101 Ways Pricing Is Choking Your Business
#61: Lack of insights on your Value vs. Price relationship.
I watched this one video clip in which Simon Sinek was discussing the topic of giving honest feedback. His counsel was TIMING is everything in giving honest feedback. He asserted that the receiver of feedback is disposed in either a Rational (thinking) state or an Emotional (feeling) state concerning the matter at hand. Feedback on other hand tends to be Rational. Therefore to maximize impact, honest feedback should be given when the receiver is in a Rational (thinking) state.
Unlike magnetism, for feedback opposites (emotional and rational) don’t attract.
A friend of mine runs a Spa and Salon where i occasionally drop in for some grooming and a shave to hide my receding hairline! I occasionally stray and end in some other Salon and Spa. I sneak whenever it is convenient and sometimes, well sometimes like a loyal shopper just to benchmark the services I get over at my friends.
My little ‘benchmarking trips’ unearthed the difference in service levels between my friend’s place and other establishments. Firstly, they have long waiting times, which get worse whenever i have to drag my two boys along. Secondly their standard package does not include a head massage. You see a short head massage has become entrenched into the standard package with gents grooming in suburban Nairobi. A good masseuse can a be a key driver of footfall, revenues and profitability.
Although my pal’s place charges lower than competing establishments, I hardly see a beeline for his services.
My hypothesis is that in a market crammed with a grooming joints in every little corner, the customer has made a conscious trade-off between price and value and decided that the extra cost elsewhere else is offset by the value in the head massage and they are voting with their feet (rather heads and wallets).
To understand his customer’s sage, attitudes and the value to price trade-off, my pal needs to gather feedback from his customers.
Listening to Simon’s clip got me thinking back on why i struggle (unconsciously) to give him honest feedback on his Value-Price relationship. Because we are both in some form of emotional state whenever i swing by…him elated to see me come to support his hustle and me swinging between the positives of coming to support a friend and buyers remorse as i reminisce on the head massage elsewhere.
Projecting this little experience out, i see this same situation replicated thousands of times over with business proprietors who depend on family and friends for feedback . They end up in that same awkward situation, where feedback is all glowing and meant to encourage vs. being constructive enough to spur growth or change. Business proprietors must learn to shy from these emotional feedback but rather collect rational feedback.
Rational feedback collected from a carefully constructed survey will provide the proprietors with solid insights into his value to price relationship and how best to position it to win in the market.
