Turning $0.40 Into $200.00

Ever have one of those days where you feel sluggish? Everything seems gray, and getting out of the doldrums requires real effort. Sometimes all you need is that one exquisite little interaction with a friend or your child, and the day turns around completely.

Interactions like these, and the emotions we attach to them, are at the heart of being human. In previous columns I’ve talked about how the selling process and buying decisions are intimately tied to basic human emotions. This week, we’ll examine how interaction can be used to add value and thereby encourage more sales.

Please examine these facts carefully:

  • At harvest, coffee sells for about $0.40 a pound.

  • In the futures market, coffee sells for about $1 a pound.
  • In the supermarket, coffee sells for about $9 a pound.
  • At 7-Eleven, brewed coffee sells for about $49 a pound.
  • At Starbucks, a venti double-shot espresso sells for $225 a pound.

Starbucks recognizes it isn’t just in the coffee-selling business. After all, coffee itself is just a commodity and as such can only be priced so high. Rather, Starbucks understands its customers’ needs not just at the product level but also at an emotional level. The company’s success resides in its ability to change people’s perspective about its products, so it focuses not on what the product is but on what it does for them. There’s one word for that: value.

What is your customer buying? Is the Mocha Frappuccino customer buying caffeine-laced hot water, almost frozen then infused with a hint of exotically refreshing chocolate? Or is she buying (among other feelings) the few moments of relaxation — the “permission” to relax — that this coffee variant creates in her mind? Is the male diamond customer buying “color, cut, clarity, and carat weight”? Or is he after the feeling his wife will have when she sees the expression on everyone’s face? Does the bottled-water drinker naively spend the equivalent, or more, of the price of a gallon of gasoline? Or is she buying feelings associated with health and purity?

How do we go about turning a product or service into something of value? The old marketing adage: “Find a need and fill it.” You are already in a fortunate position. When visitors get to your Web site, they have already begun their buying process. They visit because they recognize they have a need, problem, or want. Your only job is to help them fill it.

Distinguish between people’s distaste for being “sold” (which they see as being pushed or manipulated) from their desire to buy. These visitors, people just like you or your mom, arrive at your Web site with questions in their minds. Help them buy interactively the way they want to.

It’s all about creating emotional reactions in customers through interactions with your company, its representatives, and its products. You can’t stop at just satisfying your visitors and customers. You must go that extra step to delight them and thereby provide real value.

Providing value is not something you can do tactically; it’s achieved by tightly focusing on your objectives as you devise your strategy. The number one priority must be your customers. Who are they? How do they recognize they have a need or want? Where and what do they do when they search for information to meet these needs? What motivates them? How do they buy? Remember, customers are selfish; all that matters to your customer is her needs, her wants — not you or your products. Your job is to uncover your product’s value, and therefore your company’s value, in her life.

Once you’ve clearly identified your customers, I suggest creating several (four to six) personas to represent them. Personas are archetypical characters that represent your “buckets” of customers and help you remember different people buy for different motivations and in different ways.

The second priority is thinking about your product. Here is where you will start identifying the product’s features and translating those features into product and consumer benefits. Keep in mind some of those benefits are really about the customer’s internal needs and self-image (remember Abraham Maslow’s “Hierarchy of Needs“).

The third priority is to truly identify the problem you are solving. It’s not uncommon to see even large multinational companies focus on solving the wrong problem. If you are trying to answer questions your prospects and visitors are not asking, you will just appear irrelevant to them; they will click off to your competition.

The final consideration in calculating your product’s value is thinking about your competition. Just the other day I was with a client who wanted to increase his company’s market share in a well-established category (virtually a commodity). We all realized as we answered the first three questions and looked at the competition the client had no effective competition online. Not one of the company’s online competitors was focused on the customer’s needs. They were focused on their own products’ features and how innovatively great the companies are (yawn, yawn). If this marketer can truly begin to focus on speaking to real customers’ wants and needs, clearly articulate the product’s value, and demonstrate how the company’s solution solves the customer’s problem, the company will certainly take its competitors by storm.

When was the last time you carefully examined the value proposition of your products and services? Let me know what you are doing to present value to your customers.

P.S. Do you want to dramatically increase the conversion of your pay-per-click click-throughs? Reexamine your listings and landing pages with a focus on value.

Meet Bryan at ClickZ E-Mail Strategies in New York City on May 19 and 20.

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