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Customer Sacrifice

Disciplines > Marketing > Understanding Customers > Customer Sacrifice

Description | Example | Discussion | See also

Description

Customer sacrifice is the gap between what you deliver and what your customers really want.

A gap of zero means you fully deliver everything they need, with the result that they are completely satisfied.

An infinite gap means you deliver nothing that customers want, and the chance of anyone becoming your customer is very small.

Customer sacrifice gaps may be deliberate or not. Either way, a sacrifice gap is an opportunity for competitors to better satisfy your customers and hence lure them away from you.

Example

A company selling lawn mowers offers no seat adjustment for customers of different height. They do not realize the problems this cause some customers. A competitor offers seat adjustment and hence gains market share.

A microphone is comfortable for most men, but rather large and heavy for some women. The manufacturer realizes this and introduce a lighter, smaller model, hence reducing the sacrifice that women have to make to use the heavier microphone.

A service company makes customers go through a long series of phone button pressing before they reach a customer representative. This saves money but annoys customers. Another company studies this and finds the economic point where the lower sacrifice of one button-press is accepted. They hence gain share by advertising this.

Discussion

Most products and services take time and money to design. To perfectly match all customer needs would require a different offering for each customer. The challenge for product and service designers is hence to identify the range of offerings that will lead to the minimum total customer sacrifice across all customers.

Designs are often strongly influenced by reducing cost of manufacture or operation. While this is certainly important, the loss in sales that this can lead to may well be underestimated. Intelligent design takes account of both cost and revenue impacts.

To reduce sacrifice, you may be able to simply adjust current products and service. Sometimes also a completely new innovation is a better approach.

In early markets, there are often few products and high customer sacrifice gaps. As markets grow, economic segments emerge where profits may be made. To gain customers here, new products are designed to reduce the sacrifice in these segments.

Smart companies are constantly reviewing customer sacrifice and looking for the best competitive point at which to introduce sacrifice-reducing products.

See also

Inbound Marketing