Got Competition?
You can bet you do. Even if you didn’t have it a few years ago, you’ve got it today. Just search what you do…homeowner’s insurance…homecare…banking…any Google search will find an average of 298,000,000 results. Yeah…you’ve got competition. So maybe it’s time to look into Value Pricing. It’s a way convince your customers that you offer the best value. Do you have an effective way to show value?
The answer…
…is by showing customers that you offer them the value they’re looking for. Today, value is the forgotten element in marketing. Value is what your customer really wants. Do you offer it? Do your customers think so? How do you make sure?
Value Pricing at work
What is Value Pricing? And why must you concentrate more on the “value” than on the price? Wikipedia defines it like this:
Value pricing a marketing strategy which sets prices primarily according to the perceived value of a product or service to the customer rather than according to the cost of the product – Wikipedia
Note that we’re talking about value, not price. What’s the difference?Warren Buffet sums it all up: “The price is what you pay. The value is what you get.”
Even the lowest price won’t sell your product unless the customer perceives value.
Value Pricing starts with what your product does for the customer
What makes your products valuable? What does it do for the customer or for the business that uses it? What’s its role, and why is it important? What did the customer do before your product? Does your product replace another way to solve a problem, or is it unique, solving a problem for the first time?
The first step in supporting value pricing
- Tell them about your features. The first step in educating your customer about how valuable your product is can be simply reminding about all the features you’ve built into it.
- Compare those features to the competition. Talk about what’s new. Talk about what makes your product unique.
- Stress the benefits. Customers don’t actually buy features: they buy benefits. They need solutions. Your product may be spinach, but customers (like Popeye) buy it for the strength it gives them. They don’t drink Diet Coke for the taste, they drink it to look great in a bathing suit. They don’t eat Greek Yogurt for the ingredients. They eat it because it tastes good and is healthy.
- Engage with your customers. Find ways to start meaningful conversations with them. Engagement is crucial in the age of social media.
The Korn/Ferry Marketing Pulse Survey is based on an online survey of 124 senior marketers. It found the top concern of CMOs is customer engagement (52%)
But there are more ways to have conversations than just on line. When’s the last time you started a meaningful conversation face-to-face, or more likely, on the phone? - Show your expertise: if you’ve “written the book” on a subject, you’re usually considered the expert in the field. The same holds true for articles or blog posts that you’ve written. We all respect “Ted Talks” presenters, but we can’t all present them, but if you’ve led a high level seminar it’s pretty impressive. If your customers don’t know about them, they won’t value them. So tell them!
Giving your customer information about the value you offer isn’t rocket science. But when your customer recognizes how valuable your product is to them, your sales may well skyrocket!
Related articles:
5 Reasons you need to show value to your customer
5 Ways to use Informer Messages on hold to show Value