Best and Highest Use® is when you look at your company and its impact on your customers. Is it still helping resolve their pain, achieve their opportunities, and succeed as much as it used to?
Or despite continuing to deliver more and more are your customers paying you less and less?
Watch my video on Achieving Your Best and Highest Use®
Filed under: Business Growth, Profitable Growth, Top Line Growth
Pricing has always been one of the greatest games in business. In times of scarcity, this is ever so true. The price you offer has to reflect value, convey trust and cover costs of sales, delivery, and unfortunately, collections. And you have to be able to get your price.
How do you know when a price is right? Let’s say that you meet a prospect for lunch in an attempt to close a deal. When you finally come to the point of stating your price, one of three things happens:
• Your prospect immediately says no, stands, and walks away.
• Your prospect immediately says yes, shakes your hand, and treats you, the waiter, and everyone at the surrounding tables to champagne.
• Your prospect contemplates the offer. The long silence feels like an ocean in your head until you hear that magical word: Yes!
In two of the three situations you closed the deal, but only in the third have you done it right. If the prospect rejects the offer out of hand, he believes the price is too high, which means that you have failed to sell the benefits of what your company provides. If the prospect takes the offer immediately, you have given away too much value for too low a price; your prospect feels like he’s discovered a Van Gogh original at a garage sale! You know you’ve got it right when your prospect accepts your offer only after some deliberation. In this case, he knows the value he is losing if he says no. Ultimately, your price is your demonstration of value. If you are getting your price in difficult times, congratulations, for you are truly valued for your value.
Before the great recession, business trust was easier to earn and bestow. Taking a chance on a new vendor or offering your prospect a sweetheart deal was good business and could be fun. There was a stronger connection between gaining a one time buyer and turning him or her into a loyal customer. These days, earning small business trust is harder so knowing the triggering events in your business is ever more critical. So what is a trigger event?
There is that moment in a new relationship when two people, formerly strangers, share an expectation of being together every Saturday night. The new toothbrush in the medicine cabinet … Brunch with the parents … Wandering together into a jewelry store and ending up in front of the diamond rings. Coincidence? No. It’s a trigger event.
Trigger events signify relationship milestones. In terms of prospects and customers, we can locate common triggers in order to predict behavior and offer them what they need when they are ready. Common trigger events include:
• The third sale
• The second problem (resolved to satisfaction)
• The fourth reorder
• The third season
• The second referral
These vary by industry, so you may find a different pattern with your customers. Study your data and nail down typical buying patterns. Begin by defining which products or services:
• New buyers are likely to choose first.
• Encourage the most return purchases.
• Are one-time impulse buys.
• Are most popular with existing customers.
In an age where relationships take longer to build or repair, understanding what triggers business trust and thus customer loyalty is ever more important. Know your customers’ trigger points, focus on building their trust and you will earn their loyalty.
What do Eddie Van Halen, Reverend Billy Graham, and Hugh Hefner have in common?
All three built award-winning multi-million dollar enterprises and turned them over to their children. Wolfgang Van Halen, Franklin Graham and Christie Heffner have all assumed control over what their parents started. Wolfgang can play guitar and arouse groupies as well as Eddie ever did. Franklin has expanded his father’s legendary church foundation and Christie ran Playboy Enterprises for 26 years. If these disparate families have all enjoyed successful transitions why can’t you and your child create the same success?
If you hear yourself say, but business and family is different, you may be right. Here’s why.
It may actually be tougher these days because not as many few children want their parent’s businesses. Assuming you’re not a rocker, preacher or flasher, your small business may just not be that much fun or as interesting. Would you go into your business if you had the choice to do so today? And with so much turbulence and uncertainty, would you make the same sacrifices or learn the new skills your business needs to profitably grow forward?
Many owners’ children I know have missed out on the benefits of a life of adversity, and while they enjoyed an adolescence of privilege, they understand they face a future full of unexpected challenges. But I am sure that Wolfgang Van Halen, Franklin Graham and Christie Heffner would say that it was the same for them.
So what lessons can we learn from these famous offspring? They:
Were never denied their heritage or status and when they decided it was time, they actively demanded leadership and were groomed for it
Took many of their best practices from their parents and clearly executed them in new markets and methods.
Faced crises their parents never did and restructured their organizations in order to take their businesses forward.
The simple lesson seems to be, that if and when your children want your business let them step up and ask for the responsibility and authority to run it. If you believe your child has the right stuff, hopefully they will come to believe it too and in time to let you plan to let you both plan for a smooth handoff. And while it’s unlikely they will be rockers, preachers or flashers, you never know and can only hope they make good choices like you taught them.
When we were asked, that is, before the Great Recession, “How’s business?” we were taught to respond, “Good, but could be better!” Now, its, “Better, but could be good!” But even worse, just asking, “How’s business?” these days can all but start a political argument!
How many of the following reasons have you heard an owner use for why business is down?
2. Buyer Inertia
3. The Deficit
4. Buyer Confidence
6. Buyer Trust
But while grousing is understandable, how serious can we be if we picked any of the odd numbered reasons? Aren’t these really excuses?
Does your buyer really say or believe they’re not buying from you because of Obama, the deficit or taxes?
No! And even if it was true, how can you influence these reasons?
If you picked the even numbers, congratulations, you are self-aware and willing to accept that your actions can influence your results. Why? Because you can influence your buyer’s inertia, confidence, and trust. Here’s how:
2. Inertia is the greatest enemy of creating change and results. If your buyer can avoid risk through inaction, they well may. Your recourse is to convince them that their pain of not changing is greater than their pain of changing. Help your buyer to connect their inactivity to poor results and instigate the epiphany you need them to have.
4. Buyer confidence is the fuel of our economy and your success. Remind them how their prior actions created their past success and how much control they really do have over their destiny. Modify your product, service and message so it reinforces your buyer’s confidence as much as possible.
6. Trust has been a casualty of our great recession. Ronald Reagan used to say, “Trust, but verify.” Give your buyer opportunities to verify and even shift their risk onto you if you both can afford it.
Small business is at its best when courageous owners take personal responsibility for their success.