Do your team members ever give you this excuse when your company loses a customer, “Our competitors are hammering us on price. That’s why we’re losing business.” It’s a convenient excuse that puts the blame on those nasty competitors. But the truth is, most customers don’t buy based on price alone. If that were true we’d all live in the cheapest homes, buy the cheapest vehicles, and every time we went out to eat, we’d always eat fast food. As you know, customers buy based on overall perceived value. The question becomes, what do today’s customer value – to such a degree they will willingly pay a premium? The answers may surprise you.
What customers really want
Having worked with over 400 client organizations and conducted surveys of over 11,000 of their customers, we discovered there are some 35 factors that customers consider (often subconsciously) when they decide to pay a premium. Here are two that I talk about in my training seminars and speeches.
Selection is Over Rated
Today’s customers suffer from decision fatigue. It begins first thing in the morning when they decide what to wear, which lane to drive in, and which of the hundreds of emails or posts on their portable devices are worth their attention. So when it comes to buying something, the last thing customers want is a large selection that makes choosing complicated.
What customers really want in today’s world of too much clutter is what I call A.I.D. – Analysis, Interpretation, and Direction. Customers want you to analyze the various options available for that customer, interpret those options based on the customer’s individual needs, and direct the customer to a maximum of 3 choices. In other words, for complex purchases customers don’t want to work with an order taker. What they value is a trusted advisor.
Don’t be better, be different
When it comes to discussing your offerings with potential customers, claiming your product or service is better than the competition, won’t likely motivate them to switch to you. Chances are your established competitors are not selling junk. In customers’ minds, if what they’re currently buying is reasonably good, then it’s not worth the risk and hassle of switching over to you for a slight improvement in quality. Unless you’re offering something that provides a different – as opposed to better – way to achieve an outcome, customers often stick with the devil they know.
That brings us to how you communicate your uniqueness. After listening to the customer’s specific needs, describe to them the conventional solutions to their particular problem. Then explain that given the customer’s unique needs, conventional approaches won’t achieve the desired outcome, and how they may instead create unintended negative consequences. Then reveal how you are bringing a different type of solution; one that addresses their unique needs while avoiding undesirable consequences. Now the customer sees you as significantly different and price becomes less relevant.
Trying to beat your competitors’ prices is rarely a profitable strategy; especially if you’re not a huge organization with massive economies of scale. Instead, remember that what customers really want is greater overall value. Often getting your customers to move beyond price simply means training your team members to change the way they talk with customers. To boost your profits and market share, could it be time for a tune-up of your team’s customer communications skills?