Meeting - Not Exceeding - Expectations May Be OK

Edition: December 2001 - Vol 9 Number 12
Article#: 1124
Author: Mark Thill

How many of us work for companies whose mission statement includes something about ''exceeding customers' expectations?'' Seems like this has been de rigueur verbiage in management circles for the last 10 or 15 years. Here's the logic: If we focus on exceeding customers' expectations, business will follow. And it will be profitable.

But now, there's a new current of thought floating about. It says that exceeding customers' expectations is nice, but expensive. It keeps our costs up when customers are demanding that they go down. Rather, we should be focusing on meeting customers' expectations. I heard this new line of thinking expressed twice at the recent Fall Conference of the Healthcare Manufacturers Marketing Council, once by speaker Sam Bowers (see related article in this issue), and once by McKesson Medical Surgical President Fran Dirksmeier.

When I first heard Dirksmeier say McKesson will focus on meeting, not exceeding customers' expectations, I thought he misspoke, made a mistake. But when he said it a second time, I thought I was listening to heresy. What would Tom Peters say? What about all those tales we've been told about the Nordstrom clerk who takes back a customer's defective tire when Nordstrom DOESN'T EVEN SELL TIRES!

But think about it. Exceeding expectations implies that the vendor gives the buyer things the buyer didn't even know he/she wanted. The seller, of course, builds the cost of these things into the price of its product or service. Presumably, out of sheer delight with the buying experience, the customer is happy to pay the price. Meeting expectations, on the other hand, implies that the buyer knows what he/she wants, and the seller agrees to provide them at a pre-agreed-upon price. Can we assume that buyers do indeed know what they want?

Well, consider that young people are on the Net all the time, gathering information about the products they want to buy and comparing prices. They truly are informed consumers, and appear to be less dazzled by the warm and fuzzies than their parents. As Bowers puts it, ''We're moving from an age in which things are sold to one in which things are bought.'' And these are the people who will be making purchasing decisions about medical products and equipment in the future.

How should sellers respond to such an informed, no-frills, bottom-line buyer? Instead of talking about what they will provide, they have to start talking about what they won't provide. To me, this whole train of thought is an extension of activity-based costing. The seller comes to the buyer with a list of products and services, each of which is assigned a cost. The buyer then chooses the things he/she wants. The two walk away with an agreement. It's not warm, it's not fuzzy, but it works.

Now, will all your customers want to do business this way? No. But will more of your customers want to do business this way in five years than they do today? Probably.

Says Bowers, don't be afraid to play this new ballgame. Think about what you have to offer, think about what kind of a profit you're seeking, then listen to your customer. What does he/she want and how much does he/she want to pay for it? Then, let the negotiations begin.