Providing Value...

My first car was a 1972 Chevy Chevelle. It was painted gold and primer gray. I lovingly tried to restore the decaying car until the hole in the floorboard became big enough to lose a passenger. I continued to drive that car, as I put myself through my first year of college.

One summer, the muffler fell off in the middle of the street. I stopped, threw the muffler in my trunk and continued on.

The next day, I visited a local muffler shop that's advertising vowed: "We'll only replace what's needed." There I met the owner: Rick. He welcomed me, gave his tech my keys and offered me a cup of coffee. After a few minutes the tech called me into the bay to look at things.

"You need a whole new exhaust system," he said. "Look at that hole there, the thing is falling apart. I don't want you breathing all that carbon monoxide."

I took my key and firmly tapped at the area around the pin hole. It was solid.

I walked back into the waiting room.

"So, should I write up an order for you?" he asked.

I brought him back and tapped along the exhaust pipe.

"Your tech said I need a whole new system," I said. "This looks like it will last longer than the car to me. What do you think?"

"Well , I want my guys to sell stuff, you know," he replied.

"Sorry. Not to me," I replied. "Only replace what's needed. If the car lasts me to end of summer I'm happy."

There's a conflict in business between "selling stuff" and "serving customers". And that tension often can destroy long term gains for a quick sale.

Perhaps the book "The Ultimate Question", puts it best: "Bad profits are about extracting value from customers, not creating value."

Creating value creates fanatically loyal customers.

I know at least a dozen people who, without being asked, rave about Costco (a hero in "Ultimate"). You'd think they were paid to shop there. "High quality, low price," is their mantra.

But providing value isn't always about low prices. My fellow Apple Computer fans pay a premium for what we feel is an unparalleled user experience. The value outweighs the price tag. Apple has created the kind of value that builds loyal customers at a premium price. And they are consistently profitable.

Unfortunately, Rick's Muffler Shop was shortly out of business.

What can you do to increase the value of your brand? Ask customers what they love -- and what they hate. Fix what's wrong. Promote what works. And watch how it revs up your sales growth.


- Phil Sasso