Don't Discount - Learn How To Get Your Price

This week I was pondering price objections, since we are all occasionally confronted with these; namely that our products or services are pricey in comparison to other competitors. Of course this necessitates painstakingly explaining the differences. So what is it that gets consumers to determine a "fair price"?

It's quite straightforward. Consider yourself, when you go shopping. Small, insignificant purchases, don't require you to make a value judgement. But larger purchases usually have you more involved; and what tends to happen is that you place a subjective "price" on the product or service.

If the price is below your "established price", you perceive the product to have value, and you need very little coaxing to purchase. Think of a new computer; you determine that a computer with the features you require is probably worth $500.00. If you walk into the store and find this at $350.00, you will feel that you found a "bargain", and vice versa.

The difference between reality and perception leads to a performance gap. This is the principle upon which a blowout sale works; pricing is so ridiculously low that transactions take place regardless of whether the customer has a definitive need or not. In other words the item is so cheap that the consumer doesn't think about the purchase, because his risk has been reduced. A performance gap can be either positive or negative.

A pricing benchmark is usually derived by loosely using a larger market participant as a benchmark. The problem is that this participant may be a market maker, in other words they have influenced the market to see things their way. It is logical to want to influence the market to the extent that your product offering is considered the standard by which everything is measured. But this may not suit your customer's reality; they just don't know it. Remember this maxim:

VALUE = PERCEIVED BENEFIT - PERCEIVED COST

In the case of a pricing objection, this will mean probing the prospect for the objection, and overcoming that by demonstrating your product or service benefits. In other words, comparing apples with apples.

In the earlier scenario this usually means focussing the prospects attention on his needs, and then highlighting the benefits of owning your product. This will usually get the prospect to stop measuring you relative to a competing product, and will justify your pricing.

Now, in a face-to-face sales environment, this is relatively easy to do, although seldom done properly. But what do you do when your prospect hasn't even displayed an interest in transacting yet?

You will recall our chat on Lead Nurturing and Closing A Sale, where we emphasised that it will invariably take more than one contact to secure a sale, and that this requires you to nurture your leads.

A large part of this nurturing process must focus on the benefits of using your product or service. Only through repeated emphasis, and guiding a prospect through a process of discovery designed to uncover needs, can you position yourself apart from your perceived competitors. And this positioning is achieved through the use of dialogue, in the form of closed probes, where you uncover a prospects needs and respond with appropriate satisfiers. All of this can be achieved automatically.

An alternative, instead of using a dynamic, prospect driven process, is to anticipate what many of the objections may be, and to provide a static solution on your website or blog, in the form of FAQ (Frequently Asked Questions).

Your ultimate objective is to create a positive performance gap, where significant value is realised, by having the perceived benefits far exceed the price that you have determined. In order to do this requires you to present your offering in a way that allows you to differentiate yourself, by focussing on your strengths; those areas that give you a competitive advantage. There is no point competing with the large discount operators, on the basis of their price or their features.

Dialogue Marketing for Financial Services

This week I thought, "Enough with the theory and background explanations, lets share a real world example". So that is what we are going to do, work through how technology can assist somebody in, say, the financial services industry.

We all know about the financial services industry; it is much like the pre-owned car industry for the most part. You are faced with high pressure sales people, who palm themselves off as financial advisors. Everytime you hear from one of these guys, it is usually over dinner, or when you least want to hear from them. What is more, they have one purpose in mind; to sell you another product, and then, poof, not to be heard from again.

I have rarely dealt with the same financial advisor twice.

So the relationship appears lopsided, or asymetric. Now I know I am generalising. There are some excellent advisors out there, but for the most part that is not what people experience.

As a professional advisor, you have the opposing problem. How do you manage to prospect successfully when the perception people have is a poor one? All you want to do is be given the opportunity to show what you are capable of, but you need to secure an appointment first. How do you do this?

Surely there must be a way to finesse both sides of a strained relationship; where everybody gets what they want?

The answer is a resounding yes.

Imagine not having an advisor breathing down your neck. Imagine being able to have your situation assessed in private, and yet at the same time being provided with information that is valuable to you; like how much you may need to save each month.

But at the same time, imagine being the advisor, where you don't have to face telephonic rejection daily, yet are still able to engage in a dialogue; where you can still offer a valuable service, and at the same time be notified of potential opportunities.

This "win-win" situation can be accomplished with some imagination and the use of Dialogue Marketing. So without spoiling the fun, watch the video to see what is possible.

The Newsletter Is Dead ..... Let It Go Already

Okay, maybe not dead, but it definitely has lost its shine. You wouldn't say so though. I can hardly go to a website these days without being invited to join their mailing list. Now building a database is a business imperative; don't get me wrong. But what is so compelling about wanting to read your verbose newsletter?

In the early days, say 1995, not many people were into newsletters. So it offered a differential advantage to the early adopters, and was a way of delivering company news, with some really neat graphics.

Problem is, the newsletter became ubiquitous. Every schmo has one; and that's okay, as long as it isn't your only or primary method of keeping in touch with your clients.

I spend a fair amount of time going to networking events, and they are all very similar. You usually meet the same ever so accomplished, ever so successful, ever so on top of everything kinda person. Cool.

Now, as soon as I explain how technology can enhance your efforts at relationship marketing, you can see the thought process, "Ah, email and newsletters".

