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 Is there an easy way
to make the competition irrelevant? In an age with so much
access to information, bombarded by advertisements and
commercials, is it possible to keep the attention of your
potential customers? What is the secret to help customers make
an easy decision to buy? There is
a secret formula that works for
e-commerce, retail, bids and proposals. It is a simple
formula that has worked since the days of bartering beads, beans
and burrows.
Create
Differentiation
Create differentiation
within your own products or services. If you have an assortment
of products or services to offer, you may have identified your
differentiation already. Common examples of differentiation for
products may be based on size, speed, color, components,
combinations or accessories. Common examples of differentiation
for services include speed, performance, quality,
responsiveness, availability, ease or integration. If you are in
the unique position of having only one product or service to
offer potential customers then you should consider accessories,
partners or other options to create a variety of levels from the
perspective of your future customers. If all else fails, you can
offer different levels of shipping speed or delivery.
Focus
on the Moment of Truth
Focus on the moment of
truth, the place or position that your products or services will
be offered to the customer. In a retail environment this may be
the end-cap, a wall display, shelf space or a counter display.
On the Internet this may be an on-line store, e-bay or your
personal web site. It may be in a catalog or a brochure. It
could even be part of an email communication. Occasionally the
moment of truth may be in the form of a bid or proposal after
several months of discussions with a potential client. The
moment of truth is the moment that the customer has a an option
to make a purchase decision, to buy your products, invest in
your services or hire you. This is the moment that you need to
put your good, better and best foot forward.
Good, Better and
Best
Give your customer
three options. Show them something good, show them something
better and show them your best. It is a simple formula that
takes a little care and
creativity in crafting your message. The three offers should
be based on the foundation of a consistent theme, the single
most important underlying reason to invest in your products or
services.
The 'good' product or
service should be the lowest cost option but still
demonstrate your inherent value and
differentiation from the competition. You should be able to
clearly define your value, the features, advantages and benefits
of what you have to offer. This is the customer minimum
investment to buy, and it should be a good one.
 Step up to better.
Using the foundation established with your 'good' offer, add
something more for a slightly higher price. The
customer value
should be easily distinguished and highlighted as more
significant than the slightly increased price. Make a clear
comparison to the "good" product or service. This should be a
preferred alternative for the potential customer. The option
should be slightly more expensive, but worth it. Some examples
may include, "with additional 1GB memory", "includes six months
of Satellite Radio", "bundle package includes download of 50
songs", "50% faster than the original", and similar comparisons.
Show them your best.
The third option should be the best that you have to offer, the
cream of the crop. This is the most expensive option and will
only be selected by the most exclusive of customers. It should
also have something in common with the original "good" option
and the "better" option, but the third and final option should
be recognizable the best you have to offer. The price may be
significantly higher than the other two options, and that is
fine. Demonstrating a significant leap to a higher price point
for the top of the line option will help to differentiate the
cost value of the other two options. Do not expect large volume
of sales on the best offer. Rather, use this to demonstrate
competitive advantage and differentiation with the "wow" factor.
Even if you have
hundreds of customized solutions or products, select and present
three options, good, better and best. In the decision process,
human beings can easily compare and contrast three options. The
mind can juggle three prices and three sets of features for a
quick and easy decision process. Once you add a fourth element,
the customer needs to start a deeper level of analytical
comparison. If you have too many options then the customer will
need to spend more time to consider the alternatives, and while
they are weighing your multiple options they may start to
consider the competition as well. Limit your presentation to
three options. If the customer makes a specific request for an
alternative, then provide the alternative that the customer has
requested, but avoid introducing too many new variables unless
asked. The more factors in a decision, the longer the process
and the more likely to turn your "Moment of Truth" into a Lapse
into Confusion.
 The Value
Proposition
For each option that
you present to the potential customer, provide a
value proposition. Your value proposition should be
something that can be conveyed in three to five bullet points,
three to five sentences, or spoken in thirty seconds or less.
You should be precise and succinct. Present the value
proposition from the customer point of view. For example, rather
than say "we ship in three to five days", you could say "the
product will typically arrive at your door in three to five
days". Rather than say "we have the fastest process", you could
say "our process is fast, so you get results faster".
A
value proposition typically contains the essential elements
of Feature, Advantage, Benefit, Image and Offer. This is a
reference to a specific important feature of your offer, the
advantage as compared to the competition, and the benefit to
the customer. The Image refers to a photograph or diagram.
The Image is an important element of your value proposition,
as people will generally remember an image more readily than
words. Images convey feeling, and typically depict a
lifestyle example of the customer enjoying the benefits of
the feature's advantage. The Offer is a call to action. Give
your customer an offer to buy, and let them know
specifically how to conduct the purchase. Examples of the
order call to action are "buy now", "limited time discount"
or a number to call to place the order by phone.
An example of the
value proposition with the essential elements is "Call now
to order the self-cleaning home brew coffee maker and start
enjoying fresh, hot coffee with the extra convenience of no
fuss, no muss and no clean-up. Order on-line to receive your
free sample of assorted coffees, available while supplies last."
All we need to complete this enticing offer is an image of hands
gently caressing an aromatic steaming cup of coffee, cradled
over a saucer.
Plan, Do, Measure
and Adjust
Carefully plan your
three offers and the value proposition for each. Once you
introduce your three offers, measure the success rate of each
option by the corresponding sales attach rate. Typically the
"good" offer should be about 25% of your sales, and the "best"
offer is normally only 15% of your sales. Some customers will
want the lowest cost option, and some will want to be exclusive
and purchase the best option regardless of price. The middle of
the road "better" offer is customarily the lion share at
60% of your total sales. Most customers are willing to pay a
little more for quality, speed or convenience associated with
the "better" offer if presented properly, even if they do not
want to pay the high price of the "best" option. The "better"
alternative gives customers a chance to do a little better than
"good", but still feel that they saved money as compared to the
outrageously priced "best" option.
If you do not
experience the desired result in mix of sales then it may be
necessary to adjust your plan or your value propositions. In any
case, as long as the customers continue to make a selection
between your options, the competition is irrelevant. Your
customers can get what they want, and they will
remain your customers.
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Words of
Wisdom
"No computer network with pretty
graphics can ever replace the salespeople that make our society
work." – Clifford Stoll, Silicon Snake Oil
"You can only cure retail but you
can prevent wholesale." – Brock Chisholm
"Give your customer three options
that they can compare without memorization. Make it quick, make
it easy, and add value. – Just like that."
– John Mehrmann
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