Empathic Pricing Helps Consumers Cope

By Jeri Denniston, Chief Marketing Strategist, Denner Group International  March 20, 2014

Takeaways: Latin American consumers are tired of just getting discounts. They want to know that companies understand and care about the challenges they face. The trends in these countries are applicable globally.

Latin American consumers (in Central and South America) are feeling the pain of economic realities in their countries caused by traffic congestion, diet, work-life stress. A new trend reported by trendwatching.com is Empathic Pricing.

Consumers are tired of just getting discounts. They are choosing brands which help address their pain points with alternative pricing (Empathic Pricing). According to Edelman Brandshare research (October 2013), “87% of Brazilians value brands that help them achieve their goals, and 8 out of 10 consumers say they would purchase from a company that supports good causes and has fair prices, rather than just offering discounts.”

Consumers are tired of just getting discounts. They want to know that companies recognize and care about the pain they are experiencing – and offer assistance in dealing with it. Below are some creative examples. How might you implement something similar in your organization to win over more customers? Would any of these ideas make sense for you?

Pain:  São Paulo – to ease traffic congestion between 5 and 8 pm on central roads, the government instituted a policy that only allows cars with certain license plates on the roads during those times. That means those who have to wrong license plates must wait until after 8 pm to head home from work.
Empathic Price idea: The PlayArte movie theater offered a discount on tickets between 5 and 7 pm to drivers affected by the government initiative.

Pain: 72% of Chileans are trying to lose weight but they don’t have time in their day to fit in exercise.
Empathic Price idea: Coca Cola outfitted a taxi with bicycle pedals as part of the Movimiento es Felicidad campaign (Movement is Happiness). Passengers that use the pedals to exercise while they ride earned a fare discount.

Pain: For Brazilians armed robbery when leaving a restaurant is a real threat because robbers assume they and the restaurants will be holding cash.
Empathic Price idea: The Twister Pub in Rio de Janeiro started offering a 5% discount to patrons who paid with credit cards instead of cash, figuring it would reduce the robbery threat once robbers realized patrons weren’t carrying cash. The Pub’s monthly revenue increased 15%.  

Pain: Growing old is painful. Period!
Empathic Price idea: A Venezuela-based optician launched a 3-month promotion offering discounts relative to the age of the customer – 55% off for those age 55; 70% off for those age 70, etc.

Pain: Brazilian summers can be glorious – or too hot. When it’s too hot, getting cool is the main focus.
Empathic Price idea:  a Brazilian etailer offered daily discounts on summer wear, air conditioners, and other “cooler” items equivalent to the high temperature of the day.

While these are examples of Latin American trends that brands are stepping up to address, they have applications globally. The keys are to recognize the consumer pain points occurring in your own area, and think of creative ways to address them. Get personal with your customers. Ask them for input, and once you start down this path, don’t be surprised if they turn to you again when they experience yet another pain point.

Make Strategic Management a Game

By Jeri T Denniston, Chief Marketing Strategist, Denner Group International    11-8-2012

Takeaways: Think of fun, creative ways to engage your staff. Turn your strategic management system into a game everyone wants to play. It’s critical that the boss both communicate AND model the behavior he/she expects of everyone else.

The EMyth Revisted: strategic management as a gameIn August, I related a story Michael Gerber told in his book, The E-Myth, which described the unique experience he had (and continues to have) at the Venetia Hotel in the Redwoods outside San Francisco.

You may recall, the hotel went out of their way to make his experience memorable by anticipating his needs, including a brandy waiting for him before he turned in for the night, the brand of coffee he likes, and the newspaper he prefers to read in the morning. They had installed a strategic management system that anyone could follow.

Make Your Strategic Management System A Game

The question was “How did the hotel get the staff to actually follow the system?”  This is key. Many companies have policies and “systems” they’ve instituted but no one follows them. First, the owner took the business seriously – he viewed the hotel as a reflection of his personal values and who he was. Thus, if a staff person didn’t take their job seriously, it reflected on the entire operation.

He told the manager when he was hired, “The work we do is a reflection of who we are. If we do sloppy work, it’s because we’re sloppy inside. If we’re late at it, it’s because we’re late inside. If we’re bored by it, it’s because we’re bored with ourselves, not the work. How we do our work becomes a mirror of who and how we are inside.”

He continued, “Work is only an idea before a person does it. But the moment a person does the work, the impact of the work on the world becomes a reflection of that idea – the idea behind the work – as well as the person doing it. In the process, the work you do becomes you, and you become the force that breaths life in to the idea.”

