John DiJulius | Customer Experience Blog


Can you really make price irrelevant?

 

Can you really make price irrelevant? I love the phrase Making Price Irrelevant, especially because it sparks conversation and debate. Is it possible to actually make price irrelevant? Absolutely! Otherwise, how have companies like Starbucks, Apple, and Nordstrom dominated their markets when they charge premium prices? What about making price irrelevant does NOT mean that you can double your prices or even raise them 20% and you won’t lose a Customer?  Every one of us is price sensitive to some degree. Typically, with the majority of companies where we do business, we know how much they charge versus how much we can get the same thing for somewhere else. However, all of us have a few businesses we are loyal to because of something that they repeatedly do for us, something they give us that we cannot get elsewhere, or a certain way they make us feel.  We have no idea what their competitors charge, nor do we care. What making price irrelevant does mean is:

 

Based on the experience your business consistently provides to your Customers,

a significantly fewer number of Customers will not be price shopping you.

 

Price wars versus Experience wars – Where do you compete? In the price wars, or experience wars? I prefer to compete in the experience wars where there’s a lot less competition. I have learned something in my experiences as a Customer, a business owner, and Customer service consultant:

 

Many times when Customers complain about the price,

it isn’t because they were not willing to pay for something, it is because the experience didn’t warrant it.

 

Take for instance John Robert’s Spa: I have had a client upset about a haircut she paid $45.00 for, feeling it wasn’t worth it. To make things right, I gave her money back and a gift certificate for her next haircut with one of our senior hair designers, who charges $85.00.  Three years later she is still going to that same hairdresser, who is now charging $100.  At $45.00 she felt she was over paying, but has no problem shelling out $100.00 every six weeks. It wasn’t the price, it was the total experience she was getting.  In fact, 85 percent of U.S. consumers say they would pay up to 25% more to ensure a superior experience.

 

Price is something you offer when you have nothing else.

 

The best way to predict the future is to invent it – In 2013, John Robert’s Spa opened a new location on the west side of Cleveland. What is unique about this location is that upon entering, you may question if you actually walked into a salon. There is no front desk, no computer, no printer, no receptionist sitting at a chair, not even a hostess stand. You walk into an experience area with beauty products displayed on tables that you can test and try on. On another table is a touch screen monitor where you can look for the latest fashion style. There is a concierge that comes to you with an iPad, greets you where you are, and checks you in. The concierge is also able to visit guests while they are getting a hair service, manicure or pedicure and get them their products, check them out, and schedule their next appointment, saving the guest a few minutes after their services are done. While the guests seem to enjoy this unique experience and conveniences, this particular location has the highest retail sales per client, $3.00 more per client than any of the other John Robert’s Spa locations.

 

 

Johnism

 

 Customer service is not a department, it is an organizational mindset

 

John R. DiJulius III best-selling author, consultant, and keynote speaker, is the President of The DiJulius Group, the leading Customer experience consulting firm in the nation. He blogs on Customer experience trends and best practices. Learn more about The DiJulius Group or The Secret Service Summit, America’s #1 Customer Service Conference.

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8 Comments

Absolutely true…so glad I’ve been educated in this mindset. World Class Service is a culture…to embrace!!

Comment by davidmoffet

You are the teacher now! You walk the talk

Comment by The DiJulius Group

I just read the article as a result of Chris’ posting with the ARCSI group. Have signed up for future blogs. Great info, and as Chris commented it applies to many industries.

Comment by Bonita M. Gibson

Thanks Bonita! glad you are aboard

Comment by The DiJulius Group

Fantastic article relevant to just about any industry. Sharing it with Association of Residential Cleaning International members immediately!

Comment by Chris Z.

Thanks Chris!

Comment by The DiJulius Group

Great info. Thx John

Comment by Mark Pardo

Thanks Mark!

Comment by The DiJulius Group




Comments are closed.



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