This is the seventh message in the “50 Things Your Customers Wish You Knew” series.
“I don’t mind spending the money, as long as I feel I’m getting real value.”
When the economy is lousy, we start to give in to a terrible temptation.
It starts by wanting to give folks good value for their money — which is the right thing to do, always.
But we forget about “value” and start thinking only about price. That creeps into slashing our prices to the bone, racing to the bottom of the pricing scale.
And here’s the thing. Wal*Mart owns the bottom of the pricing scale. And they’re not moving to make room for you.
A race to the bottom is a race to business failure. If you don’t have the mega resources of Wal*Mart, here’s what to do instead.
Don’t chase bargain-hunters
Some people crave the absolute lowest possible price, and some crave the best value.
Leave the bargain hunters to Wal*Mart. You can’t win that customer, and you’re going to bankrupt yourself trying.
That means you have to set aside people who say things like, “I would never spend this much money on (a t-shirt, auto repair, weight loss advice, etc.)” They’re telling you loud and clear that they have no intention of ever becoming your customer. So stop trying to sell to them.
Like teaching a pig to sing, it wastes your time and annoys the pig.
Do add value
When money is tight, we all need to make sure that we’re getting the right value out of what we spend.
So think about ways you can stack on massive value, in a way that preserves your profit margins.
One of the smartest ways to do that is by adding an information or education component to your product.
For example, look at Nordstrom and their justly renowned personal shopper program.
The personal shopper service is a “free” program designed to let you get more out of your shopping experience at Nordstrom.
Now if the personal shoppers just pushed stuff at you that was expensive, the program wouldn’t work. They’d just be salespeople, of the kind you can find in any pricy department store.
But Nordstrom’s personal shoppers pay careful attention to what you like. And even better, they can give you advice about what looks good on you.
That adds tremendous value to the purchases you make from Nordstrom, because you’re buying the clothes that get you the result you want — to look thinner, younger, richer, or whatever your goals are for your appearance.
When you’re confident you’re buying the right clothes, you’ll spend a little more. Because you know you’re getting value for money.
The Willie Sutton guide to finding the right customers
Every business needs to know who their perfect customer is. How they think, what they look like, what they value, what worries or annoys them.
Willie Sutton, a notorious criminal from the 1950s, was asked by a reporter why he robbed banks. His reply was,
“Because that’s where the money is.”
If your customer profile is “starving artists,” “penny pinchers,” or “the chronically unemployed,” you’re setting yourself up for a challenge you may not be able to meet.
Item #1 of your perfect customer profile needs to be: “They have money to spend, and they’re interested in spending it on my products and services.”
That doesn’t mean every single business needs to cater to the affluent. But it might mean that you need to re-think who you’re talking to, who you’re selling to, and who you can best convert to a happy customer.
Value is the key
I’ll say it again.
Add value.
Add value.
Add value.
Become obsessed with how you can make your product work better.
Think about what you could bundle along with it to make it 100 times more valuable.
Become positively unreasonable about how to get your customers the benefits they’re craving.
The truth about this “lousy” economy is that the very best businesses are thriving.
If I’m going out to dinner, I want to be sure it’s great … so I go to the best place in town. I’m not in the mood to waste money on a so-so experience.
I’m not the only one who thinks that way. Look around and you’ll notice that the best places in town are consistently packed. While the ones who don’t obsess with value — the ones who think it’s ok to serve up mediocre food and lukewarm service — are dropping like flies.
Every business is like this. It gets worse in tougher economies, but it’s always important.
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