“Our customers buy only on price. If we don’t offer the lowest price, they go elsewhere. They don’t care about anything else…it’s just price. That’s the way our industry works.”
Annie was reacting to my challenge that acting like a commodity is a choice you make.
“So is your key strategy to always offer the lowest price…in every circumstance, for every customer?” When Annie replied, “Not really,” I asked:
“Why do customers contact you?”
Annie is a customer service manager who described her business as a global logistics company who can ship any product to any place in the world and ensure that it arrives on time and ready to use. In fact, they strive to get the shipment delivered early. When I mentioned that I didn’t hear anything about price in her description, Annie responded with, “But that’s what they always ask first…how much will it cost to ship to someplace and we tell them how fast we can deliver and at what price.”
Annie came to understand that she had a choice about how to respond to such inquiries. Her customers care only about the value her business can produce for them – value she thoroughly described in her description of her business. Her response must increase the visibility of that value before she quotes a price. If she makes no effort to learn about her customers’ needs and goals, and she offers nothing novel or compelling to communicate why she has the most value to offer, then the customer will focus on getting the lowest price from her. Being the company that responds fastest with delivery time and price, deeply discounts all the value her company can produce.
To earn preference with customers, they must realize that you are more interested in helping them make money than in taking their money. Ask 3 or 4 questions to learn more about their business and needs. For Annie’s business, what’s it worth if their fragile shipment arrives in Germany or China or Australia sooner than expected?
“How do we start doing this?” asked Annie. “We can’t change our business model overnight” Start by meeting with a few key customers, expressing your responsibility to continually produce value for them and asking if you can learn more about their business. Discover their goals and strategies, and win when they win by offering some program that produces a quantifiable financial advantage as their annual business with you increases or your performance exceeds expectations. Connect this to their goals such that their distinctiveness or competitive advantage is strengthened by doing business with you.
Contributing to the achievement of your customers’ goals enables them to see you as partner rather than peddler. It’s your choice.
How can your response to inquiries concisely communicate the full value you offer?
What first steps can you take to change your response process?
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