August 21, 2012

What customers are paying for

Filed under: business,marketing,media — Erik Dobberkau @ 07:26

They don’t pay for a product or service. They pay for an experience. This applies for consumers as well as for B2B. Which is why racing to the bottom makes less sense every day. How great an experience can you deliver when making a commercial priced at 3,000 bucks with an intended profit margin of 20%? As opposed to 30,000? Sure, you have to deliver a lot more, but not in the product.

The product itself will come and go, it is just a temporal symptom, a fad, not to be talked about once the shine has worn off. But the experience of how the customer got to it will last much longer. That’s what she remembers, what she’s telling friends, colleagues, business partners, even her competition will be hearing of it. That’s what brings future business.

How much it costs is not as important to a prospect as it is for the salesperson desperate to close the deal. Yet salespeople are often trying to make the whole transaction a safe one, knowing they can deliver what they have sold, or, if they can’t, have an excuse, because the customer wouldn’t pay more, etc. But the fact is, more often than not, they are afraid they won’t make the stretch, they are afraid of uncharted territory, of leaving their comfort zone. Their own perceived sovereignty is more important to them than the delight of their customer and the advancement of their own company.

As Seth already pointed out many years ago, the problem with racing to the bottom is that you might win.

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