Competing on price has never been a sustainable concept. The only way to beat your competitor is to make less money. If you a small independent business, competing on price is almost impossible.
In the early 90s, Walmart was one of the most valuable companies in the world. Their business model was based on providing the best price. Yes, they did many other things right, but this was their key to success.
Though, that was 30 years ago. Today the most valuable company is Apple. They are most definitely not the cheapest, but they provide an experience that no one else does.
Starbucks is another example. They provide something that you can make yourself at home in minutes for a couple of cents. But, their secret ingredient is experience.
The experience is so great that people leave the comfort of their homes to work in a Starbucks and pay more for coffee. People want to be seen, socialise and even work in their local Starbucks.
The best advice to a small business owner is never stop thinking about how to delight your customer”Warren Buffet
Experience changes the mindset
I notice two things with most businesses that are winning the experience game. One set delights the customer’s minds, and the other delights their senses. And the best ones are doing both.
Generally, as the experience improves, what customers are willing to pay goes up.
Let’s take a wellness spa, for example. You can usually get a cheap massage in the local mall in most cities. You can also get your nails done at the local beauty salon. But suddenly, when one goes to a wellness spa, they will pay significantly more for the same service.
When you enter a spa, the staff are trained to be especially friendly. The music relaxes you, and even the scents of lavender and lemon grass put you at ease.
Your mind and body are taken on a journey of experiences. At the end of the treatment, you are so relaxed that you are willing to pay anything. Even it if ends up costing you more than you expected, would you be able to complain to the friendly staff who speak in whispers?
Giving customers the right experience can change their mindset completely. For example, the same person will pay for a $1000 Gucci handbag without complaint but try to haggle over a 5% discount on rice in the local supermarket.
When you provide the right experience, you can change people’s behaviours and thus their spending habits.
Now I mentioned earlier that there were two things you want to do. The one is to delight their senses, and the other is to delight their minds.
I will give you a few examples here of how that can be done.
Delight their minds
Because as our towns and cities evolve, we no longer have the same community that once existed. People still tend to seek this out, and one of the ways to fit in is to buy the same brand and go to the same places. People who support the same football team can meet at a bar and get along instantly as if they were long-lost family members.
When people go into the local Starbucks, they feel the same. They are part of a community of like-minded people. The same thing happens when people buy the same brand, whether Nike or Apple. So think about creating that sense of community when people come to your store.
When something is convenient, we will happily pay a premium for it. Think about 24hr stores that are usually more expensive than traditional stores. Or your favourite food delivery App. They typically have the same item that you could pick up yourself, only more costly. But it is so convenient for you to sit on your couch and push a button that you willingly pay a premium.
You do not have to do home deliveries but think about everything in your store and how you can make it more convenient. Simple things like having their order ready before they arrive or offering multiple payment options make things convenient. Even your location from their home is a convenience factor.
There will be significant interaction with you or your staff in most small business settings. No matter the customer’s income level, everyone wants to feel respected. You may not be able to offer them the best price, but you can offer them the friendliest experience for no cost at all.
Create a culture with your team to understand the importance of making your customers smile. If you want your staff to make your customers happy, you need to make your staff happy first. Friendliness is infectious. If you treat your staff well regardless of the situation, they will do the same when meeting your customers.
Delight their senses
Delighting your customer’s senses is usually easier than their minds.
Sight – Some businesses go to great lengths to create a beautiful storefront and welcoming setup. Others have a stack of items on dimly lit shelves. If your store looks unappealing, I can bet you that customers will be more willing to complain and negotiate you down on your price.
A simple thing you can do is just improve the lighting to make the store more attractive.
Smell – Walk into a coffee shop or a bakery, and the alluring aromas make you want to spend money. The scent goes from your nose to your tummy, to your wallet and bypasses the brain completely. If your store does not naturally create a welcoming smell, make it yourself. No matter what you are selling, your customer will still want to come to an inviting store, even if it is building materials.
An easy way to do this is with a cheap diffuser or simple aroma candle.
Hearing – The type of music you play will directly affect your customers. Upbeat music will make them happier. Calming music and fast-paced music will also affect them. If you are trying to get customers through your store faster, play some high-paced, energetic music. If you want them to spend more time and thus money, play something to relax them.
A fine dining restaurant may want slow-paced music to keep their patrons there longer and thus buy a dessert or an extra bottle of wine. In contrast, a fast food joint where you can generate more income by serving customers faster will find that high paced music works better.
Taste – it’s obvious that if you are serving any kind of food, the food should taste good. So a simple thing you can do in any store is to give customers some sweets after a purchase regardless of what you sell. I found that they did it in a paint store, and it left a delightful taste in my mouth afterwards.
Touch – people like to touch and feel the product. Once they have touched it, they feel a connection to it somehow. So try to create an environment where the customers can touch and feel the product, even if it is just the box. This is probably the toughest to achieve in all businesses, but touch makes a difference.
It’s usually free
Once you have delighted all their senses and minds, the customer is no longer considering the price. Instead, they are more than willing to pay for this experience.
Think about your own business and how you can improve the experience either using these examples or thinking about a unique way that works for you.
Delighting your customer usually costs you very little to nothing but can make a huge difference in how much they are willing to pay.
After all, if you keep delighting your customers, you will keep growing your business.