Found an old story I’ve used at marketing workshops in the past, to illustrate a point. In today’s economy, it has never been more relevant, and worth the read:
Imagine your business is a 30-year old barbershop in the heart of downtown in a small town. You’ve become “like family” with most of the town, and you’ve been giving $12 haircuts for as long as you can remember. Several of your $12 haircut customers have brought their kids in, for the next generation of $12 haircuts. Everyone loves you, everyone knows you give great service, everyone needs your service.
Today, the first ever competition opens up…right across the street. Nicer facility, cooler gadgets, and a big banner next to their sign: “Haircuts. $10.” For the next 2 weeks, you watch traffic increase across the street, and even some of your long-standing customers begin sneaking over to save a few bucks and catch a glimpse of “newness” and of course, the $10 haircut. Everyone likes to go where everyone likes to go, after all, right? And save a couple bucks of course.
Every group I’ve shared this story with, and then challenged them to develop a marketing strategy, goes to price first. “Let’s drop to $9.99!” Then someone in the group chimes in, “Let’s advertise, and remind them of our better service.” Others, “let’s add value. Let’s advertise. Let’s do a big stunt, an event (How’d that work, Denny’s?)” . And so on. All to compete with the new $10 haircut.
Stop. At this point, your business can do 1 of 2 things: react, or respond. Reacting comes out of emotion. Response is strategic. The solution we usually finish the group conversation with? Simple…the business hung their own banner, 4 simple words:
“We fix $10 haircuts.”
The point is this: In an economic downturn more than any other time, your customers will be closely evaluating your value equation. It’s too late to compete on price. Either you, your customers and everyone else knows you’re a bargain at any price, or their loyalty was never earned. Either way now’s not the time to create a value equation. You do that with hard work after they become customers. So if your competitors haven’t done it, there’s never a better time to look for those customers ready to make a switch, if you can demonstrate what you promise you’ll deliver. Remember, everyone promises great customer service, so it’s no longer a tiebreaker for customer acquisition, but it definitely impacts customer retention.
This is the greatest time ever to grow your business, if you see your goal as to consistently come up with ways to increase value, surprise and delight customers, and create an unparalleled—not perfect, but overall unparalleled—customer experience. Don’t assume everyone wants the lowest price. At the end of the day, they want maximum value for the price they paid, and they want to know their business still matters to you, now more than ever.
