What Are You Really Selling To Your Customers?
Having clarity within your business is one thing, but are you clear about what your customers want? After all, it is your customers who will make or break your business.
Sometimes small business owners get a little tongue-tied and challenged when it comes to talking to future clients about what their investment will be and what return they will get. Especially when starting out, some entrepreneurs find it difficult to talk about ‘the money side of things’. This is especially difficult if you don’t know what your #1 Big Outcome is.
Investment vs return on investment (ROI) for your customers is about clarity, and the more confident you are about how you get clients from A to B the more clearly you’ll be able to convey this to your clients. Why should people use you and not your competitors?
The Four Fs
There are all sorts of reasons people make a purchase. What are you really selling to your customers? You need to spend time to figure this out.
There are four main types of returns you can provide. These are very important for you to remember and strategise to achieve for your clients. I call these the Four Fs:
- Financial ROI
- Feelings ROI
- Physical ROI – okay, I know it’s not an ‘F’ but it sounds like it!
- Fire in the belly ROI
This one is obvious. If a client invests $100, $1,000 or $10,000 with you, what return will they get on this?
You should be able to answer this easily and accurately – if you can’t, you don’t have enough clarity about what you do. If you can’t establish a percentage return, what is your rule of thumb?
As a rule of thumb, I aim to provide a minimum of ×10 return for all my clients.
The business owner has told the family that when things pick up they are going to Disneyland! What can you do for your client to help with this?
This is going beyond just the financial return on investment. It’s the feel-good factor. It’s about being emotionally charged. A great example is Apple computers; it’s not just about the machine, it’s about the feeling you get owning and using one.
A hair-cut is not going to give you a financial return unless you are a movie star or a model, but you get an emotional return on investment because it makes you look and feel good.
I’m sure you know somebody who spends a lot of money on hair-cuts. Can you make people look 10 years younger? Or can you give them a change of environment? Or change their surroundings or space?
Fire in the belly ROI
This is the most critical return you can give somebody – it’s putting a fire in their belly. This fire is what my clients are often seeking, even though they might not know this.
The biggest drag on most deadwood businesses is not a lack of knowledge or resources but a lack of direction and determination. Once the fire is lit they are off, but they need somebody else to light the fire.
What they are buying from me is purpose. Is this something you can do? The moment you seriously connect and it fuels the rage to just get going, that’s massive.
When you can do that for your client it’s game on.
What about gym memberships? It’s not just about the equipment, it’s about the motivation provided by being a member and hanging out with other like-minded people.
The most obvious return on investment, no matter what you do, is a financial one. The financial return comes from how much money people spend buying from you. Most people will shop around when making a purchase, and a key thing they are considering is price.
They want to know how much they have to spend if they buy from you and what they will get for their money. If your product costs $500 more than your nearest competitor, what are they getting for this extra outlay?
There are businesses that obviously lend themselves to a financial ROI, but you can’t stop there. It’s your responsibility to understand and cover all of the different types of ROI.
This may be difficult but you must push through. You must get to an answer. Think outside the square.
Let’s look at my business as an example; although I can easily point to the financial return people will achieve when they come to me, I know this isn’t the real reason they come, even if they don’t know this themselves.
They want their businesses to perform better so they have money and time to do other things, so they are after a feelings return, not just a financial one.
The extra money they earn will also allow them to improve their physical environment, such as affording to buy a new car or moving to a better office, and the clarity and focus they gain from starting to make changes to their business will provide the fire in the belly.
A feelings ROI can be giving people the confidence to try something new by teaching them a new skill, a physical ROI can be selling things that help people organise their homes or their work.
It’s your responsibility to figure out what it is they are going to get as a return on investment. They may be after something they can’t articulate or they are not even consciously aware of – you must be able to discover what that is.
There are potential clients out there who are yet to come into your circle of influence – why will they come to you? You need to be able to have an open and honest conversation about what it will cost them and what they will receive from you in what timeframe.
Power to you!
CEO, Business Benchmark Group
Stefan Kazakis on 5 May 2018
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