I introduced the concept of order winners and order qualifiers in my article on key success factors and now I want to delve into this important topic in more detail. Show
How Customers Chose To Buy Or At Least Rationalise Their Purchase Decisions – Order Winners, Orders Qualifiers & Customer ValueCustomers make their purchasing decision emotionally and logically on a perception of customer value for money.The unconscious mind communicates the decision to the conscious mind at lightning speed and leaves the conscious mind to look for the logical reasons to back up the purchase decision. These rational decisions are based on customer value attributes like performance, availability, price and attractiveness of design which reflect both the needs and wants of the customer and his underlying motivations. For example, many expensive cars are bought for prestige because of the desire of the buyer to feel good about themselves, to show off their success to others and to look and feel different. These customer value attributes fall into two major categories – order winners and order qualifiers. Order winners provide reasons why customers should choose your business, product or service. In contrast, failure to meet the minimum standards required on the order qualifier attributes will provide reasons why customers will reject or ignore your business, product or service. The Background To Order Winners And Order QualifiersI first encountered the phrases “order winners” and “order qualifiers” when I read a book about manufacturing / operations strategy in the early 1990s. From memory, I think it was a small book by Terry Hill which appears to be out of print. sadly I can’t find it in my library to check. It fired up my imagination because I hadn’t thought about purchase decisions in these terms – what moves you towards buying and what pushes you away. Here are formal definitions come from the APICS Dictionery Order winners are “those competitive characteristics that cause a firm’s customers to choose that firm’s goods and services over those of its competitors. Order winners can be considered to be competitive advantages for the firm. Order winners usually focus on one rarely more than two) of the following strategic initiatives: price/cost, quality, delivery speed, delivery reliability, product design, flexibility, after-market service, and image.” (APICS Dictionary 2008). Order qualifiers are “those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace.” (APICS Dictionary 2008) Isn’t This The Same Idea As Hygiene Factors and Motivators?The idea of order winners and qualifiers comes from Hertzberg’s two factor motivation theory where he distinguished between hygiene factors and motivators. In the management of employees, this theory recognises that different factors lead to satisfaction and dissatisfaction. For example, a boss who is a bully causes demotivation to the employees bullied but a change in manager, which will take away the dissatisfaction doesn’t automatically create satisfaction. Cliff Bowman and David Faulkner in their excellent book Competitive and Corporate Strategy split customer perceived use value into hygiene value and motivator value and explicitly recognises the link with the Hertzberg two factor theory for buying. “Hygiene value refers to those elements of the product or service that all competitors offer. These are the standard order qualifying product or service aspects that every firm has to provide just to be a credible player in the game.” (page 4 of Competitive and Corporate Strategy) They go on to say… “In order to win some customers, the firm needs to offer motivator value. These dimensions of perceived use value are not generally offered, and they would tend to be unique to a particular firm. These motivator values excite customers, and are the source of differentiation.” (page 4/5) Bowman and Faulkner then go on to make some interesting points about order winners / motivators and order qualifiers / hygiene factors:
This Is Similar To The Kano ModelProfessor Noriaki Kano developed another model of customer satisfaction in the 1980s which was adopted by the total quality management movement in the 1990s. The terms vary based on the translation but this model recognises three different levels of customer value attributes:
Why You Need To Recognise The Difference Between Order Winning And Order Qualifying Customer Value AttributesThere is continual pressure to improve your business but to avoid becoming what Professor Michael Porter calls stuck in the middle . This refers to uncertainty in your competitive strategy between wanting to be different and have the lowest costs. Only in exceptional circumstances can you have both and normally, you need to be very clear on how you will focus your improvement efforts.
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