https://www.procfo.com.au/new-look-customer-loyalty/Price is often considered the be all and end all of all marketing and sales. BUT IS IT?
There are so many other issues involved in a purchase decision that it’s naive to think price is really a driving factor for all customers and potential customers. It is important, but it is only one item to be considered in your marketing whole, rather than the beginning and the end.
You see…we find it’s almost always the case that you the seller have a greater issue with price than your customers do.
WHAT DO YOU LOOK FOR WHEN YOU SHOP?
Just take a moment to think how many issues you consider before you purchase. To do that, think about what you’re looking for when you shop for something – a car, a household item, clothing, computer equipment, or virtually any item.
First and foremost, you’re probably looking for something that solves a need or a problem you might have.
Secondly, something that offers good quality could be important too? Ideally, you’d probably want to buy from a business where you receive excellent service.
Value for money and price could be important, too. Depending on what you’re looking for, you might need advice from experienced personnel, or you might want warranties on your purchase. You might consider delivery times or 24-hour service are important to you.
These are just some of the items that could be important to you as a customer.
Most people never shop on price alone.
Let’s look at the results of a very interesting survey. This survey confirms many other surveys taken around the world. It looks at why customers don’t buy from you, or why they leave you and move to your competitor.
People were asked this question:
“Why do you choose not to deal with a business or to leave a business and go to a competitor?”
The results were outstanding:
Relationship at a high level 9%
Perceived indifference 68%
Just to look at two of these reasons.
“Perceived indifference” is literally that. Your customers or potential customers feel you or your team members are indifferent towards them. Indifferent meaning they’re given the impression you couldn’t care less if they purchased from you or not.
This means nearly 7 out of 10 inquiries walk away from your business (you don’t sell to them) because they feel you or your business isn’t interested in selling to them.
Compare that with the next biggest group being the 15% who don’t buy from you because your product does not fit with their requirements or your delivery time is wrong or your price is too high. Assuming the entire 15% is all price related (which is unlikely), it is still only 15% who are worried about the price of your products.
And yet most businesses are more worried about being price competitive than providing awesome service to their customers or ensuring they differentiate their business in such a way that those customers will always seek out their products or services.
Your prices are important, but they do not rank anywhere near number one as the reason why people buy from you. Is it time to re-think your pricing strategy?
ABOUT DAVID OFFICEN
David is the Founder and Managing Director of proCFO. David combines an accounting and consulting background with commercial experience both as a manager for large commercial businesses and as the owner of private and family businesses.