The New Strategy for Lifetime Loyalty: Balancing 'Products' and 'Services'
Grow Your Business, Not Your Inbox
Successful organizations refuse to be pigeonholed. That's why companies like Airbnb are offering increasingly unique, valuable services and products. What was once simply an affordable hospitality service is now the source for expansive, customizable travel experiences.
Airbnb straddled the line between "product" and "service" to improve its growth plan. It took what could have remained a simple platform for booking accommodations and surrounded it with value-added services to benefit the consumer.
Deciding when and how -- and whether -- to expand entails a constant balancing act for companies in any industry, from banking to insurance to retail. But Airbnb succeeded because it didn't fragment what it offered to build out a competitive features list; it focused on providing additional value for its customers based on their core needs.
Relationships over categorization
Of course, Airbnb's success demonstrates how arbitrary it can be for a company to choose between the labels "product" and "service." A company's triumph in the modern "system" era depends more on customers' experiences than how that company presents its brand. Consumers, then, shouldn't have to decide between the "what" and the "how" of a brand: An engaging, interactive relationship is what's needed to make customers feel that they're a part of the organization.
Nike, for instance, doesn't limit itself to making great running shoes and activewear. The company's Nike Plus software strengthens customer relationships through digital fitness tips and workout challenges. This way, Nike keeps customers involved without bombarding them with unwanted advertisements; it leverages value-added services to create more loyal customers.
These exercise apps from Nike, though, don't distract from its footwear. Instead, the company implemented a valuable service that complements its core product and creates a virtuous cycle. After all, the more customers are motivated, the more time they'll devote to running, and the more miles they put on their shoes, the sooner they'll need to replace them.
Other brands might see a lesson here: They need to be less concerned about the "products vs. services" debate and instead focus on combining the two.
Based on my own experience working with consumer brands, businesses of every kind can use the following strategies to provide memorable, differentiating customer experiences without losing track of their primary brand objectives.
1. Understand the customer's daily life.
In some ways, a company's product is its greatest resource. That said, focusing solely on the product and differentiating it from the competition is no longer enough, as these actions ignore the customer's individual needs and the fact that his or her experience itself can make or break customer loyalty.
Rather than replicate another brand's version of the same item, companies should consider how what they're selling fits into the target customer's daily life.
For example, cosmetics giant Sephora surrounds its products with value-added services, including appointments, product selection assistance and how-tos that are facilitated by modern technology. Sephora even offers Visual Artist, an augmented reality service that's available in select stores and through its app. Customers can try on products virtually and walk through tutorials to learn how to accomplish specific makeup looks. All of this makes the customer experience more accessible, convenient and engaging -- which is key for making Sephora's or any company's brand a part of customers' daily lives.
2. Innovate on products and value adds.
Once you've identified how your products are used by customers, bring those insights back into the company and assess how they can be used in product development and experience creation. According to Salesforce Research, 56 percent of consumers surveyed said they were most loyal to businesses they perceived to be innovative. So, entrepreneurs and business owners can't afford to innovate sparingly.
With heavy-hitters such as Nike constantly raising the bar, others have to work hard to keep up and stay in the game. Clayton Christensen's classic on innovation, Competing Against Luck, describes the Jobs to Be Done methodology which can be used when approaching this challenge, to reduce risk and increase consistency.
There's more pressure than ever to integrate creative solutions into both products and services, to give customers something new that has meaningful value. So, use every resource you have at your disposal to meet those high expectations and constantly innovate to provide greater value.
3. Consider creating new value for customers.
Sometimes, the only way to know what consumers want is to provide something they haven't asked for. Obviously, adapting to their personal challenges is essential to any innovation. But offering something just outside the current product's direct value could generate additional ideas neither the company nor the customer ever considered before.
Just look at PepsiCo. The company's relatively new brand Drinkfinity delivers flavor pods to customers so they can craft healthy drinks. It's doubtful that a survey expressed a need for an online-only, low-sugar, self-service drink brand. But because the product strikes a balance between consumers' current interests and something new, it captures people's attention.
Overall, don't be pigeonholed into adhering to a limited business model. Take a page from the above successful brands and balance your own products and services to create a compelling brand experience that allows you to stay true to your primary brand objectives. Your customers will thank you with their loyalty.