“Show Me The Value”
Value is the most important aspect of taking someones money. If the customer does not perceive value for the price they are paying, then taking their money can seem difficult or tedious.
For retail product businesses value must be presented on the packaging and literature. The customer has the product in their hands and they can see what they are getting.
But for service businesses the challenge is much more difficult. There is rarely packaging and literature. Most of the time the value is in the process which does not get seen by the customer. When you take your car into the shop for a problem, rarely do you see the process of diagnosis and repair. All you see is that your car is working again the way it should and it costs too much, or does it?
During the diagnosis and repair you might keep the customer updated on your progress. Depending on your business there is always the assessment section: what needs to be done, how will we do it. And, then, there’s the work section: design, research and report, repair, whatever it is. So, you might call and say here we are, here’s what we suggest, etc. You might not. If you are not doing it you’ve just added one more obstacle to customer satisfaction.
Customers like communication. They want to know what is going on, they want to know you know what’s going on, they really want to trust you. Failing to communicate creates a major barrier to price and a customer’s sensitivity to it.
Take, for example, a recent situation where I was the consumer. I had a subcontractor pour concrete that did not pass inspection. So I hired a structural engineer to come out and look at it. For this site meeting I prepared a list of four questions I wanted answered but that my primary concern was whether or not the concrete could be certified for use. In my mind, this is a yes or no question. The engineer wandered around and I pointed out obvious problems. I asked questions but was never directly answered as he had not yet learned the art of listening. He said he would call me first thing the next day. The call never came. So, finally, at 5:30pm he called. I asked what his initial analysis was. He explained that he would have to do “calcs” and did I want him to also do x, y and z…. because those needed to be done. It took over 15 minutes of him talking to get that all out. Okay I’m a little annoyed at this point because I have already clearly stated and written out what I expected. Why is he complicating things? So I say “alright you need to do calcs in order to answer my questions, how much is that going to cost?”. He says, “$1,000.00″. I’m in the car, I’m driving and I say I’ll call him back.
So, I hang up and hit the roof. $1,000 to tell me the concrete will or won’t work. I’m thinking how long could this take? Therein lies the problem…. I can see no value. What am I getting for $1,000? A letter that says “looks good” or “looks bad”? Thankfully after speaking with an architect he could see no justification for the price either and I’ve hired someone else.
The lesson here is this, if the customer does not see value he will go elsewhere, period. The bigger lesson is this: its YOUR job to show the customer the value. And not just show him the value, but make sure he gets it. I know so many business owners that say it is what it is, if the customer doesn’t get it, it’s his problem. WRONG. It’s your problem as a business owner because the most profitable business, the one that makes the big bucks banks on each and every customer returning to spend more money.
The engineer should have spent less time talking about my other problems and at least five minutes telling me what $1,000 was going to buy me. We’ll never know. I mean maybe he was going to certify the concrete, write a 10 page report with pictures and tap dance… At least if he had told me that, I could have asked “how much for just the tap dance?”
Best wishes for a profitable day!
Leave a Comment