What happens when a customer or client tells you that your product/service is unreasonably price or is too expensive? Do you lower your price to discount or do you build more value in what you are selling? If you’re thinking of the latter, you are correct. There is a time and place for discounts, incentivizing the bundling of products and services is one of them. Giving free shipping for X amount of money spent or an additional “free” item for a certain amount of money spent. However, for single use products and one time services, you should never be afraid of this objection when your customer is telling you that your product/service is “too much.”
There is a tremendous difference in selling what something costs versus selling your value. Building a brand is expensive, and watering down your products/services makes you look like a cheap commodity.
“Value” is all the things you add that can’t quantified with a price tag. When a potential customer or client compares your company to another, there are truly only four reasons people buy a product or service over the other.
- Pain in the present: They’re experiencing a problem and need it fixed immediately.
- Pain in the future: They’re anticipating a problem and want to start planning for it now.
- Pleasure in the present: They’re looking for something to fulfill an immediate need or desire.
- Pleasure in the future: They want to invest now to reap the rewards later.
Knowing this, you can start to differentiate yourself from your competitors. For pain in the present, be faster to resolve their issues or offer quicker shipping. Pain in the future allows you to set up a plan, and with constant follow up – you can make sure that you get an understanding of your client and they will appreciate the continual effort in order to help them. Pleasure in the present is the same as pain in the present, present your product faster or have a service that gives them immediate satisfaction. Pleasure in the future allows for customers to invest in you, so if they buy a service now, they can reap the rewards of your service that will most likely be more expensive in the following months.
Differentiating yourself also includes not sounding like your competitors. Make up your own terminology and clearer examples to make yourself sound different and unique.
Secondly, create a list of questions that you can ask, up to ten questions can be enough. If you ask better questions – you allow for your client to believe that you are more knowledgeable than the rest.
Finally, listen, listen, listen. Mute your phone and just listen to whatever the client has to say and write down bullet points for their own pain points. This builds more honesty and trust for your brand.
Here’s a script we have regarding when a potential client or customers asks you : “I can get your product or service from somewhere else. Why should I work with you?”
You don’t have to say this answer verbatim, but make it your own style to be more unique.
“That’s a great question. But depending on what you’re looking for from a new provider, and depending on your relationship with competitor X, maybe it makes sense that you do nothing and stay with that competitor. Can I make a suggestion? Let me ask you a few very straightforward, tough questions about what you are looking for in a supplier, what challenges you’ve had over the years, and then we can figure out together whether I truly add value. And if we decide together there’s a good fit, then you and I could spend the last five minutes figuring out where we might get started on a business relationship. Does that sound OK?”
We are not racing towards the bottom here. If competitors are slashing prices, and if it cuts too much into your margins, you must answer with a firm “no.” Being a “yes” person to everything a customer says, especially in 2020, degrades and waters down your brand. Know your worth, understand what you are actually selling, and most of all – be able to communicate effectively that your value puts your cost into perspective.
Give, Give, Give
Now that we have spoken about how you can deliver value towards your customers, let’s talk about a few steps into having more Customer Value.
Step 1: Understand what drives value for your customers
- Similar to when you interviewed for your buyers personas, create surveys and talk to your customers. Write down their actions and reactions. Research and capture data on what is important to your customer base and the opportunities for you to help them.
Step 2: Your Value Proposition
- Think about this, what value does your product or service create for your clients? As we spoke about earlier, what does it cost them for your product or service? This includes how much of their time they have to devote to buying or using your product/service.
Step 3: Discover which customer segments you can create more value for, relative to competitors.
- Different customers have varying perceptions of your value relative to your competitors.
- For example, based on where they live (geographic proximity) a product or service’s attributes may be particularly attractive to certain customer segments.
Step 4: Win-win Pricing
- As we spoke about earlier, customers that perceive a lot of value in your offering are usually willing to pay more for a job that is done in earnest. Unsatisfied customers will leave, even at a lower price.
- Set a firm price that makes it clear to your potential clients and customers are receiving value for great work, but also maximizes your profits as well.
Step 5: Focus investments on your MVCs
- Allocate more of your sales force and marketing dollars towards the customer segments that you can best service and provide with the greatest value.
- Afterwards, allocate your growth capital toward new products and services that serve your MVCs (Most Valuable Customers/Clients) or to attract more customers that are similar to your ideal buyer personas.
Giving is always better than receiving (although receiving is a very close second). These steps will not only allow you to exponentially grow your business, but to make the best use of your time and focus.