Costco: Overall value in the experience is delivered because all the drivers of the QE/P=V are in play on every transaction; not just low prices.
According to Jim Sinegal, the Company's President and Chief Executive Officer, "Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members." 1
Target’s value proposition is all about delivering affordable design. Their well-lit, bright stores are organized and designed to help customers shop and find products with ease. Target was ranked as number 11 in Fortune Magazine’s 2008 Most Admired Companies; an honorable achievement for a retailer. Their highly recognizable bulls-eye is a sign of great value as they seek to make each shopping experience happy.
QE at Target: Affordable design is the brand differentiator. There is something for everyone at Target with a range of merchandise fully stocked each night. Target’s merchandising and merchandise changes so well with the change of seasons and holidays. From Valentine’s to summer, to back-to- school and Christmas, shoppers feel they have through all of their needs when it comes to making the home relevant. Shoppers rarely need sales assistance but when they do, the staff is friendly and knowledgeable.
P at Target: Target saves us time and money. They believe the customer deserves low prices and great design; a rare combination for a retailer. Delivering on this is differentiating.
Target Brand Promise: Target is the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less.® brand promise.
V at Target: Offering low prices does not mean the retailer has to be cheap. They over deliver on V in the value equation as they surprise and delight the customer on every aisle.
Nordstrom is a shopper’s delight. Founded by a Swedish man named John Nordstrom, opened his first Nordstrom as a shoe store. This later became the largest independent chain shoe store in the US. The company's philosophy has remained unchanged for more than 100 years. Their mantra is to “offer the customer the best possible service, selection, quality and value.” While the cost is goods are higher, the overall QE/P=V equation at Nordstrom is delivered on every visit.
QE at Nordstrom: Their high-end merchandise supported by happy, empowered sales associates drive a great QE. Today their stores are merchandise by lifestyle and are supported by well-trained, inspired, happy sales associates. They are notorious for hiring the right people because they empower their people to “do the best job they can” for each customer. We all know the hassle of returns. Not at Nordstrom. Nordstrom believes the customer is always right and willingly accepts an exchange or return without question or hassle. This makes the quality experience even better.
P at Nordstrom: While lowest total cost in not their mantra, Nordstrom value is delivered by offering prices for varying pocketbooks, choice in size and colors. Their shoe department is proof that choice is king for women. The stores are designed simply so shopping can be a fast or slow, enjoyable experience for all.
V at Nordstrom: The Nordstrom experience comes together because the store delivers on all attributes that are important to discriminating customers. The friendly, knowledgeable sales force always seems to know if a fashion item fits properly and are eager to show the customer how to look great.
Three retailers appealing to three varied consumer segments can all achieve value through quality experiences. No matter what business you operate, your QE/P=V must be clearly defined to help differentiate and remain competitive. It is a dynamic equation that also must change with the times so you can stay in business. Clearly articulate your current experience and then define a newly desired quality experience. Revisit your pricing strategy in this economy and the time it takes for consumers to buy your brand. This will keep your value equation in check at all times. Seek to make each experience a quality one so your brand gets the credit for delivering the great value it deserves.
For more information on how to achieve a quality experience and value for your brand, contact Airlift Ideas at srosen@airliftideas.com
1. Costco Wholesale website www.costco.com
2. Target website www.target.com
3. Nordstrom at www.nordstrom.com
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