Value proposition is one of those subtle and nuanced things that drives successes and failures in the marketplace. Businesses go broke because they don’t do a good job with value proposition. Likewise, businesses who do provide value proposition – or what the customers want – do well.
It’s subtle and nuanced, because very often, even the businesses don’t know exactly why their customers like them or not. Sometimes the customers can’t even articulate it very well, or they may give you one of the five real reasons why they perceive more value from one business over another.
In my home town, I often choose a gas station that I favor less because it’s in a safer and easier to access location for me. That’s a case where convenience and safety wins out over a better ran business, for me.
The Thanksgiving Menu/Bathroom Policy at Latte Land (written about in the previous post) highlighted this idea of value proposition with me. The managers of Latte Land mistook good coffee (which they have very good coffee) as the only part of the value proposition for their customers. But, many customers view it as a package deal. I buy coffee, I get to use your restroom. Or, as the woman behind us asked, “They want me to pay more to fill me up, but then not give us a place to empty out?”
It’s at extreme conditions, like those of Thanksgiving evening in Latte Land, where the truth of value proposition comes out. That’s when managers should listen. For many people, part of the value proposition of buying coffee is getting to use the restroom at the place. A customer may never say this in a marketing focus group or survey. It’s so basic that most people don’t think about it. Using the coffee shops restroom might not be a service they always use, but they feel that using it is included in the purchase price. We assume it, just like assume people will wear clothes in public. And, by closing their restroom down when some people needed it most, it was a nearly equal to someone not wearing clothes in public. It was viewed as an over reach by customers.
When Latte Land raised prices and removed the use of the bathroom, the truth came out. Customers view part of the value proposition as making sure that customers have a place to empty their bladders. As I previously recommended, they could have done that by simply directing customers to the event facitlities down the street. It wouldn’t have been completely satisfactory to everyone, but it would have been better than what they did.