Now the easy part is over and you actually have to find an innovative and well-organized manner in which to communicate with these stakeholders. Whatever strategy you use, it is helpful to have a communication plan put in place, so that the procedure runs smoothly without negatively impacting on productivity. Using a combined software package could be the answer, particularly if you want to keep a specific group up to date about a certain project. Regular reports are useful and email’s of information, are very effective for those individuals who are not privy to sensitive information. Going one step further, these can be divided into an internal and an external newsletter; the first being only for staff and the second for clients and interested parties. For small groups and occasionally large ones, meetings are a good way to get a message across and invite buy in and feedback. Remember that in order to be effective, this engagement should be two-way. Stakeholders need a forum to air concerns and grievances while having the comfort of knowing they will get a response. Neglecting this element of communication is bound to undermine the ultimate goals of your organisation. Regardless of tactics though, the important part of this aspect of the process is understanding and managing stakeholder expectations. Your stakeholders need to know when to expect communication and what sort of communication to expect. There is little point in engagement with your stakeholders if it is perceived to be ineffective. While it’s admirable that you are trying, this lack of usefulness is not going to encourage buy-in and may weaken your company, particularly if the disapproval spreads. It is thus important to track and keep an eye on your efforts and gauge the response to them. Speak to individuals directly, encourage feedback and through email tracking assess whether people are actually reading the information that you are offering to them! Try to adjust your efforts accordingly. Part of this is keeping a finger on the pulse of your company’s reputation which is also important. Conduct surveys if you shall feel necessary and establish who thinks what and why. Knowing what the perception is will go a long way toward finding the necessary means to turn it around.
How service quality and service delivery enhances customer satisfaction. An advantage can be achieved when a firm offers clients value that they simply cannot get elsewhere. By creating such an advantage, the firm can obtain higher prices and earn higher profit margins. This advantage can be economic or psychological, or both the first is particularly important in business markets where buyers are encouraged by the aim of increasing profitability of their own enterprises.
Economic value to the customer (EVC) is a central theory in pricing products. By developing an offer with a high EVC, a company can charge higher prices and still offer its customers greater value. The higher priced product may offer value because it generates more output than its competitor or because the operating costs associated with it (e.g. labour, depreciation) are lower over its economic life. If a competitor wants to remove the market leader, it must offer a superior EVC. One was is to simply price cut. But this is not likely to be a crucial strategy. A better way may be to centre on building a more beneficial way that cuts up, start-up and operating costs. (Buttle, 2009: 197) Says “The concept of EVC is most useful when a new brand has a certain economic advantage for the buyer”. At other times the advantages of the brand are perceived or psychological rather than economic. This is generally the situation in consumer markets. There are a number of research methods to determine the perceived value of a brand. One of the most popular in recent years has been “trade-off analysis”. This has been applied successfully across a wide range of consumer and industrial products and services. (Egan, 2008: 67) States “Trade-off analysis recognises that in developing a new product the manager has to decide among a range of different and potential features. These features add costs, but they may also substantially enhance the perceived value of the product to the buyer”. Trade-off analysis helps the manager the combination of product features and price that will optimise profits.
“Where sales people focus on selling their product or its features, they fail to take advantage of many opportunities to show how their company’s offer differs from others” (Leader, 1994: 45). When this is weak, price competition becomes much more important to the sales team. To avoid this, one vital approach is to sell packages not products. Packages include the services, technical support, terms and guarantees offered alongside the product. A further step is to show economic value to the customer (EVC), rather than just the price. This means showing the life cycle savings resulting from accepting the firms offer. Here the supplier demonstrates economic benefits rather than just the purchase costs. A more general move is to build brands and give emphasis to the confidence and reduced risk involved in purchasing a well known brand. One increasingly powerful method of offering economic value to the distributor is through a time- based advantage. Retailers for an example can increase their return on investment by carrying fewer inventories. This is the case for for fashion-based retailers, large stocks involve not only involve high storage costs and carrying costs, but also high risks of the stock becoming out dated by changes in demand and forecasting errors. If a manufacturer can increase its flexibility by focusing its factories around small storage of lots, much shorter lead times and faster order processing, it will for instance find retailers willing to pay far higher prices, therefore increasing the revenue for the business.
Pricing is the only element of the market mix that directly generates revenue; all the others add costs. Pricing decisions almost always have the biggest impact on both – short and long-run profits. In the short run, inertia among buyers invariably mans that price increases will substantially boost the profits. However as stated by (Egan, 2008: 56) “Such a strategy is extremely dangerous in the long run”. Over the longer term, higher prices depend upon offering superior perceived quality and value to both consumers and resellers. Skilful companies create exit barriers that make it increasingly difficult for the customer to switch to lower-price competition. Such barriers may include outstanding levels of service, loyalty schemes, online links between supplier and the customer, providing, specialised equipment, good training and research and development partnerships, however according to (Doyle, 2006: 234) “Exit barriers act to bind the customer to the buyer, making it unattractive to throw away the investment embodied in the relationship”
It is possible to gain value through customer communication. Companies are now able to create value for customers from communication practices that were impossible many years ago. A significant change is the way we interact with computers, i.e. face book, social networking sites and the internet as a media as a whole. In days of age customer communication had been a one way process company to customer, customer to company. Customer communication can now be channelled through e-mail, web forms, instant messaging.
Another way of creating value for customers is to allow them to customise their product. For instance you can now spec your own type and colour of Nike footwear on the internet. Branding also comes into play when adding value; it has associated almost like a psychological association with the customer, that they are knowing buy buying into that brand that it is of reasonable quality. Value from physical evidence has become apparent. Physical evidence may be such things as the company’s premises and their environments. Web portals can also act as physical evidence. Many companies have now developed web portholes for their customers and partners. Users can access the information through a secure sign on and have information supplied to them, according to their specific needs. Many companies also claim that people are their key source of customer value. This is more so for the more professional services such as counselling and coaching for instance where people themselves are the very product! A good service level agreement, increases value, as it forms a legal bond between client and company, therefore securing the company’s word with the client.Product service bundling is the practice of offering customers packages. Tour company’s use this method quite often, buy bundling flights accommodation and transfers together. Also buy changing the bundle being given away the bundle can seem to the customer very attractive.The is also a concept called the ‘marketing mix’ is really a way of describing a process of combining things together to create added value to customers. Eugene McCarthy grouped these together as a classification known as the 4p’s, product, price, promotion and place, place being where the product is placed within the market.
Bibliography
Buttle, F. (2009) Customer Relationship Management Concepts & Technolgies, 2nd edition, Oxford: Elsevier.
Doyle, P. (2006) Marketing Management & Stratergy, 4th edition, Essex: Prentice Hall.
Egan, J. (2008) Relationship Marketing, 3rd edition, Essex: Pearson Education.
Gummesson, E. (2008) Total Relationship Marketing, 2nd edition, Oxford: Reed Educational.
Leader, W.G. (1994) Fundamentals Of Marketing, 2nd edition, Cheltenham: Hutchinson.