If the customers believe that the competing products or services are equivalent to each other then they will usually buy on price. If your product is in this category then you are at the wrong end of the food chain and you may be wise to consider a better strategy.
Customers basically buy products or services for one, or both, of two reasons; they think it will make them happy or they think it will solve a problem that they want solved. If you want to move up the food chain then it would be wise to look at these two factors in more detail.
(Please note that in the rest of the article whenever I use the term “product” I am referring to either a product or a service.)
There are two factors that need to be considered when it comes to measuring the customer’s level of happiness with their transaction.
Firstly there is the level of happiness with the product itself.
Happiness with the product is a function of how the actual experience of owning the product compares to the expected experience of owning the product. You may be supplying the greatest product in the world but if the customer expected it to do more for them than it actually does then they will be disappointed.
This is why you should never overstate your product. It is better to follow the advice of under promise and over deliver. If you are worried that you will not be able to sell your product if you under promise then the truth is that your product is not up to scratch and you should give serious thought to how you can improve it.
The second aspect of happiness is the level of happiness with the buying experience.
There are many factors that contribute to the level of happiness surrounding the buying experience. Let’s look at a few.
How difficult is it for your customer to make the purchase?
A great example of this concept is found in the home loan industry. Years ago if you wanted a home loan you had to go to the bank during business hours. One of the banks realized that this was an unhappy aspect of the buying experience and they introduced the concept of mobile lenders who traveled to the customer’s home, night or day. They were writing so much extra business from this service that the other banks had to follow suit.
How pleasant is the buying process?
If your staff are rude, grumpy, or indifferent then you are begging your clients to buy from the opposition. A good question to ask on a regular basis is how can I make the buying experience more pleasant for my customers.
An Australian dentist asked himself this exact question and then decided that he should survey his clients about what they liked and didn’t like about coming to his dental practice. He then analyzed the results and created ways to improve the customers experience. As a result he became so popular that he successfully raised his prices to the point where he now works half the days per month and earns more money that when he worked a full month.
One of his more creative additions came from solving the problem that his customers didn’t like the medical smell of the offices. He did some research and found that the smell most people like the most is the smell of cakes baking. He installed an oven in his waiting room and always has cakes baking. When the patients arrive they are offered freshly baked cakes and silver service tea and coffee. Brilliant!
How can you make your clients feel so special that you can increase your prices and retain enough business to substantially increase your bottom line profit?
Perceived Problem Solving
The second reason why people buy is that they believe your product will solve a problem they want solved.
The interesting thing about this is that the problem may not even be a problem that the customer has. They may be solving a problem that they don’t want to get. In other words they are opting for prevention before they need a cure.
Many of the people who buy the latest fashion do so for the happiness factor of feeling good about themselves and for the problem solving factor of preventing themself from being a social outcast within their group.
In reality almost all purchases have a combination of both the happiness factor and the problem solving factor, even though this is not always obvious. If you can become better at satisfying both factors then you will no longer have to sell on price. Like the dentist mentioned above, you can raise your prices and still be in strong demand.
Put some time aside to discover all the happiness and problem solving aspects relating to your product. It just may be the most profitable time you have spent this year.