Have you ever heard (or used) the excuse, "Our competitors are hammering us on price. That's why we're losing business."?
It's a convenient default that puts the blame on someone else. But the truth is, most clients 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 be looking for fast food. As you know, clients buy based on overall perceived value. The question, then, is: What do today's clients value, to such a degree they will willingly pay a premium? The answers may surprise you.
What customers really want
Having worked with more than 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 overrated.
Today's consumers 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 e-mails or posts on their portable devices are worth their attention. So when it comes to buying something, the last thing people 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, interpret those options based on their individual needs and direct them to a maximum of three choices. In other words, for complex purchases, clients 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 work with you. In their 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 service or quality. Unless you're offering something that provides a different (as opposed to better) way to achieve an outcome, consumers often stick with the devil they know.
That brings us to how you communicate your uniqueness. After listening to the client's specific needs, describe to them their conventional options. Then explain that given their unique needs, conventional approaches won't achieve the desired outcome. Then reveal how you are bringing a different type of solution; one that addresses their unique needs while avoiding undesirable consequences (think: what do you offer that travellers can't get when booking direct with suppliers). If done effectively, the client will see you as significantly different and price becomes less relevant.
The bottom line
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 clients really want is greater overall value. To boost your profits and market share, could it be time for a tune-up of your team's customer communications skills in order to communicate said value effectively?
This article is based on the bestselling book, Influence with Ease by Hall of Fame motivational speaker, Jeff Mowatt. To obtain your own copy of his book or to inquire about engaging Jeff for your team, visit www.jeffmowatt.com.