Question: When does standardizing your services have the potential to actually hurt your business?Answer: When those standardized products no longer meet the needs of your best customers.
Recently, one of my favorite companies decided to standardize their programs. As a result, I am now considering other alternatives for the first time in 10 years. While I understand the reasons for standardization, this experience has led me to question the relationship between standardized products and customer experience (particularly of best customers).
My health club, Lifetime Fitness
, has developed three standard group training programs, targeted at meeting needs of different member segments. Each program uses different equipment and different exercises. The needs range from weight loss all the way to "extreme" fitness. A different program for each type of need.
I completely understand the reason for such standardization – members need to be able to switch from class to class and club to club without feeling lost, and the organization needs to make sure that the programs all achieve consistent goals using consistent methodology. Makes sense to me.
The problem is that my early morning group has become accustomed to a trainer who varies the program based on what he perceives the group needs on any given day. The program is truly customized, and he is even willing to make changes in the program in the middle of a session if he sees needs that aren't being addressed or issues in alignment or posture. Our needs are not standard training or extreme fitness, but something in the middle. Imagine personal training in a group setting – that is what we have been getting.
Add into the picture that I am a best customer because my family and I use nearly all of the features of the club. I am sure that there are people who spend more on their health clubs and I do; I just haven't met them yet. And we belong to the highest priced club in the chain as well.
So there's the challenge -- Standardize and achieve consistency, or customize and meet the needs of a small group of best customers.
How do you balance the needs of the many with the needs of the few (as Mr. Spock once said on Star Trek)?
Here are three principles that companies can use to build product/service plans that can be scaled and meet the needs of best customers at the same time:
- Build your programs out from your best customer's needs. Remember, your best customers contribute a higher percentage of revenue and profit, as well as refer prospects who are the most like them. Essentially, they are the brand. Treat them appropriately and make sure to meet their needs.
- Structure cost/benefits appropriately. Provide customers the ability to self-select into each group based on their needs, their perceived value in the service and their willingness to pay. If the programs are distinct in their needs and benefits, and if those differences are explained clearly, then the transition can go smoothly.
- Communicate with best customers personally and consistently. That is where Lifetime Fitness has not yet succeeded. This change was implemented "behind the scenes" and members only found out from other members. This approach has led to many dissatisfied members and a sense that the company is going to implement whatever they want without asking or even informing their customers. Specifically, I sent two emails to the head of group fitness at our club and never heard back, even when I asked her for a response I could include in this post. There has to be another way.
Every company has to make decisions to standardize programs in order to create efficiencies. Companies that succeed in making such a transition begin with their values, with their core beliefs and their core customers in alignment, in order to build that path.
Those that fail treat their best customers as commodities, which lead those customers to start looking for alternatives, perhaps for the first time. That's what happend to me. I begin at a new fitness center on Tuesday.