It’s Not About the Money, Honey

If you think all customers care about is price, chances are you're wrong.
 
Customers pay more for better serviceA recent study showed that even in a downturn, 86% of Australian consumers are willing to pay more for a better customer experience! (StollzNow Research).
 
In fact, customers are willing to pay an average of 8.5% more for a superior customer experience. 
 
“There's a view in business that, in a downturn, all customers care about is price, and that everything else goes out the window when the purchasing decision is made… However we have not found that service is less valued now than was the case a few years ago. In fact, our experience is the opposite: we have found that good customer service is valued equally as much, or even more, in a downturn.”
(David Tudehope, CEO – Macquarie Telecom)
 

What does this mean for your business?

Well, if you provide a high quality service, you should be able to charge a "Service Premium" to reward you for this service and cover the extra costs involved in providing this service.
 
Discounts can sometimes be a great idea to encourage people to try your business for the first time, or to reward loyalty from time-to-time, but once customers have experienced your service, this should be what brings them back for more. If you have to keep discounting, chances are your service is not that great (and should be addressed).
 
In the past it was usually quite difficult to justify charging a Service Premium unless you had a big, well-known brand. But these days positive customer reviews provide consumers with ample evidence of your service levels. In fact, many businesses deliberately direct all enquirers to check their reviews before booking. (This electrician explains how he uses this method to weed out the tyre-kickers and increase his profitability.)
 
If you're aiming for the discount end of the market, fine. But if your aim is to be a niche or quality business, be confident in your pricing and differentiate yourself based on service!
 
It's easy to demonstrate great service with reviews on WOMO.com.au. And if you want to be promoted as a recommended business, take a look at the Happy Customers Program. This gives you a toolkit to attract customer reviews and use them to showcase your business as one that provides great service.
 

Skyler

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