We all know in today’s market, businesses thrive to acquire best comments, feedback from customers if they are serious about what they do. Even if it’s a business without online presence, good word-of-mouth publicity about the business is crucial for its growth. But it’s quite an interesting phenomenon that we can see, for the same product from the same seller (for instance Amazon), different people give different ratings and reviews. I often felt like it’s all not true. People are being paid to write good reviews for a bad product. Well in reality, yes people get paid or favored by some businesses for writing unreal things. But not in all cases or majority of cases. Honest customer feedback can be uneven, until and unless the product is too good or too bad.
A generic answer to why is: “It’s because, people are different and they have different opinions”. In this blog post we are going to see the “why” in depth and I hope that my tips would help you have a better satisfaction after you order something online or buy pair of shoe from a branded outlet.
Value = Benefit / Cost
If you have ever followed a management blog, this can be pretty familiar to you. Else it’s worth understanding if you are a shopper to be (again) and you care for your money.
When you are in a shopping mode, ultimately you are looking for value from the products you buy. Mathematically, you cannot write VALUE = BENEFIT / COST. Because benefit is qualitative, it cannot be quantified or measured. It varies with person. It’s what you think you have benefited by purchasing a product. And what you think is not what is felt by your spouse or friend. It doesn’t have a unit, like love. Can you imagine a unit for love? Like, “I love you 10 units”?
On the other hand Cost is quantitative says Philip Cotler in his marketing textbook which is or at least used to be the bible to most of the marketers out there. But in the same book in another page he says it’s not.
Overall cost can be combination of many costs like financial, time, effort, psychological etc. An accounting professional will tell you only about the financial cost and its categories. But in reality when you decide to purchase a product it’s not just the money involved but also your effort and time in getting that product, plus a universe of emotions that you acquire during the buying stages of that product.
So what happens when Guy Kawasaki decides to buy a watch?
I am a follower of Guy Kawasaki, not just because he was associated with one of best things that ever happened to technology industry (APPLE), but primarily because of his active involvement with entrepreneurial ecosystem in the world. It means that I have seen his talks regarding entrepreneurship at various venues (I see in YouTube).
His talk on 12 Lessons taught by Steve Jobs is much viewed video on YouTube. At 21 mins 23 seconds, Guy talks about his watch. He can pull out an antenna out of his watch which broadcasts signals which can be detected by aeroplanes. The watch is very costly but he says it’s of high value to him. It can save his life when he is off the road, skiing, sailing, when there are chances of getting lost in the middle of the adventure.
So when Guy compared the benefits that he get by buying that watch, the cost involved including the price was quite acceptable for him and he bought it. And I am sure, the watch did show time. Guy may give a 5/5 rating for the watch.
And what happens when I decide to buy a watch?
I would look for a watch that last long, a good brand and obviously shows time.Something like this one. The watch that Guy bought is not an option for me for many reasons. But I really liked the brand and imagine I bought it paying a huge price. I know that it has an antenna which can send signals and since I am excited about smart objects I made decision to buy it.
I would brag about it to some of my friends but trust me in some days I am going to think I have wasted my money on that product.
Because the benefits the watch offer to me is not relevant to me. I don’t go skiing, travelling, sailing or be in any sort of adventure sport wherein there may be a chance of getting lost. But you know what, we’d never know.
And till that day, I’m going to be an unsatisfied customer and I may put a review on the watch – “Grossly overpriced”, a rating of 2/5.
What is of value to Guy is NOT to me?
I would think that someone paid Guy to give a 5/5 rating for the product (Well, if I didn’t know who Guy Kawasaki was).
What you should do when you decide to buy anything online or from a store?
You have to make your shopping decision based on the following points. They may seem pretty obvious to you and naturally during shopping you think of these things. But I recommend you to consciously follow these points than relying on what brain tells you naturally. Trust me, there’s going to be a lot of difference on what you buy (positively).
- Read the product description; understand the functionalities, utilities it offer.
- Brand value is important because it is positively correlated to quality (in most cases).
- Don’t count number of utilities but ask, is there the one thing that you are looking for? (Do you really need 41 mega pixel camera built in smart phone?)
- Understand the associated costs. (1. Price of the product 2. Time to get the product 3. The effort that you have to put in to get the product 4. How you feel about the shopping process? Is the payment process secure? Is the return policy acceptable to you? Can the delivery service be trusted?)
You have to identify the benefits and cost as perceived by you. Like I said in the introduction you cannot divide benefits with cost, but compare them. And when you find a product which offers benefits for which you are ready to pay the combined costs, go for it.
It’s very important to look at customer feedback and ratings, but always remember in shopping you have to put yourself first than your peers or other customers (you don’t know them and they can be as different as Guy and me) because it’s your money.