Ask WOWEDAMERICA Letters: Options to Compete Other Than Lowering Prices

I received an email recently from a retailer who felt her only option in this market was to drastically cut her prices in order to keep pace with the competition.  She questioned whether there were alternatives. 

My response was there are other options to evaluate.  First, take a step back and ask who are your "Promoters," those customers who, if asked, would refer you to others.  Promoters buy more, pay their bills on time and are responsible for 80-90% of referrals.

Every business knows who they are.  Now, ask why is it they are Promoters - loyal adherents.  I've found that many businesses really don't know the answer to this question.  Here's a three step process to consider. We call it our Relative Perceived Quality Evaluation.

• Either informally or formally ask your Promoters: (1) Why are they Promoters?
• Ask you Promoters: (2) Which touch points along the cycle of service are crucially important? 
• And (3) on those crucial touch points how do you compare with your competition?

Having done this exercise with literally 100s of clients,  I know one thing for sure.  Customers who are promoters never pay the lowest price. And, many times customers are promoters because of "humanizing, engaging or connecting" employee-customer interactions (definition of WOWEDFactor).  In sum, instead of lowering prices, the focus has to be on generating more Promoters!

So, once it's known what a business needs to do to acquire Promoters, the next step is to develop a Promoter Acquisition Plan.

Had a client who, prior to our involvement, did a formal survey.  It showed they had 33% Promoters, which yielded four referrals, which constituted 9% of their revenue in 2009.   After we implemented the Promoter Acquisition Plan, the Promoter number more than doubled to 77%!  And, the number of referrals (and testimonials) increased significantly as well.

Interested in the Relative Perceived Quality Evaluation or the Promoter Acquisition Plan, contact me for a complimentary consultation.

Firestone
firestone@wowedamerica.com
314-863-4000