Columnists Don Daake and Ed Piatt

Ask the Professors Don Daake and Ed Piatt.

Editor’s note: Dr. Piatt and Dr. Daake are co-writing this article this week and offering their respective ideas on achieving excellence in any organization.

Dr. Piatt contends that diamond-level leaders reinforce the organizational culture to one of excellence by advancing the needs, wants and desires of their customers. It is easy to eschew and promulgate advertising claims of “We are the best,” and certainly one we often see, “Great prices with great service.”

However, diamond-level organizations offer expert services while simultaneously giving the customer the value proposition of obtaining the optimal value of expert advice that provides the customer with “peace of mind.”

Despite its popularity of cut-rate services for income tax preparation or discount dental services, you often get what you pay for in these situations. I recently asked my CPA why he charges so much for approximately 20 minutes to do my taxes? He replied, you are not paying for my time, instead you are paying for my expertise. The same goes for my endodontist, who recently performed an extensive root canal on one of my molars.

You are buying their expertise to give you peace of mind. These stellar professionals are experts in their fields, and you know that you are getting the ultimate professional services that are second to none. I will gladly pay for their services to obtain quality service that is beyond reproach.

Our culture’s cacophony and clamor have driven us to rely on celebrity endorsements and often misleading advertising. It is analogous to having a Mercedes car with a Yugo engine. It looks great but is certainly not what you paid for, and you often obtain disastrous results.

On the bright side, any salesperson or organization can obtain the contours of expert service. As articulated by Lee Cockerell in his book, “The Customer Rules,” he discussed how to elevate your organization to one of excellence:

  • “How can I help you?” is better than, “What can I do for you?
  • “Let me show you where it is” sounds much more helpful than “It’s over there.”
  • “It is my pleasure” is more congenial than, “Sure” or “No problem.”
  • Instead of “That’s not my responsibility,” try, “Let me get someone who knows more about that than I should.”

More than ever, our companies and leaders need to offer expert advise and a customer value proposition predicated on service and language that inspires customer confidence. The right words provide the customer a relationship based on trust, positivity, politeness and respect. Everyone can be an expert on those positive words and deeds.

Next, Don will offer some additional insights and commentary on this from the customer’s perspective.

As Ed points out, real quality, expertise and experience are worth paying for. But sometimes, based on a paid-celebrity endorsements or a company that no longer lives up to its prior reputation, “You get what you pay for” can be misleading. The growth of online e-commerce and particularly online reviews have become the great equalizer.

But even here, we have to be careful because some positive endorsements are fake, or significantly negative reviews are posted by malcontents that never can be pleased. I think the standard that works best is akin to the difference in legal terminology of beyond a reasonable doubt and the preponderance of the evidence.

If I’m looking for a product or service, rarely, if ever, will I find a perfect 5-star average rating. But if, for example, a product has 4.5 positive stars with a few bad reviews, I’m likely to go ahead with a purchase. The preponderance of the evidence is positive.

Secondly, Marketing 101 teaches us that if a consumer has virtually no other information, they accord higher quality with a higher price. Various studies on products such as wine provide evidence that consumers automatically assume a bottle priced at $25 is far superior to one priced at $10. This has been tested on many other products as well.

While many times the higher price means better quality, it can be deceptive. Some businesses, like the furniture business, may mark up their products by 100% or more. And then, with a 40% sale, they still make a sizable profit. It could be that the same product with the same quality is lower at another store’s everyday low price. So higher prices may be indicative of better quality but always do your research and price compare.

Perhaps the very best way to figure out whether a more expensive product or service is better is to get references from people you know, including your family, friends and legitimate online reviews. The caution here is always to get more than one reference because a friend of yours themselves may have been overpaying their whole life and can’t bring themselves to admit they have been taken advantage of.

A recent financial report suggested that an investor who pays a 2% annual management fee compared to low-cost mutual funds of about .1 to .2% over their lifetime will end up with 40% less in their retirement account. This is true unless the money managers can outperform the market by the extra fee they are charging. But study after study has shown this is very rare indeed.

When we put together the idea of diamond-level organizations and smart, informed consumers, we end up with a win-win situation and long-term relationships.

Dr. Edward Piatt, Ed.D., MBA, is a retired manager from the state of Illinois with 32 years of frontline leadership experience. He is an adjunct professor of business in the MBA and MOL programs at Olivet Nazarene University, and a doctoral advisor and adjunct doctoral professor at Trevecca Nazarene University. He is also an organizational/economic development consultant and lectures frequently on Emotional Intelligence (EI), organizational culture, and leadership. He can be contacted through the Daily Journal at editors@daily-journal.com or directly at epiatt@olivet.edu

Don Daake, MBA, Ph.D., holds degrees from Kansas State University, the University of Iowa, and the Florida State University. He is Professor Emeritus at Olivet Nazarene University, where he taught for 22 years. He can be contacted through the Daily Journal at editors@daily-journal.com or directly at ddaake@olivet.edu.