Customers Pay For What They Value

To get the prospect to pay your price, regardless of the level you set it, he or she must perceive the value received from purchasing your product or service exceeds the investment required to obtain it. If we are to persuade prospects of the value of our products or services, we must know what our prospects truly value.

While working at Xerox, in order to develop its approach to selling against much lower priced competitors, one of the first things I did was to identify what their customers wanted when purchasing copiers. It is important to remember that unless the customer wants something, it has no value to them. Based on my research at that time, and my later experiences, in terms of products, I have learned what customers want:

Customers Value - Products

To use a copier example, they wanted a copier that produced high-quality copies that communicated the positive quality image of their organization. People are aware that the copies they sent out made a statement about their organization. In terms of capability they wanted a copier that would do the specific tasks required or jobs they needed. The copier may need the ability to copy documents handwritten in pencil or just a laser printed document commonly used. It also may have to collate, sort, or feed multi-sheet documents. Reliability was important because even if the unit could do all the types of work needed, but didn't consistently do it, there was a problem. Lastly, and most importantly in a business environment, is productivity. The copier had to have the speed and efficiency to be able to do the work in the time allowed and respond during peak rush periods. The customers understand that they don't want a copier; what they really want is information communicated to meet the needs of the organization of which a copier was an integral part.

When you deliver a service to an organization there are consistent elements that a company, or individual, value. These elements are:

Customers Value - Service

In terms of service, we know that customers value the confidence that the organization will do what is needed to ensure the product they purchased meets their needs. They want to be confident, and not have worry that both the organization and the product will do what the salesperson said it would. They also want a copier they can trust and rely upon. Reputation is also a very important factor because it is the one element that people use to judge the potential for future satisfaction. People believe that if your organization has a reputation for taking care of customers, then they feel your organization will do the same for them. Customers believe that reputation reflects reality and the better the reputation, the better chance they will be satisfied with their decision.

Another key factor for customers is availability of resources. Customers realize that even if the individual or organization wants to provide a level of service, unless the organization has the expertise, knowledge, personnel, and financial resources, they cannot provide the level required.

The last element customers value is freedom from risk. When making an investment in a product or a service, customers want the assurance that their investment is a wise one and they will not have to worry. They want an "insurance policy" or assurance that their investment will pay off, or they will get a positive return for the money they invest.

It's easy to generalize about what prospects look for when they purchase a product or service, however, it is much more important to understand what YOUR customers want. Take the time to ask your customers what they want. It is not difficult to learn if you will just take the time and make the effort to ask.

For example, not long ago, in preparation for a keynote address for a vending industry association, we surveyed the customers of the attendees, those who had vending machines installed in their businesses. We asked them to tell us what aspects of the products were most important to them.

Value of Product (in order of importance)
1) freshness
2) variety
3) quality
4) price

It was interesting that price was last in order of importance of the four primary needs. Even with a very low price, if the product was not fresh or if there was not a wide enough variety, or top quality goods, products would not be sold, the machines would be inactive, and no sales would be made. It was important to note that lower vending sales for these customers had a greater negative effect than a higher product cost on their profit.

During this research we also examined what the vending customer wanted in service and found that in selecting an organization to provide vending for their businesses the factors they considered were:

Value in Service (in order of importance)
1) cleanliness
2) prompt service
3) availability of product
4) reliability of equipment

In short, they wanted to ensure the machines were clean at all times, promptly serviced or stocked on a regular basis, desired products were available, and vending equipment operated reliably. You see, they didn't just want someone to come quickly; they wanted other important elements which make an overall impression of service.

Remember, we asked the person who selected the vending company what they wanted. They were the vending companies' customers. The person purchasing from the machine was the customer of the person in the company who selected the vending company. It is essential that you know who your customers are.

What does your customer want from your product or service? This is a very important question that you and those responsible for marketing and sales in your organization must answer and answer well! Until you make a clear, accurate answer, you cannot hope to build your value in the mind of your customer; much less a prospect that has not experienced your product or service.

To understand what customers value, begin by asking questions. You must clearly define what a customers values if you are able to communicate it persuasively and get them to pay a premium for it.