Consumers Buy More for Great Customer Experience, Not for lowest price

October 30, 2010 How to Sell Online

The goal of every business is to be profitable; however, in today’s global economy customers have a wide variety of choices, as it pertains to products and vendors. Resellers who choose to compete on price are headed down a slippery slope towards increased competition and dwindling profits.

In order to be successful in this new economy, resellers must focus on serving the customer better than anyone else in the marketplace. By providing customers with a great buying experience, resellers will move one step closer to solidifying a bond with the customer and increasing profitability simultaneously.

Where Have the Customers Gone?

Customers rarely disappear from the marketplace; instead they choose to take their business to another vendor. Therefore, if one company loses a customer then another company has just gained a customer. In order for resellers to increase profitability, they need to make sure that they are gaining more customers than they are losing.

You are training your customers to ask for lower prices

If resellers opt to compete on price, then they are subconsciously training their customers to expect the lowest price. The problem with this strategy is that it will always be expected that the reseller continue to lower their price in order to be the lowest priced provider. In the event that the reseller is unable or unwilling to lower their price on a particular product or service, it opens the door for the customer to take their business to the company that will indeed offer the lowest price.

This business model forces resellers to continue to lower their prices in order to gain new customers and retain current customers. As time progresses, resellers will be working harder for less profits.

The Real Reason Customers Leave is Shocking

The US News and World Report claims that the average American business loses 15% of its customers on a yearly basis.

It was also reported that:

– Out of the 15% of customers who stop doing business with a company, 68% of them stop doing business with the company because of “poor or indifferent customer services”.

– Another 14% stop doing business with a company because of “unsatisfactorily resolved a disputes or complaints.”

As you can see from this report, 82% of a company’s lost customers are a direct result of a customer service related issue.

The shocking fact that this report was that, only 9% of customers stop doing business with a vendor because of price.

This report provides overwhelming evidence that service is much more important than price, and any reseller who chooses to focus their attention on providing an exemplary customer experience is more likely to keep their current customers and retain any additional customers that they receive from vendors providing a subpar customer experience.

Don’t work harder, but work smarter

As you can see, not only is competing on price a losing game, but it clearly is not the most important factor in the minds of customers. If resellers make the commitment to change the paradigm of their business from a price-centered business model to a customer experience centered model, they are sure to increase their profitability by solidifying a bond with their customer base, and consequently lowering their customer attrition rate.

American Business business Business Model Choices Consumers Customer Experience Customer Profitability customer service Drop Shipping Global Economy

Consumers Buy More for Great Customer Experience, Not for lowest price

Where Have the Customers Gone?

You are training your customers to ask for lower prices

The Real Reason Customers Leave is Shocking

Don’t work harder, but work smarter

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