The Law of Compensation: The Game Has Been Forever Changed

Chris SnookBy Chris J. Snook, author of the recently published book, “Digital Sense,” and Closing Keynote Speaker at the upcoming TMSA Logistics Marketing & Sales Conference in June. All attendees at the conference will receive a copy of the book as part of your conference registration. This article is an excerpt from the book.

Your reality today is that your customer doesn’t care about your internal battles, political hurdles, or legacy technologies’ lack of integration into your newer cloud-based ones. She doesn’t care about your struggle to retain top talent, or your troubles creating a culture unified around core values, while continuing to hit the quarterly earnings numbers. Nor does she care why, at different touch points along the customer journey, you can’t seem to deliver the same brand promise she bought into on the front end. She could give two craps about your issues and is – like all of us – no longer loyal to a brand as much as she is loyal to the need for a solution to the problem she has in that moment. She grades you only on how you deliver against it and how consistently you can meet her evolving needs over time.

Just because you have satisfied customers doesn’t mean you have happy ones. Satisfied customers are best defined as those customers who continue to pay for the service you provide, because they have not yet found another way to live without you.

Think about that for a moment.

It makes sense but it is hardly aspirational as an offensive strategy. It merely serves as a temporary defensive one that can fool you into complacency, because it doesn’t currently violate the universal Law of Compensation. “There is a universal Law of Compensation?” you ask. Yes, there is. There are only three rules to earning the majority of the market share at any given time, as the Law of Compensation is defined:

  1. The need for what you do,
  2. Your ability to fulfill that need consistently, and
  3. How difficult or easy is it to replace you.

Satisfied customers are not secure customers in tomorrow’s marketplace, and you are vulnerable because of the false sense of security you feel as it relates to number three in this law. The reason is simple. If your customer is merely continuing to pay you because you fulfill their need consistently (taxi cabs fill the need of rented individual transport) and you are difficult to replace (2007), then once Uber/Lyft and so on get to scale (2010), your satisfied customer becomes your disruptive competitor’s happy one. Then the cycle starts all over again.

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