Tuesday, June 21, 2011

Charging for the right thing

Why do customers shop so much? Why is there less loyalty today than in the past?

I think it's because it's easy to get almost anything anywhere and it's easy to compare pricing. So consumers turn to "cherry picking" the best deal. They get the best price on the audio equipment and then install it themselves or get the best deal at the car dealership five hundred miles away and then take the car for servicing to the dealer down the street.

We can blame the Internet, technology, or society, but there is another factor:

We are charging too much for the wrong stuff, and not enough for the important stuff

Why charge more for exactly the same car that another dealer can get? But if your service is so great or you offer other benefits, why not clearly articulate them and charge for them?

Service sector companies are especially vulnerable to this. We charge little to nothing for our expertise, yet we do charge for the more basic stuff and get cherry-picked. That's our fault. It comes down to this:

If we really, really do offer something worth paying a premium for, why don't we have the courage to do just that?

If we did, then we could charge less for the more mundane, easy-to-get services or products we offer and it would be the death of cherry-picking.

Barry LaBov
LaBov & Beyond

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