How important do you think price is to your success?
To some buyers, it’s everything.
For a business, one of the easiest routes to take is to sell on price. To always be cheaper.
But let me tell you now, for a small business, this road is paved with misery. Because your customers have no loyalty to you other than how cheap you are. As soon as another business is cheaper, they’re no longer your customer.
One of the hardest routes to take is to sell on quality and added value. And have that reflected in your price.
But once you learn to sell on your added value, you attract a different class of customer. These customers are discerning, loyal and know that there’s not as much choice amongst quality as there is for cheap.
Businesses in the service industry have a better understanding of this than businesses that sell a product.
Apples aren’t always the same when choosing a solicitor, accountant, doctor, dentist, therapist, personal trainer, etc. Their personalities, their knowledge and their reputation are all part of the mix when you make a decision. And the pros in the service industry are fully aware of this and know how to present their differences in a favourable light.
Plus you seem to have more of a gut feel about what feels right when discussing your needs with them. It really is a case of who you like and trust, before who fits your pocketbook, when making your choice.
Products are not so clearly defined. It’s harder to sell the added value. Because sometimes you’re not truly aware of what your added value is.
Take book stores.
They have a really tough time now competing with the mega stores like Big W and Borders. Although Borders is no longer opening new stores, they have a substantial number of existing stores still operating. Small, independent bookstores are closing with unprecedented regularity. As are chains in regional centres.
When I arrived in the bush in 1992, my largest regional centre, Bathurst NSW, had Angus & Robertson, Dymocks and the ABC Books. Only the ABC is left standing. With Big W as a backup.
And where to buy is sometimes a hard choice for customers to make. Why should someone pay $10 extra for a book at your store, when they can get it so much cheaper at these mega stores?
Sometimes the difference is in the subtlety of the offering.
Abbey’s Bookshop is a successful bookstore in Sydney. It’s been a family owned business since 1968, when it opened its doors. And they pride themselves on being Australian owned and independent.
They’ve also got their mix right.
They specialise in history, science, philosophy, classics and crime. And they stock the entire range of Penguin Classics. As well as being a general bookstore.
They have 40,000 titles in stock. Not on their database, but on the floor. For you to choose from today.
And they have a backlist of hard to get books you can order from. From publishers throughout the world.
How many titles does Big W have? From my observation, only a limited range of books. Will they order books in for you? No, I don’t think so.
Abbey’s provide excellent customer service through their information terminals located at the front of their store and other information and service areas located throughout the store. And they have visible staff manning the store. No running down aisles, looking in nooks and crannies, for a sales assistant.
You don’t want to visit the shop? Order by phone. They have 8 separate phone lines so you rarely get a busy signal. And an 1800 number for out of towners.
Want to order online? They’re not hard to find. Key in book stores on Google Australia. They’re in 6th place.
They apologise for the fact that not everyone who works at Abbey’s can be an expert at everything. But they assure you that all their staff have a strong interest in at least one of their specialisations, some are even degree qualified. And they offer friendly, knowledgeable service.
This is outwitting your competitors with chutzpah.
And yet another example of the power of the personality that’s running the business. They’re a family owned business that puts their customers first because they know first hand the value of their customers. If money isn’t coming in through the till, the family doesn’t eat.
Does price matter here? If your customer is a bookaholic, I don’t think so.
And the book market in Australia is substantial. Hugh Mackay, Australia’s social biographer, recently wrote that per capita, Australians buy more books than anyone else in the world.
Borders and Big W are run straight from a textbook. Do this, do that, but not this and not that. They have no flexibility, so they can’t deviate from the rules. They all look alike, and although they certainly provide adequate service, they can’t come close to offering the hands on, personal service, coupled with the extensive knowledge about their range of books, that Abbey’s does.
You can do the same. Scale it down or scale it up. But look at where your competitor is vulnerable. Look at the things they can’t do that you can. And go in with your best tactics to outwit them. And make sure everyone knows the difference between you and them.
That's how you sell your added value and command a premium price. No, it's not easy. It takes courage. It takes patience. And a strong belief that there are customers out there who want your added value. And believe me when I tell you that they're there, and they'll find you, if you're promoting yourself in the right place.
That's another subject. Promoting in the right place.
Yes, I’m definitely a Guerrilla From The Bush and I’ve learned so much about outwitting retailers. My $39.95 Fitz Like A Glove™ Ironing Board Cover competes every day with a $4.00 product. Yet I’ve taken 90,000 customers away from the large retailers. And so can you.
What do you do that’s different? Or, what can you do now that’s different? Every large company is vulnerable somewhere. Think about it and take action to implement a guerrilla tactic that will reap you new customers. Many of them are there for the taking.
I’d love you to post your comments and let’s see if we can help each other. Better yet, let’s have as many people as possible pitch in and share their experiences.
Take care,
CAROL
To see what we’ve achieved, click on our website at www.interfaceaustralia.com. We’ve developed markets for 6 products without national or international retail distribution.
Read the story of how our business began on The Ironing Board Cover Lady. No sales hype. Just a down home story about how we started our business on the dining room table of our rural property, driving on ‘L’ Plates, without an instructor.
A comment about LinkedIn. If you’re not a member of LinkedIn, when you click View Full Profile, you’ll be asked to join. It’s free and the option is yours. There are benefits to joining. Once you’re a member, you can key in the name of any person you do business with. If they’ve taken the trouble to complete a Profile, you’ll be able to assess their background, their capabilities and the calibre of person they are. You might be, as I am, often pleasantly surprised. So go have a look.
1 comment:
You're comments are 'right-on' Carol. What is it that makes us go to one store or supplier over another? Is it just the price?
How many of us have anecdotes about why we go to one place rather than another? Three examples came to mind.
The Sub-Newsagency/Post Office
I used to love going to a little local Post Office/newsagent where a husband and wife team were very efficient, helpful and 'went the 'extra mile'. After working very long hours for many years 'Mr and Mrs P/Office/Newsagent' decided to sell. We locals were very sad: no more chats: 'serious and non-serious', no more banter.....the list went on. We use the Post Office a lot when sending our information around Australia and the world.
It wasn't long before we were being introduced to the new owner. The hours of the shop were to be shortened, and some services reduced. We saw magazines and stationery not being unpacked and left in the aisles, old newspapers blocking the doorway and I hoped that Mr and Mrs P.Office/Newsagent wouldn't come and see their old store.
Since then there have been three owners, and very few smiles from the owners of this business that could be a 'gold mine'. It makes me feel sad too.
The Bookshop
A local bookshop owner, who had bought a franchise,had done very well, he then added an ABC store...and did extra well. He had a corporate retail background, but had not run a small business before. Having the merchandise was one thing, but he went into the community: he had already joined the Retailers Association, a local community foundation, sponsored many community events, always had time to have a coffee in a nearby cafe with local people, and gave helpful tips to partners who had little idea of what to give as presents....which was a good base as one day....a big US chain moved in next door! What a shock! Although times were tough, the bookstore owner kept going and it is his engagement with the community that has helped him carve his niche and go the 'extra mile'....even with the 'big' store right next door.
The Deli
I have been going to the same deli for over 20 years. It is a small deli run by an Italian family.
Why do I go there? Are their prices cheaper? Not necessarily. Are they quicker or more efficient? Not always.
Why shop there? The family know their 'stuff', greet me by name, suggest items, will get ingredients in, and often suggest not to buy something if it will not 'go' with the meal! I've seen the staff say to children, who don't have the correct money, 'Bring it in next time'. There are, frequently, free tastings of deli goods, and where else can you buy such an array of Persian Fairy Floss!?
So, how important is price!?
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