Value is more important than price
I hear so often people and businesses saying that they had to reduce their prices in order to make more sales, and that customers are fickle and buy exclusively on price.
Yet those same people don't drive around in the cheapest car on the market, don't do their shopping in the cheapest supermarket, don't go on holiday to the cheapest destination, don't buy the cheapest furniture for their house, don't eat the cheapest food when they go out, and don't buy the cheapest presents for their loved ones!
And they still say that their customers are totally different to them and buy only on price!
Customers buy on the ‘value’, not on the ‘price’.
So, what is value?
I think the simplest way to answer this question is mathematically:
Value is ‘price’ multiplied by ‘experience’.
So, what is experience?
- Experience is subjective for each person (otherwise the world would be a very boring place!), and is made up of a mixture of quality, and availability, and emotional engagement.
These are all the ingredients.
All you need to do is mix them in the right way: and the only way to do this is to get close to your customer to find out what suits them best.
When you've done this, the price becomes very much a secondary consideration.
- if you’re feeling you ‘have to trade on price’, then start looking at your ‘customer experience’ (start with feedback … done properly it never lies) … with the aim of improving it (customers who buy elsewhere on price are telling you that your delivered experience is less than ‘great’)
- if you deliver a ‘great’ experience, make sure you charge a fair price for it (and keep listening to customer feedback to make sure your experience continues to be a cut above the rest), but don’t be too expensive (unless this is your ‘brand’) as there is cut throat competition out there very keen on taking your market away from you
This has been why value is more important than price.
Guy is the founder and MD of ‘Sales through Service’ and ‘Investors in Feedback’, which coaches, trains, audits and accredits customer experience, reputation and referral systems for Organisations of all types in the UK and Europe. He is the Author of 3 books of the subject of Customer Experience Systems that produce continual and consistent...