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Issue Three: Do you know the value of what you sell? Do your customers?
As part of the Think Tank process, we often conduct “narrative qualitative” research. In other words, we talk to your best customers to find out why and how they buy. I love these conversations and I personally have conducted thousands of depth interviews over the years. I’ve talked to customers in all types of industries — from neighborhood landscapers to some of the world’s most complex oil and gas technology companies. Here is the most consistent finding across all these interviews (drum roll): At least 80% of them told me they would have paid MORE. Sometimes a lot more.
Why do we leave so much money on the table? I have a theory. The rise of supply chain in the buying process has everyone focused on price and we (the sellers) have interpreted this behavior to mean that cost savings is the only benefit a customer values. And that assumption is false.
Finding out how your customer determines value can help you package your products and services correctly. Learn to explain the value clearly and appropriately set your price.
LESSON LEARNED: Effectively demonstrating your value across the entire buying process will not only increases your market share but also can dramatically improve your profit margins.
The bottom line is that you have to know your customers; not just the quantified version that big data supplies to you, but the innermost emotions, opinions and perceptions that drive their consumer behavior. Then, you need to take that information and incorporate it into every step of your business process.
Click here to download the full article Lessons from the Think Tank.
About the Author
Denise Patrick has provided marketing and consulting services to over 2,500 firms since 1987. An expert in buyer behavior and behavioral economics, Denise works with high-growth entrepreneurs to develop the right strategies to bring their products and services to market. Denise Patrick is a senior strategist at Pierpont Communications in Houston.