The point being made is that the boss, the owner, took the time to explain the purpose behind the work that each person does in the hotel, broken down into three thoughts:

1 – the customer is not always right but whether or not he is, it is our job to make him feel that way.

2 – everyone who works here is expected to work toward being the best they can possibly be at the tasks he or she is accountable for.

3 – the business is a place where everything we know how to do is tested by what we don’t know how to do, and that the conflict between the two is what creates growth and meaning.

Define Structure. Make it Fun.

The boss took the time to create a clearly defined strategic management structure based on how to behave in the world – a values system – through which the staff can test themselves and be tested. For all intents and purposes, he made this People Strategy a game.

The game symbolizes the idea the owner has about the world and his/or her contribution to that idea. The degree to which your staff “buy into” playing the game depends entirely on how well you communicate AND EXEMPLIFY your idea, your value system to them. You do this through new staff orientations, an Operations Manual, your organization chart, job descriptions, and written Performance Appraisals.

But most of all the owner or “boss” communicates this through his or her own performance and actions. It has to be seen and experienced before the staff will voluntarily perform in a similar manner.

In the next article I’ll share Gerber’s Rules of the Game. In the meantime, think about how you model your expectations of your own staff. Are you living and acting the values and behavior you expect of them?

Customer Service Explained: Match, Mint, Coffee

By Jeri T Denniston, Chief Marketing Strategist, Denner Group International   8-24-2012

Takeaways: Michael Gerber relates an example about customer service and strategic management – focused on pleasing the customer. Ask questions and listen to the customer. Then take action to serve the customer and anticipate his/her needs.

 Customer service explaqined: Michael GerberI’ve been re-reading The E-Myth by Michael E. Gerber.  In the chapter about management strategy, he describes an experience he had with a boutique hotel in the California redwoods country. It’s a message about customer service and management systems.

Here’s a brief synopsis:
He stops for the night after a long drive on his way to San Francisco. As he walks into the lobby he describes how inviting it looks – large, comfortable over-stuffed sofa; a table as you enter holds a large, enticing bowl of fresh fruit ; a warm fire is blazing in the fireplace; the décor expertly blends together to provide a welcoming feeling of home and warmth.

The woman at the front desk wore complimentary colors and style, a matching ribbon in her hair, and a badge that showed the hotel logo and colors. She welcomed him, checked him in, and within 3 minutes the bellboy was ushering him to his room. Amazing!

His room was equally tasteful  –“ understated opulence” is how he described it – with a four-poster king size bed taking center stage. He noticed the fireplace was prepared and ready to light, thinking that would be nice after dinner. When he checked in, he asked about restaurants and the desk clerk suggested one on the hill a short walk away. She made reservations for him as he was being shown his room.

Customer Service: Learn the Customer’s Interests

There was a well-lit path between the hotel and restaurant. The restaurant was crowded with several people waiting when he arrived, but when he announced his name, he was immediately shown to a table. The meal was “delightful” and the service excellent, encouraging him to linger over a glass of after-dinner brandy.

As he returned to his room he noticed the lights on the path had been turned up to make it more navigable after dark. He was thinking about lighting the fire and having a brandy before turning in. When he got to his room, the bed was turned down, a mint was on each pillow, the fire was crackling in the hearth, and a glass of brandy was beside the bed with a card that read, “Welcome to your first stay at Venetia. I hope it has been enjoyable. If there is anything I can do for you, Day or Night, please don’t hesitate to call. Kathi.”

The next morning he awoke to gurgling in the bathroom and when he arose to investigate, the coffee maker was brewing his favorite brand of coffee. A card read “Your brand of coffee. Enjoy! K” And it was HIS brand of coffee. He heard a knock at the front door, and when he opened it no one was there. On the doorstep was HIS newspaper, the New York Times.

How did they know?

When he checked in, the desk clerk asked him what his favorite newspaper was. He gave it no thought. At the restaurant, the server asked what his favorite coffee was when he ordered coffee after dinner. The server probably also noticed he enjoyed a glass of brandy after his meal. They asked, noticed and listened. And they communicated between the hotel and the restaurant. This experience has been repeated every time he visits that hotel.

What did they do differently that makes this possible? They had developed a system and written it down in an Operations Manual so anyone could replicate it regardless of who was in charge. It was a series of color-coded checklists for each person at the hotel.  Each support person was responsible for eight rooms. When they arrived every morning, they had eight packages of checklists in their mailbox- one for each room they were taking care of. As they completed each one, they signed off on the package.  To sign off and not complete the work was grounds for dismissal.

The hotel had a strategic management system in place that could easily be followed by anyone.

But how did they get their people to use it? That’s the subject of the next article.