Wednesday, July 19, 2017

The profitable customer is a relational one.

Imagine you're in the supermarket aisle and you have to choose a product among a mountain of choices that all do the same thing.
Two are highly recognizable brands.
The same two are perceived equal in their ability to get the job done.
They are not the same price.
Which one do you buy?

The simple answer is, it depends on the buyer and your motivations.

Yes, you read that right, I didn't say it depended on the product.
The product is relatively unimportant. 
It's the buyer that business needs to focus on.

There are two types of buyers: Transactional and Relational.

Transactional buyers will sacrifice their own young for a deal. They chase the cheapest price and will drive by 5 gas stations to save one cent per litre. They are proud of their buying bravado and brag to their friends about the beans they've saved.

Relational buyers do not price shop. When they need a product, price plays a role but it's a low factor on their decision to buy.

Relationships aren't held with commodities. 
Walmart visits aren't exciting shopping experiences. 
We run in, get what we need at a cheap price and get the heck out.  
Commodities are bought and sold based on price. 
That's what makes Walmart successful. 
Price is the only thing that matters in the decision process.
The cheapest product wins.
The transactional shopper gets excited.
Everyone is happy.
Except the relational shopper.

Walmart closed 236 stores in 2016. 
Transactional shoppers are cheating on Walmart in search for cheaper options online.
Walmart doesn't have relational buyers.

Relationships are harder to break. 
The relational shopper accepts the devil she knows. 
The fear of changing brands is greater than a perceived benefit elsewhere. 

One of the reasons it's so hard to launch a start up business is relational customers already have their place.
Convincing them to try your product is easy. Most people are curious enough to try anything once.
Convincing them to switch their buying habits is like tearing off a finger.
They don't quit their current relationship unless they aren't getting what they want from them.

I know a business that guarantees to save its business customers upwards of $50,000 per year. 
Surprisingly, they don't have that many customers.
The transactional customers spend all day saving money and don't think anyone can do a better job than they are already doing.
The relational customers are happy with the level of service, the camaraderie of the sales rep and the value proposition currently being provided. Going golfing with their sales rep and getting a free trip to Mexico in March has more value to them than $50,000 per year. 

The relational customer won't switch until the current provider pisses them off. 
The relational customer doesn't believe the claims about the amount of money on the table.
The relational customer is married to other suppliers and does not accept a simple claim of money saving.
Remember it's not about the money for relational customers.
The relational customer is the best customer to have.

To get them, stop talking to them about savings.
Go after their heart.
Don't talk to them about savings.
Take them out for a date.
Get to know them.
Show them a good time.
Get them to like you.
Get them to feel what a relationship with you COULD be.
Create a feeling and you have a half chance to pull in the relational buyer.
And get ready for the angry divorced supplier to try to pull them back, with prices, incentives, and eye candy.

Reach a transactional buyer with prices.
Connect with a relational buyer with belief.

No comments:

Post a Comment