Would you agree that most of your customers are aware of how much your business charges compared to your competitors. Today, with technology at our fingertips, it has become way too easy for your customers to research prices and see what your competition offers. Think about this. Are your customers an incentive away from going elsewhere? If they are, you should be worried about losing them. In reality, you have no customer loyalty. There is always someone else out there who can provide something 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 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. It’s that emotional connection that gets your customers hooked on you.
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. In other words, the degree of caring and individual attention you show your customers. I like to call it Moments of Magic. What are the warm feelings your customers receive when they do business with you.
Does everyone on your team know the value of what you sell or provide?
Ask your employees this question: If your customers 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. Or even worse, would they offer discounts to justify the price difference? The problem is your team may not understand the true value of the experience they provide your customer and think that by just performing tasks and transactions accurately it is enough.
Ask yourself or your team this second question. How good of a job are we doing to create the perception of value for the expertise and experience of our services? How well does everyone believe in this? Remember that the value your team perceives is going to be projected on to your customers. Do you sell something similar to your competitor, or do you truly believe you are the best at what you do as an experience provider?
If you believe your products and services are the best, and you provide an experience that your competition can’t match, then your prices should reflect that. Everyone expects to pay more for a better experience when they are dealing with the best. But when the best and experience is similar in price to the rest of the pack, customers get suspicious, the perception of excellence disappears, and you are left with merely a commodity.
So how do you want to compete, on price or experience?
Every business has to decide where they want to compete in the price wars or the experience wars. I prefer to coach my clients to compete on the basis of a magical and outstanding 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% increase in customer satisfaction can increase a company’s profitability by 75%.
In fact, 85% of US consumers say they would pay 5 to 25% more if they assured a better customer experience. Price is something you offer when you have nothing else. I love this message-
“Discounting is the price you pay for being average.”
Are you average? Are you struggling with not having a Customer Experience Strategy? I get it. Many of my clients once struggled with their customer experience being average and thought the only way to success was to compete on price. Once they scheduled a training session with me, they didn’t have to compete on price anymore. They began to blow their competition away. Their business began to thrive because they made more money and never had to discount again. What was once considered impossible is now the standard experience that their competition is trying to duplicate.
So if you want to not compete on price, make more money and be the business that EVERYONE loves, think experience not price. Now that is Magical! Need help? Contact John today and he will fix it for you.
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John Formica is America’s Customer Experience Coach, team culture expert, keynote speaker, and Top 10 Global Thought Leader and Influencer on Customer Loyalty. For information on customer experience programs, leadership training, how to find and hire great people, affordable tailored training programs or to book John to speak at your next event, contact 704-965-4090 or visit our website at JohnFormica.com.