Deliver premium service through product
Although differentiating on product alone is difficult, product is of course very important. It is the backbone to what drives business and profitability for most organisations. What are the things that you need to consider, to make you relevant for your market segment? ‘What does good look like’ for you?
Customers need choice while organisations need sales. Retailers marry these two by focusing on price architecture, ie good, better and best. For example, a cookshop won’t just stock one model of frying-pan. They might stock Prestige (good entry price level); Stellar (better or midprice); and Fissler (best or premium range). By having this wide range of prices, they’ll appeal to a wider audience and fulfil their expectations. It also gives the salesperson more opportunity to up-sell. We introduced this concept to a professional services provider and it’s driving more sales.
A category killer is where an organisation has developed the best edit for a category of product/service. The opportunity here is one of ownership in a chosen category, which is about being the destination and having real authority for that category.
Selfridges in London has the largest collection of ladies’ shoes in Europe. Recognising the potential in shoes from a sales perspective and as a footfall driver, it invested heavily in space, shopfit, merchandise edit and marketing. You might say that Selfridges ‘owns’ shoes and is the destination for shoes in London.
We live in an age where customers expect and are inspired by ‘the next best thing’. And for some sectors of the market, customers want something that is different. ‘Exclusivity and newness’ might refer to a product or service, a way of working, new promotion, new advertisement or catchphrase — or whatever other concept might make products stand out.
Customers expect and like to imagine what it will be like to own your product. That’s why shops have fitting rooms and motor dealers encourage test drives. The masters of this practice are the beauty product houses. They have lots of testers on display at their counters for consumers to interact with. This practice is not just limited to retail, it will work for B2BS also.
Pack sizes are influenced by a number of factors — packaging cost savings, delivery cost efficiencies, shelf size, product safety and picking efficiencies. But what’s optimum for your customer? When did you last check? Rather than just doing the maths from your own perspective, consider the implications for your customer. Likewise, if your customer orders something from you that is temporarily unavailable, tell them.
Your customers will take comfort and reassurance from your honesty when you tell them that something is a bestseller. But be careful as it doesn’t mean that it’s okay to lie and pretend that a ‘dog’ is a bestseller. As a short-term response, customers might believe you and buy. But if their purchase does not suit their needs they will be upset with you afterwards.