What can I do if the customer judges me purely on the basis of price? Avoid the ‘downward spiral’.
by Alberto Aleo
“What are you selling?” It may seem strange, but if you ask any salesperson this simple question it’s likely they will be hard put to find an answer. The first reaction will be one of surprise as they ask themselves if you’re making fun of them; then when they realize you’re serious, they’ll probably start listing products and services, perhaps even giving product codes and prices as if to say, “You thought you’d catch me out, but I’m ready for you!” At this point I suggest you up the pressure and ask emphatically, “Are you really sure this is the only thing you’re selling?”
Chasing the intangible
If you have asked the previous question likely you are now finding yourself faced with a variety of reactions, ranging from astonishment to anger. Your unfortunate interlocutor may start yelling , “Of course! Who do you think you’re talking to? I’ve been doing this job for twenty years.” Or else, he/she might pick up the phone to check that nothing new has been added to the company’s product list. Those with more savvy, who think they know what you’re getting at, might answer something like, “No, we sell dreams as well”, or pull out some similar line.
The truth is that many companies have only a partial view of what they sell and, therefore, of what customers are looking to buy from them.
They consider their offer as a list of products and services, forgetting that it is a set of components, that are both tangible and intangible, and that these are organized hierarchically based on their strategic importance.
A Case History
Let’s take a look at some of the elements in the offer system of Fiat cars on the US market to understand how the hierarchy changes within the system, according to the market in which you are operating and the customers with whom you are dealing:
- the cars;
- the dealer selling these cars;
- Italian style, to which the brand image is linked;
- the design;
- the figure of Sergio Marchionne (who is popular also in the US);
Which of these are more important? Which elements enable Fiat to stand out on the market and are essential if the company is to maintain its identity?
If we were considering Fiat’s offer system in Italy the answer would be obvious: the cars! In the United States, however, the company only sells the FIAT 500 range, “little cars” that would need an extra few feet of chassis and a much bigger engine to be considered as a serious automobile by any American. So, what does Fiat sell in the US? You need only watch one of the company’s adverts to grasp the answer: they are marketing Italian style and the Italian concept of life and relationships. If Fiat had placed the emphasis of its offer system on the cars themselves they would be competing on the same terrain as competitors whose products have far superior features (at least for the American market) than the FIAT 500. The choice made by Marchionne and his team means that the company has prepared an offer that has very few rivals; the company’s sales has proved this to be a winning choice.
Analyzing the Offer System
To analyse what your company is selling, therefore, we suggest you undertake the following exercise: imagine you are a customer who has never heard of your company or your products and ask yourself what stages any such customer would go through in the experience that would eventually lead them to contact you, and then to go on to make a purchase. After that, go beyond the purchase stage and try to understand what might vindicate the customer’s choice when using this product and encourage him/her to buy from you again.
The “story” of your customer’s experience will feature different tangible elements (products, spare parts, services, website, shops, …) and intangible assets (communication style, relationships, values, image, history ..) which together constitute the offer system.
What, within this list of elements, most strongly guides and supports customers during the purchase or builds loyalty in the relationship with your company?
The answer to this question will highlight the priority elements of your offer system, i.e. the elements you should emphasize in your sales relationships. Remember what we said earlier: different customers and different markets may have different “stories” and thus require a specific offer system or one where the same elements are organized differently, prioritising something that might appear less important in a different context. You’ll find that often the customer’s choice will depend on elements beyond what is being sold physically and actually involving your style as a seller, the decor of your store, your company history or the way you present your goods.
It’s necessary to analyse the consumer experience, have supporting data and ask customers a whole range of questions in order to understand what they are really buying from you and why.
We can assure you that after this in-depth analysis, your sales arguments will be much more persuasive, your advertising investments more focused … and your customers more satisfied!
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