People, when they go out to buy anything, on average, don't really want the lowest price. You can verify this fact for yourself anytime, just by counting the cars that go by. All you need to do is notice that not everyone drives a Chevy Cobalt, a Rio or a Hyundai. Did you know that in a given supermarket, Coke and Pepsi combined outsell the store brand cola by a margin of about 12 to 1? And unlike cars, there just isn't that much difference between Coke and Big K Cola. People don't want low price...they want low risk. Let me tell you what this mean. Let's say you're taking a road trip and you want to eat lunch. You come to an exit in the middle of nowhere with a Bob's Burger Barn on the right side and a McDonald's on the left side. Where do you go? You drive back over to the other side of the freeway to get to the McDonald's. Why? Because even if you don't like McDonald's, at least you know what to expect. It's very low risk.
What about store brand soft drinks? They might be really good! They could be terrible! You don’t know and I don't know! What’s more nobody cares, it's only 85 cents more to get the national brand. You already know you like the national brand. Who knows what the off-brand tastes like...not only that, what if my friends laugh at me when I serve them Big K instead of Coke when they come over on Saturday night? Come on, what's this Hy-Top Lemon Lime Soda? Where's the Sprite? Sprite! Serve Sprite, at only 85 cents more, and you don’t have to worry about the gossip all next week.
We’ll let you in on a little secret. In your business, you’re much more likely to be the Bob's Burger Barn of your industry, than the McDonald's. Now, don't take that as an insult. You might actually be much better. Your INSIDE REALITY might just be better than the McDonald's in your industry, but here's the point...the customer doesn't know. It's a high-risk situation for him to try you out. And for all of you out there reading this and thinking, "Hey, you just don’t know that, we are the recognized leader in our industry. We are the McDonald's." All I have to say is "Apparently not. If so, then do you already have all the business you want or is there more to be had?" There's always somebody out there who thinks that one of your competitors is better than you are - and it could be any of the three types of competitors: direct, indirect, or that old business killer - inertia. What's interesting is most businesses, just like Bob's Burger Barn, figure that they ought to get their fair share of business just by sticking their sign up on the road with the combo meal specials on the marquee.
Not too long ago, we were in the market for a new phone system. I did my research and found a company that sold a product I felt comfortable with - and even though it cost what seemed to be a lot of money for a phone system, it was still within our budget. If you've ever bought a sophisticated business phone system, you know it's not something you just order out of a catalog. There's a fair amount of planning that goes into getting everything squared away and ready to install.
I went through this process of negotiating, evaluating, planning...and finally had just about all the details worked out and was ready to go ahead with the purchase. Right at that point, I had a guy with another company call me and ask me if he could give me a quote on a phone system. One of our account reps had helped this guy with some advertising and when he found out we were buying a phone system, he insisted that we should at least let him give us a bid. Hey, he'd spent money with us so we ought to give him a shot, right? I'd never met the guy, but agreed to let him stop by and introduce himself. When he got to my office, I was shocked. I thought I had the missing identical twin of Rodney Dangerfield standing in front of me. He had the same goofy look on his face as Rodney, plus the wide collar Hawaiian shirt and gold chain necklace to complete the look. He looked like he was late for a gig in a sleazy lounge in Vegas. I thought, "Wow, this guy sells phone systems?" He told me that he appreciated the chance to bid on the phone system and that if he couldn't beat the other company's price by at least 30%, I shouldn't even consider doing business with him. Out of politeness, I consented to his faxing me a proposal the next day. The next day he faxed a quote for a different brand and sure enough, it was about 30% less than the original vendor's. So who do you think I ended up buying the phone from? The Rodney Dangerfield look-alike? Not on your life. I went with the original system that cost 30% more - or in this case, several thousands more.
Why? The risk was too high. Don't you wonder about a system that's 30% less expensive than what everyone else is selling? Wouldn't that make you a little nervous? Do you really want something as critical as your business telephone system to be supplied by some weirdo selling off-brand stuff? Of course not.
Now, I'm not saying you are a weirdo selling off-brand stuff. I'm telling you this story to make a point about people's aversion to risk. But realize this...because of the confidence gap, any time a customer does business with you - particularly for the first time - there is a certain amount of risk involved. In your business and in your advertising, the best way to lower the risk is... to lower the risk.
We worked with a client one time that sold a non-insurance health benefit card that would allow a person to receive substantial discounts on dental, vision, and prescription services. You're probably familiar with this type of product. They sold the card for something like $13 a month or $150 for the year. And hardly anyone bought it. The sales agents complained and complained about how nobody wanted to buy this lousy card. Their advertisements got almost no response. Well, that lousy card was actually a really good deal if people would use it. They could save $300 to $800 a year depending on their use. But think about it...how excited would you be to listen to some guy try to sell you some lousy health benefit card for 15 minutes? Well, we tried and tried and tried to convince them to give the card away so that it could be used FREE for 30 days...from the first time it was used. There's no way a guy could save less than $25 or $30 when he used it and he could even potentially save over a hundred dollars on the very first use. Either way, he'd more than pay for the card for at least a couple of months if he'd just use the FREE trial. They resisted and came up with all the reasons why financially it wouldn't work and they couldn't do it.
People who can solve problems get paid really well. And people who recite over and over all the reasons why things won't work are generally broke. Shortly after that company quit the business, I saw that one of their competitors was indeed giving away the card free for a month, so I called them and snooped around a little and found out they were selling tens of thousands of new cards a month. It was low risk.
Consider the process someone goes through when hiring us as consultants to improve their marketing results. We know paying thousands of dollars and spending months of time and energy on your business is an extremely high-risk proposition. We would never just walk into someone's office and say "hire us, we're good." Instead, we lower the risk substantially. In our initial mailers and advertisements, we only ask a prospect to make one commitment: Request a free audio program. They don't even necessarily have to call in and talk to a person. They can just e-mail or fax a request. When they listen to the Cd's, we then ask them to make another relatively low risk commitment - assuming they liked what they heard on the free programs - attend a one day seminar. And at the seminar, we go through hundreds of examples of marketing to let a prospect see that we really do know what we're talking about. At that point, hopefully, a prospect has enough information to draw the conclusion that hiring us would be a smart move. But it all starts with a low risk offer to request a free audio program.
So now, let's evaluate your situation: First, put yourself in your prospect's shoes - a prospect who's never even heard of you - and take a quick look at your advertisements. What is the risk in calling you? What's the risk in doing business with you? Are they afraid that if you find out their name and phone number you'll send salesmen calling all the time? What can you do to lower the risk? Is there some way you can get the prospect to experience your product or service before he has to commit to buy? Can you guarantee or give a warranty for the work? Can you guarantee it for even longer than you do now? Is there more information you can give him ahead of time to help him make an intelligent decision? Can you give him guidelines as to what to look out for when buying in your industry...regardless of whether he buys from you or not? Can you lead him to a website? The point is this: lowering the risk factor is an absolute MUST if you want to engender confidence with your prospects. And if you can solve the risk factor, you'll get paid really well for it.
