Part Three: A recipe for value
Column by JAY PERRY
In this issue we will round out our conversation on the third of the three fundamentals to ensure the customer transaction is going to end on a good note. This is price.
Most people make the mistake of thinking this is the most important of the three. Recall the other two principles we’ve discussed are quality that matches expectations and timeliness of delivery. What we’re talking about today in reality remains a concern in less than 50 percent of all transactions. You see, people buy value.
Value is a word that has been shaped to mean best pricing. In a way, it is—but you must remember that people will pay more for a higher quality if it is what they desire and will pay more for a timeframe that fits their expectations or needs. It is the combination of all three that is the true value proposition. If we have taken the advice in my previous articles and patiently worked with the customer to have them sufficiently understand our processes and the level of quality we are about to deliver, then we can probe about the price they are willing to pay for those levels of service. Blurting out the question, “What’s your budget?” too early is counterproductive, because it puts the emphasis on the price right away. The conversation must centre around quality and time prior to price.
A great way to broach this with a customer is to ask, “If I were to deliver the quality we have discussed in the timeframe under consideration, what would be your budget?” The insertion of that tiny word “if” is extremely powerful.
In my studies with a doctor of psychology, they explained that when you use the word if, you take people to a mental space that is not restricted because it is hypothetical. In the land of the hypothetical people can use their imagination. They start to see the conclusion that you too envision. They start to expand their preconceived ideas toward price because they are now balancing price and creating a value hierarchy.
Have you ever paid more for something because you can have it now? Of course you have. Have you ever paid more for what you perceived the better quality of an item when given the choice between a cheaper one? Of course you have—and so have your customers. That’s why we must take time ourselves and to teach our team members to be consultative in their approach to customers.
When we have meaningful conversations that probe an expectation and match it with information that proves we can satisfy those expectations, that’s when we’ve struck the value proposition for the customer. That’s what they purchase.
Think about the incidents when you have been disappointed as a customer when what quality you received was not what you thought you were getting or that it took longer than you expected to have something arrive. So, work on these three things with your customers, establishing the value you offer in the whole package so you can stay the one who’s driving!