Do you compete on price or experience?
Every business must decide where they want to compete in the price wars or the experience wars. I prefer to coach my clients and train their staff to compete on the basis of creating a unique, outstanding and memorable customer experience. Why?
Here are the facts:
- Repeat customers spend more than new customers.
- Repeat customers give higher satisfaction scores.
- Repeat customers give referrals more often than new customers.
- You need five new customers to produce as much as one repeat customer.
- A 5 percent increase in customer satisfaction can increase a company’s profitability by 75 percent.
In fact, 85 percent of US consumers say they would pay 5 to 25 percent more if they assured a better customer experience. How much more profits could your business have if you could provide a better experience? Price is something you offer when you have nothing else. I love this message.
“Discounting is the price you charge for being average.”
Most customers are aware of how much your business charges compared to your competitors. They check reviews and research the internet all day long. Are your customers an incentive away from going elsewhere? If they are, you have nothing and you have no customer loyalty. There is always someone or some other business who can provide something with less value and sell it a little cheaper.
However, I am sure that we all have a few businesses we are loyal to because of the relationship we have built, the people who work there, consistency, the assurance and trust they give us, or how they make us feel. With these businesses, we usually don’t even care what other similar businesses charge.
How does that happen? Well, it is due to the experience your business consistently provides at every touch point, by every employee so that your customers have no idea what your competition charges.
Why is that? The key to building long-term customer loyalty is not through chasing your competitors on price or luring new customers with discounts, but by providing a positive and magical experience that is so engaging, so memorable, that your existing clients return again and again and can’t stop talking about you to others.
Are your customers an incentive away from going elsewhere?
Ask your employees this question: “If a customer told you that they could get what you sell from someplace else for significantly less, what would you do to keep them?”
Would your team act apologetic and start offering the customer more stuff? Would they just offer a discount to justify the price difference? Or worse yet, just shrug their shoulders and say “Oh well!”? The problem is your team may not understand that the true value of your business is in the experiences they provide to their customers. How good of a job are you doing to create great experiences for your customers?
Do You Have a Customer Experience Strategy?
The best businesses have a customer experience strategy that produces an experience that is unique and memorable. Many of my clients once struggled with their customer experience. It was just average. However, after coaching them and providing training to their staff, what was once considered impossible is now the standard experience that their competition is trying to duplicate. Now that is magical!
Need help with your Customer Experience Strategy? Want to able to charge what you want and deserve? Contact John today for a FREE Strategy Session Call or let’s schedule a training workshop for your team. It might help you achieve the profits and goals you always dreamed of. Contact John at info@johnformica.com or (704) 965-4090.
John Formica is America’s and Australia’s Customer Experience Coach, team culture experience expert, keynote speaker, and Top 10 Global Thought Leader and Influencer on Customer Loyalty. For information on customer experience programs, leadership training, team culture, business growth, how to find and hire great people and tailored training programs just for you or to book John to speak at your next event, contact 704-965-4090 or visit our website at JohnFormica.com.