Your Customer’s Vital Perception Shift: From Potential Value to the Relationship’s Value
by Vince Skolny via @GrowDemand
I want to start this week by publicly answering a very good question that I was asked privately via Linked In. It will serve as a natural segue to this week’s topic: Am I saying that there is no limit to how much a customer will pay for your product or that there is no limit to what you may charge?
I am not.
Regardless of what you sell, from yo-yos to yachts, there is a limit to how much any individual customer will spend on a transaction or as an aggregate amount or as a percentage of their paycheck or by whatever comparison they reference spending on your brand.
But here’s the thing: Most individuals spend substantially less than they would be willing to spend because: 1) Genuine value is lacking in most markets; because, 2) most marketers are competing on price, rather than engaging in market competition.
By lowering price, rather than creating value, businesses create markets in which customers might be “satisfied” but never loyal because they have not maximized the value for which they would be willing to pay. The result is they have no brand to be give loyalty for providing it.
That is your opportunity.
By creating value that your customer wants and refusing to compete on price, you can build the expectations that drive their preferences which lead them to buy more from you, more often, and at higher prices.
Is there a limit? Of course. But that limit is at the upper end of each customer’s untapped willingness to pay. That’s the point of the #GrowDemand marketing concepts.It depends on relationships.
Relationships depend on you.
Relationships Depend on Delivering Promised Value Consistently Over Time
When I explained the questions your customers are asking at each phase of The Marketing Process, I told you that there comes a time during the process of transforming paying customers into repeat customers that your paying customers’ perceptions shift. They are no longer considering potential value against the risk of your not delivering and the loss that would cost them.
Instead, they begin considering the value of their relationship with you. Why? Because they trust you will deliver the value you promise.
It doesn’t matter whether “you” is a solo-preneur, a sales rep, a department head, an corporate executive, or the owner of a company. Sure it effects how they answer the question — in terms of dealing with you as a person or with your team, or with you as a representative of your — but it does not affect the question itself: What is the value of this relationship?
That only happens when their expectations are formed over time by your making, keeping, and delivering value through your brand promises.
The Caveat: Don’t Take Loyalty For Granted
Does that mean they no longer care about the value of their transactions with you? Of course not. That’s actually a danger point: Some companies do an outstanding job of building formative relationships only to take for granted the customers with whom they’ve built them.
Be warned: Just as we expect the most loyalty from those people in our lives with whom we have the most intimate relationships, customers expect it of those brands with whom they have the most intimate relationships.
Assuming your customers’ loyalty, that they will always be there, is the marketing equivalent of assuming the same of your spouse or partner. Taking others for granted leads to betrayal of the trust they have given you.
Also just like personal betrayals, those who betray their customers’ trust bear the brunt of the fury betrayal fosters. You do not want a messy divorce with a customer who believes you have betrayed their trust (talk about bad word of mouth? — I’ll discuss that more in a couple of weeks).
On the other hand, loyalty begets loyalty.
Building Trust, Relationships, and Loyalty
Loyalty begets loyalty. To earn loyal customers, you must be loyal to your customers. That means keeping your brand promises and the specific promises you make to individual customers. Only when you have done that consistently through time will your customers really trust you.
Until you get to that point, the point that your customers trust you and think in terms of valuing their relationship with you, rather than the risk of doing business with you — talking about customer loyalty is worse than useless. It is self-deception.
At the very most, you have a satisfied customer, and as Jeffrey Gitomer pointed out years ago: Customer satisfaction is useless. Customer loyalty is priceless: The more your customer expects you will not betray their trust, the stronger will be their preference for doing business with you, instead of your price-competing, untrustworthy competition.
The more they trust and value you, the less price-haggling and shopping around they will do. The less price shopping they feel compelled to do, the more they will share you with their friends: That’s a risk in itself and requires that they trust and value you enough to share you, not just to talk about a great deal they got from you.
Customers will brag about any great deal they got but they will only recommend a great brand they know and trust. Same way a significant other comes to a point of introducing you to their friends.
Before that it’s all transactional.
In marketing, that means price competition and customers buying less than they would be willing to buy. . . if only the right brand would come along.
Repeating: Becoming that brand is your opportunity.
What do you think about your customers’ perception shift from risk to relationships? How can you act on the opportunity? Go ahead and leave a note here, or tweet at me.
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I publish a #GrowDemand article each week at noon PST. Next week’s topic is The Economic Nature of Trust Marketing.
Let me know if you’d like me to tweet you the #GrowDemand article link each week. I’m happy to.