What is even more enlightening, is what happens after these events. Invariably you get plugged into a standard email newsletter system, and you get bombarded with meaningless junk, not even remotely connected to your interests, until you unsubscribe. It's like, hello, there is a disconnect here.

Okay, I appreciate that people just don't know that there is a better way. The pathway isn't clear, and it seems so complex compared to a simple newsletter.

So what went wrong?

They Are Boring

Newsletters aren't about the customer; they are about the company. They are generally self-promoting screeds, with mostly useless information. Aside from telling your clients that Susie or Johnny was promoted, or blabbing on about some amazing promotion, there is very rarely anything in it for the customer.

They Treat All Customers As Equal

This is a noble cause in politics, but not in business. Today you can personalise a newsletter, by being clever and inserting a customers name and a few other personal details; but this isn't really identifying the customer as an individual. Essentially everbody gets the some monthly blast.

They Don't Build Relationships

Think about your relationships; there is a lot of give and take, or interpersonal exchanges. They aren't all one way traffic. How can a relationship be forged if you aren't getting to know your clients or prospects any better, where the only information dispensed is yours, and where you determine when to communicate?

They Are A Waste of Resources

Have you ever tried to consistently publish a newsletter? Many have, and I get requests for them all the time. They are time consuming; customised newsletter templates are expensive to design; they are notoriously difficult to get delivered; and continually finding compelling content is a nightmare. My experience is that generally most newsletter efforts become dormant, only to be revived when a quick promotion needs to be conducted.

You could be fooled into believing otherwise, though. There are lots of email service providers, all offering free generic templates and easy terms. The issue isn't them; it is you. You have been lulled into thinking that this is the silver bullet. It isn't. You need to have a clear communication strategy, and this needs to move away from message blasting, and towards timely, personalised and targeted communications, using many of the mediums available to you.

They Never Get Read

We all have a problem with inbox clutter. As we sort through our daily emails, we scan for key identifiers, like names or subject lines. When we get a newsletter, it is sometimes a nice to have, but we usually save it, hoping to return later and read in leisure. But that rarely happens, because the next tsunami of emails has arrived. So your email package may be telling you that read rates are high, but hey, nobody is really reading.

So what now?

My next article will cover some really neat, easy and effective new ways of communicating, that can handsomely compliment a newsletter, or better yet, replace it all together.

Download a printable version here.

Profit Generation Through Dialogue Marketing

I know, my articles don't seem to follow a particular order. These are largely determined by events at work and/or reflect the workings of a disorganised mind. This article dovetails with a more detailed piece I wrote, which is available for download here.

Using the power of new technology isn't just about mass email, which is essentially an unsophisticated acquisition tactic. It is far more involved, personalised and interactive; and can greatly improve your ability to develop strategies for both customer acquisition and retention; not to mention enhance your profitability prospects. This is a brief discussion to put retention and acquisition into perspective.

Marketing continues to be the sum of all business activities involved in the transfer of goods and/or services, from the producer to the consumer.

Traditionally, marketing has been primarily outwardly focussed, namely on the acquisition of new consumers. So if you look at the diagram, that would mean that the efforts were mainly expended on acquiring grey dots.

More recently marketing has evolved to emphasise an inward focus too, namely the retention of existing consumers; or to put it simply, expending an effort to keep your coloured dots.

This has come about as a result of the cost advantages of retention versus acquisition. Moreover, in a fiercely competitive and increasingly fragmented market place, new "virgin" customers are not in abundance, with consumers becoming increasingly savvy.

Fortunately with the advent of new technologies both the tasks of acquisition and
retention can be easily and affordably facilitated. In fact, the new technologies allow your marketing strategies to become an omnipresent, personalised, 24/7 tool to keep your brand “top of the mind”, instead of the mass marketing, traditional mediums of yesteryear.

Marketing Acquisition

Marketing continues to perform the function of acquiring new consumers. Aside from the usual mass marketing approaches, this usually involves progressing a lead from suspect, through prospect, to first time consumer. This “lead nurturing” is easily enhanced through the use of new technology.

For a more detailed discussion of how technology can assist your acquisition efforts, click here.

Marketing Retention

Without proper care, any first-time customer, repeat customer, client, or advocate can become inactive or lost, causing the company substantial losses in sales and profit. In fact, your customers are constantly in a state of flux. It is up to you to determine what your loss rate will be. Of course you could take the "who cares" attitude, and continue to concentrate on acquisition; but at what cost?

Summary

There is no doubt that traditional marketing remains vital; what has happened is that the emphasis has shifted from the transaction to the relationship. In this context relationship does not refer to a deep, meaningful, interpersonal connection; rather it refers to a customer’s purchase history.

Of course during the acquisition stage there is no history. Here the objective is to get a prospect to make the transition to customer, in other words you coax the grey dots towards the funnel. Even those dots that do not become customers, should be nurtured until they become ready, given that it usually takes multiple contacts before a prospect is ready to transact.

During the retention stage you, and your customer, have a history. Hopefully it is a good one, and you can leverage off of it. Too few people do, and this is why so many customers defect to your competitors. You can implement some amazingly simple strategies that are effective at acknowledging the customer, creating a positive brand experience and reducing and post purchase cognitive dissonance. It is all about retaining your coloured dots; or at least slowing down the rate of attrition.

For a more detailed discussion, specifically how technology can help you (with examples), please click here.