Customers will pay more for what they want than they will for what they need.
Spend time in the marketplace and you’ll have many close encounters of the third kind with the most interesting species in all of nature: the human customer. And as we’ve learned, the nature of this being isn’t much different from other animals: All need to breathe, eat, drink, procreate and survive.
But there is something that clearly sets human customers apart from other fauna: sentience. And one of the manifestations of this self-awareness is that beyond what customers need, they’re the only lifeform on planet Earth that also wants. Your customers want things.
Every human who owns an automobile will need to buy new tires. But what they want is to keep the family safe without spending an entire Saturday shopping for tires. So, if you’re in the tire business, should you advertise that you sell tires, which are commodities that the Big Boxes can sell cheaper than your cost? Or should you develop, market and execute a customer loyalty program that combines peace-of-mind for the customer’s family with pick-up and delivery? How about this tagline:
“Let us help you keep your family safe when it’s time for new tires, and we’ll give you your Saturday back.”
Basically, the hairless weenies of the family Animalia, human customers need shelter, but they want a home. So, if you’re a realtor, should you focus on the obligatory list of residential features and square-foot price analysis, or how the physical setting and interior space fit what you’ve learned is your customer’s unique sense of a home? Try this on:
“Mrs. Johnson, countertops can be replaced, and new paint and carpet are easy. What I want to know is how much will you love sitting in front of that window with your first cup of coffee every morning as the sun comes up over that ridge?”
Like thousands of other warm-blooded species, humans need to eat every day, whether they get to or not. But unlike other animals, only human customers want to dine. If you own a restaurant, do you emphasize the food or the potential for a lasting memory? Check it out:
“Even if you forget how wonderful our food is, you’ll always remember that booth for two in the corner, next to the fireplace.”
Small business success requires understanding these five marketplace truths about your human customers:
- What customers need are commodities driven by price.
- What customers want is anywhere from a little bit more to everything.
- Customers will pay more for what they want than they will for what they need.
- Discover what they need and charge them for delivering it.
- The price war is over, and small business lost.
To paraphrase the immortal Mark Twain, for a small business to sell human customers commodities they need, instead of delivering the much-more-profitable customization they want, is like “the difference between a lightning bug and lightning.”
Write this on a rock … Never mind what they need. Discover what your humans want, deliver it, and charge them for it.