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Consumer Choice | Understanding Consideration

Posted On - 02/01/2013 12:32:09

Competition isn't just about how cheap you are, there are many other reasons why consumers choose to shop where they do. And if you want to be considered more often by more people, you need to understand what they are and how to use them"Price" matters: search ShopTalk and you'll get over 20 blogs on it. But competition isn't just about how cheap you are, there are many other reasons why consumers choose to shop where they do. And if you want to be considered more often by more people, you need to understand what they are and how to use them...

Mr Smith said I should speak to you

"I win new business by doing good work." Does that sound like you? Whether it does or doesn't it's the reason we often get from businesses about how they market themselves. It means they rely on being able to impress people so much they feel obliged to tell others about it. Yes, it's fabulous when someone comes to you as a result of a recommendation. But this is no way to run a business.

Definitely maybe

Don't get me wrong. You should strive for people to come to you because of recommendations through great work. And in "Are You Making the Most of What You've Got?" we discuss this more. But the problem is not only is it discretionary, it's not something we do culturally:

"I came to you because you're an expert and because you're a local independent trader. So do great work and provide personal service. And if you do thank you – you meet my expectations. You've confirmed I made the right choice and did the right thing. Sure, I'm grateful and will use you again. But tell other people about you? I might if they ask".

No, moving people enough for them to tell others and recommend you is tough. But if you can tap into the real reasons behind why people buy, you'll have more success.

What do you think?

Do you buy based solely on price? Do you ever buy and not care about price? Take bread and milk as an example. A supermarket would certainly sell this at lowest price. Yet have you ever just popped into a local shop to get some?

If you have you've paid a premium for the pleasure. Convenience stores rarely sell cheap. In fact they typically sell at a premium - up to +20%! The clue's in the word "convenience." And you've shown price isn't the be all and end all for you. Did price drive you to shop where you did? No.

Tip the balance

Whether it's a new kettle, replacement tyres, car servicing, the Christmas turkey or double glazing price matters - of course it does - but so do other factors.

The fact you wanted to see the colour of the kettle in person rather than on screen and feel the type of grip it has.

That the guys who fixes your tyres actually talks to you and treats you like a customer.

That your garage takes the time to show you the spare parts it replaced and always adopts a "make-do-and-mend" approach.

That the butcher can get the size of free-range turkey you want and it's Christmas and time to make a point of supporting local.

That the rep who came to discuss your double glazing was the only one who noticed just how large your windows were and asked about the integrity of the building.

Yes, price always matters but a lot of other things do as well. And very often, provided the price is reasonable, it's these other things that'll tip the balance. You've got plenty of them - all the things you do to help people and do a good job count. See "Be Something Else" for more.

Only promoting on price means you have nothing else

It's so easy to be lured into thinking that promoting on price is the "right" way to do things. After all, that's what the big guys do. PC World dominates its ads with price messages. In 2012 ASDA was named as Britain's lowest priced supermarket for the 15th year running. Tesco's strapline is "every little helps."

Everywhere, everyone leads with price. Now, whether they're actually cheaper is a moot point (check out "I Can't Compete!" and "The Target Retail Price Comparison Results" to find out why they aren't.)

But the fact is they do it for one very simple reason: they have nothing else to make people choose one of them over the other. They're all pretty much equally (in)convenient, they're all doing their bit to have helpful staff, they're all stocking the popular brands. But if that's it, what else can they do to attract business? It's simple: promote on price.

Got you!

At our Open Day this year someone said: "I buy car insurance on price." Now, what a great example. Because many of us do.

But my question back was: "How long have you been with your current insurer?" "A few years", came back the answer. "So when was the last time you price checked?" I asked.

He hadn't. He'd assumed the price that had won him a few years back was just as competitive as what he was now paying. Whether it was or wasn't issn't the issue, he chose to stay put. After all, isn't it a "faff" phoning around and re-entering data on different websites? Its simply easier to stick with what you know. It's not worth the cost.

None of this matters: I sell and repair computers

OK. Actually it all does, but OK. And because we always take your challenges seriously, next week I'm going to take you through an example that's just like you - see 'How to Sell Yourself, Your Worth and Value'.We're going to bring it to life using a broken boiler example. Something that's apparently entirely price driven but is in fact nothing of the sort.

Why not do a "computer" example? Well it's simple: your circumstances aren't unique. There's nothing special about what you do that means you've got challenges no-one else has. Frankly it's important you appreciate that. Because once you do and can frame things this way, you can look all around you for examples of how others do things. Give or teach a man to fish?

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