Even today, many companies focus everything on the quality of their products to differentiate themselves from competitors, to find new distribution channels and customers.
Even if at first glance it might seem a correct approach, talking to customers about the quality of their products or services is like talking to yourself in front of a mirror: you are the only one who can listen to you.
In fact, our customers – distributors, wholesalers, retailers – have a more complex “evaluation” system, whose basic elements it is good to know in detail.
If you ignore them, you risk talking in a vacuum. But in business, talks cost money!
Scholars of this subject clearly distinguish the concept of quality from the one of value, and in particular, refer to the difference between the perception of quality and perception of value.
In fact, customers evaluate your product in terms of value, calculating the relationship between costs and benefits compared to their needs.
Requirements that are mostly personal, which are reflected in business decisions.
Some of the experts define value as “the compromise between product quality and price”, or, said it better, how much you received for how much you paid.
Others consider this definition too simplistic, and add that, besides to what is delivered (which represents the value of the results), there are other elements to be considered, such as how the service is provided (the value of the process).
This last interpretation seems the closest one to today’s reality.
Actually, the real problem is not to find a products supplier.
But a supplier who understands – and if possible, anticipates – all the problems relating to the type of service and results required.
It is essential to recognize that customers do not just evaluate the quality of the product and the additional services provided to the price. Still, they elaborate on the entire decision-making process and not only the results.
And they do it by seeking the most favorable compromise between cognitive efforts and decision-making accuracy.
Said it in simple words, it means that they evaluate how much they will have to suffer compared to how much they will want to obtain, and above all, to which risks they will have to undergo.
Does this sentence mean anything to you?
How many times have you found yourself in the situation of having to work with the fear of not receiving the goods in time?
Or worse, than having received goods that do not conform to your order, and having to wait for weeks before placing your products on the market.
Maybe you also had to argue with those who, pretending to be right, make any excuse not to take responsibility and making you waste time.
Of course, after having risked losing your job or a great customer, you have decided to change supplier. But then it happened that soon you found yourself in the same situation as before.
The most severe thing is that these matters, even if they do not depend on you, have repercussions like a devastating tsunami on your customers’ companies.
Which, in turn, do not feel well served, suffer damage and lose customers.
So what do they do?
It is simple, as the perceived value of your supply does not correspond to the price they paid, they begin to complain, asking for discounts, payment extensions and contributions to sales promotions. And so on.
And if they don’t do it right away, you can be sure that they will do it at the next order.
And it is unfortunately like this, because, as is shown by the studies,
the customer evaluates not only the price and the characteristics of your products, but also all the discomfort that he “feels” that will have to face on working with you.
This discomfort represents a real cost, and has an exact classification: it is such a so-called non-monetary cost.
These non-monetary costs refer in particular to time and effort – both mental and physical – and to psychological costs (for example, uncertainty, frustration, anger, fear) incurred by the customer.
The problem is that they are hidden, but they are actually present in the customer’s mind.
This is why the price you ask does not correspond to the price the customer is willing to pay.
Of course, for him, it is too high because non-monetary costs have a negative impact on the costs/benefits relationship.
Do you know how to eliminate these unnecessary and diabolical costs?
Have you ever thought of using a sales system that allows you not only to increase sales and margins but above all to eliminate the costs – material and non-material – in the distribution of your products?
Don’t try to look for it on Google; you won’t find it.
But if you click HERE you will discover the marketing system – specific for retail companies – which I called “More Sales with No Hassles” that helps you on improve retail sales and eliminate unnecessary costs.
Perhaps this time, the solution is truly at your fingertips.
