It’s getting harder and harder to get and keep your customers’ attention and make the sale. Here are five things you can do to make your competition irrelevant.
Is there an easy way to make the competition irrelevant? In an age with so much access to information, bombarded by advertisements and commercials, is it possible to keep the attention of your potential customers? What is the secret to help customers make an easy decision to buy? There is a secret formula that works for e-commerce, retail, bids and proposals. It is a simple formula that has worked since the days of bartering beads, beans and burrows.
Create differentiation within your own products or services. If you have an assortment of products or services to offer, you may have identified your differentiation already. Common examples of differentiation for products may be based on size, speed, color, components, combinations or accessories. Common examples of differentiation for services include speed, performance, quality, responsiveness, availability, ease or integration. If you are in the unique position of having only one product or service to offer potential customers then you should consider accessories, partners or other options to create a variety of levels from the perspective of your future customers. If all else fails, you can offer different levels of shipping speed or delivery.
Focus on the Moment of Truth
Focus on the moment of truth, the place or position that your products or services will be offered to the customer. In a retail environment this may be the end-cap, a wall display, shelf space or a counter display. On the Internet this may be an on-line store, e-bay or your personal site. It may be in a catalog or a brochure. It could even be part of an email communication. Occasionally the moment of truth may be in the form of a bid or proposal after several months of discussions with a potential client. The moment of truth is the moment that the customer has a an option to make a purchase decision, to buy your products, invest in your services or hire you. This is the moment that you need to put your good, better and best foot forward.
Good, Better and Best
Give your customer three options. Show them something good, show them something better and show them your best. It is a simple formula that takes a little care and creativity in crafting your message. The three offers should be based on the foundation of a consistent theme, the single most important underlying reason to invest in your products or services.
The ‘good’ product or service should be the lowest cost option but still demonstrate your inherent value and differentiation from the competition. You should be able to clearly define your value, the features, advantages and benefits of what you have to offer. This is the customer minimum investment to buy, and it should be a good one.
Step up to better. Using the foundation established with your ‘good’ offer, add something more for a slightly higher price. The customer value should be easily distinguished and highlighted as more significant than the slightly increased price. Make a clear comparison to the “good” product or service. This should be a preferred alternative for the potential customer. The option should be slightly more expensive, but worth it. Some examples may include, “with additional 1GB memory”, “includes six months of Satellite Radio”, “bundle package includes download of 50 songs”, “50% faster than the original”, and similar comparisons.
Show them your best. The third option should be the best that you have to offer, the cream of the crop. This is the most expensive option and will only be selected by the most exclusive of customers. It should also have something in common with the original “good” option and the “better” option, but the third and final option should be recognizable the best you have to offer. The price may be significantly higher than the other two options, and that is fine. Demonstrating a significant leap to a higher price point for the top of the line option will help to differentiate the cost value of the other two options. Do not expect large volume of sales on the best offer. Rather, use this to demonstrate competitive advantage and differentiation with the “wow” factor.
Even if you have hundreds of customized solutions or products, select and present three options, good, better and best. In the decision process, human beings can easily compare and contrast three options. The mind can juggle three prices and three sets of features for a quick and easy decision process. Once you add a fourth element, the customer needs to start a deeper level of analytical comparison. If you have too many options then the customer will need to spend more time to consider the alternatives, and while they are weighing your multiple options they may start to consider the competition as well. Limit your presentation to three options. If the customer makes a specific request for an alternative, then provide the alternative that the customer has requested, but avoid introducing too many new variables unless asked. The more factors in a decision, the longer the process and the more likely to turn your “Moment of Truth” into a Lapse into Confusion.
The Value Proposition
For each option that you present to the potential customer, provide a value proposition. Your value proposition should be something that can be conveyed in three to five bullet points, three to five sentences, or spoken in thirty seconds or less. You should be precise and succinct. Present the value proposition from the customer point of view. For example, rather than say “we ship in three to five days”, you could say “the product will typically arrive at your door in three to five days”. Rather than say “we have the fastest process”, you could say “our process is fast, so you get results faster”.
A value proposition typically contains the essential elements of Feature, Advantage, Benefit, Image and Offer. This is a reference to a specific important feature of your offer, the advantage as compared to the competition, and the benefit to the customer. The Image refers to a photograph or diagram. The Image is an important element of your value proposition, as people will generally remember an image more readily than words. Images convey feeling, and typically depict a lifestyle example of the customer enjoying the benefits of the feature’s advantage. The Offer is a call to action. Give your customer an offer to buy, and let them know specifically how to conduct the purchase. Examples of the order call to action are “buy now”, “limited time discount” or a number to call to place the order by phone.
An example of the value proposition with the essential elements is “Call now to order the self-cleaning home brew coffee maker and start enjoying fresh, hot coffee with the extra convenience of no fuss, no muss and no clean-up. Order on-line to receive your free sample of assorted coffees, available while supplies last.” All we need to complete this enticing offer is an image of hands gently caressing an aromatic steaming cup of coffee, cradled over a saucer.
Plan, Do, Measure and Adjust
Carefully plan your three offers and the value proposition for each. Once you introduce your three offers, measure the success rate of each option by the corresponding sales attach rate. Typically the “good” offer should be about 25% of your sales, and the “best” offer is normally only 15% of your sales. Some customers will want the lowest cost option, and some will want to be exclusive and purchase the best option regardless of price. The middle of the road “better” offer is customarily the lion share at 60% of your total sales. Most customers are willing to pay a little more for quality, speed or convenience associated with the “better” offer if presented properly, even if they do not want to pay the high price of the “best” option. The “better” alternative gives customers a chance to do a little better than “good”, but still feel that they saved money as compared to the outrageously priced “best” option.
If you do not experience the desired result in mix of sales then it may be necessary to adjust your plan or your value propositions. In any case, as long as the customers continue to make a selection between your options, the competition is irrelevant. Your customers can get what they want, and they will remain your customers.
Words of Wisdom
“No computer network with pretty graphics can ever replace the salespeople that make our society work.”
– Clifford Stoll, Silicon Snake Oil, 1995
“You can only cure retail but you can prevent wholesale.”
– Brock Chisholm
“Give your customer three options that they can compare without memorization. Make it quick, make it easy, and add value. – Just like that.”
– John Mehrmann