Gold Magazine April - May 2013, Issue 25 | Page 47

opinion

Why Great Service
Just Isn’t Good Enough
Value has to exist in the eyes of the customer
for your prices to be deemed acceptable

A

constant problem
in business today
is being able to
justify a price
and not have
to discount it
in order to stay
away from a race
to the bottom.
Ultimately, it’s all
about proving the value of what you’re offering.
The challenge is to come up with something
that is really perceived as valuable by the
customer.
I have heard people tell me so many times that
they want to charge premium prices because
they have ‘great product quality’ or ‘exceptional
customer service’. That sounds good but sorry,
it’s just not going to work. The problem is
that ‘great quality’ and ‘exceptional service’
are concepts, not tangible facts. Nobody
would argue that they are not nice to have but,
described in those terms, they are certainly not
essential and by extension, therefore, not worth
paying a premium for.
Value has to exist in the eyes of the customer.
Here is an example I came across just this
week: a printing company is offering a threeyear warranty on its promotional banners and
the owners believe that this justifies a price
premium. But when you ask their customers
how they use the banners, they typically have a
maximum life of three months before the next
promotion comes along and renders the old
banners outdated and on their way to the landfill.
So what value can a three-year warranty possibly
have to the customer?
This is a great example of value being in the mind
of the supplier, not the customer. It is easy to
come up with an internal perception of value but
much harder to come up with the customer’s
perception. If you want to avoid having to

Consumers
are three times
more likely to
buy in order to
solve a problem
rather than to
gain a benefit

By Mike
McCormac

discount, however, that is what you have to do.
So how do you find out what your customers
value? And how can you build that into what you
do day-by-day in order to sell more and avoid the
discounting trap? It sounds simple but, actually,
all you have to do is ask them.
Keep in mind that people generally buy things to
solve problems they face – it’s a proven fact that
consumers are three times more likely to buy in
order to solve a problem rather than to gain a
benefit. So the obvious question is: What is the
problem your customers have, to which your
products and services are the solution? And the
obvious next question is this: Is there any part of
the customer’s problem which your products and
services don’t solve? That can be a very productive
area to look at, for ways of adding to the scope of
the products and services you sell so as to increase
their value to your customers – and, of course, to
you.
Another way of thinking about this is to attach a
financial impact to the customer’s problem. You
can use that amount to determine the value –
and, therefore, the price – that your solution will
command in the customer’s mind.
M