Never assume your customer wants a cheap deal

Never assume that your customer wants a cheap deal

The need to know exactly what market you are in and what your customer is really expecting from you was driven home to me recently by two examples of customer reactions from two of my clients.

The first involved a friend of mine who went to a very up-market restaurant in Auckland about a year ago and said that she would never go back.. However she was taken there as an invited guest of a party which was dining there and afterwards completely raved about the restaurant to me and how it had changed. Unbeknown to her the restaurant was one of my clients so I asked the owner what had changed over that period. She told me that the menu was exactly the same, the chef was the same; the only change was that she had increased her prices.

The second example involved a retail client of mine who sells top quality jewellery in one of the more prominent suburbs in Auckland. When I spoke to her late last year I had observed that her margins were being eroded and I found that she had been discounting to her customers. I advised her to stop that practice and return to full retail. In fact she did more than that she put her prices up. The result now is that she has more sales, she has happier customers and she has more customers coming back for return sales.

So what is the message from these two examples? First of all everybody in business should know their market i.e. the market where 80%of your turnover comes from. Secondly you need to position yourself in that market and for that market only. And last - give them exactly what they want. In the two examples above the businesses were probably pitching themselves to very similar markets and they demeaned themselves in the eyes of their customers by selling themselves short. That particular market expected great quality, great service and were prepared to pay megabucks for it. And when you are servicing a market like that you are far better to add value rather than drop your image in their eyes.

And by the way don't assume that these examples are peculiar to the Auckland market. I have personal experience of retailers in country areas assuming that I was not prepared to pay a higher price for something I really wanted - stupid isn't it!

Graham Hawkes
Profit Strategist

Check out our website www.profitline.co.nz for great ideas on how to make more money from your business

ENDS

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