Customer Loyalty Vs Customer satisfaction

When walking into a car dealership, why do people see the price on a car but still ask the question “How much does this one cost?”. Asking “How much is it?” is the second biggest buying signal on the planet. “I’ll take it,” being the first. By asking "How much is it?", I’ve basically told the seller that I want to buy what he’s offering. More than 90% of the sellers will say something like, “I’m asking £12,995 for it, but I’ll give it to you for £12,495. Now maybe this is a ploy on the part of the seller to make me feel like I’m getting a bargain, but the bottom line is he just cut his price by £500 as an incentive for me to buy.

My real incentive was I wanted it, and I was willing to pay £12,995 for it!

A small percentage of dealers will say, “I’m asking £12,995.” and I’ll say, “Is that your best price?” or I’ll say, “Is that your cash price?” and then the bargaining begins.
There are a small handful of dealers who will look me straight in the eye and tell me that £12,995 is their best price and some people will pay that. The same guy who reduced his price by £500 could have had more money if:

1. He had just changed his language.

2: He had changed his manner.

3: He had more self-confidence or belief in what he was offering.

4: He hadn’t developed the habit over the years of having to bargain over the price with each customer.

The bottom line in the Automotive industry is that it’s a supply/demand marketplace driven by both desire, perceived value, actual value, and pride of ownership.

So what’s this got to do with your selling structure or strategy?Well the price process of the automotive dealer is no different to yours. Your customers ask for discounts, and the first thing you do is try to figure out how low you can go while still making a profit, and complete the deal.

Big mistake. Regardless of your thinking (because many people think that their product is becoming a commodity), if you were able to stand your ground by proving your value, and having your customer think that the value was there, not only would you earn your price, and get your price, but you would also have the beginning of a mutually respectful relationship that will end with customer loyalty rather than customer satisfaction.

REALITY: More than 74% of all people are willing to pay the price. Ditch the other 26%, let them hammer your competition into no profit and bankruptcy, and concentrate on the customers who are willing to pay for a Good quality product and service.

THE SECRET: In order to get them to pay your price, you have to know which ones are willing and which ones are not. This requires engagement. Often when I ask a dealer, “How much is this?” he begins with a story rather than a price. A story of what the piece is, where it came from, why it’s unique, what gives it value, and why it’s worth owning. He’s proving the worth or the value by telling a story. The stories are not only compelling, they’re meaningful and actually heighten the desire to buy.

CHALLENGE: What stories are you telling? What value are you proving? How deep is the engagement with your customer?

REALITY: If your engagement boils down to a proposal, or if your main contact is a purchasing agent or someone in a procurement department, you lose. Even if you win the order, you lose the profit.

These and other questions answered at rob@tygamarketing.com