Buyer Perception Impacts Your Business More Than You May Think
Unfortunately, in business, you can do everything right and still lose a buyer to a competitor. As a business owner, you determine your prices and how you want to market certain products or services. However, your potential buyer ultimately gets to decide who he/she/they want to compare you to and where he/she/they want to spend their money.
Buyer perceptions are formed based on the buyer’s assessments of businesses. Remember Bob and the car dilemma? Read more about Bob’s customer experience here from our previous blog post in this series if you haven’t done so already.
Let’s Take a Closer Look at Bob’s Purchasing Perspective...
Bob went back to Dealership B for an oil change. At Dealership B, Bob continued to receive exceptional customer service. They offered him a loaner car for the day, so he didn’t need to wait for 30 minutes, while his oil was changed. Despite Dealership B’s offer, Bob decided to stick around in their waiting room with fresh pastries and good coffee. When his car was returned, the mechanics laid paper mats on the floor to keep his car clean and wrapped his steering wheel to avoid getting grease in it. The whole service cost Bob only $29!
A few days later, Bob stayed at a Marriott hotel on business. He paid $400 for one night. In the morning Bob went downstairs to discover he had to pay $8 for a watered-down cup of coffee! He couldn't help but remind himself of the excellent, free cup of coffee he received when getting his oil changed at Dealership B.
Bob found himself comparing his experience at the car dealership to a hotel.
While Bob received different services from Dealership B and the Marriott, his time at Dealership B negatively impacted his perception of the Marriott. This seems unfair to the Marriott—shouldn’t Bob be comparing them to other hotels? Truthfully, it doesn't matter. Bob is a paying customer, which means he can compare the Marriott, and any other business, to whomever or whatever he wants!
Focusing on Customer Loyalty can Go a Long Way!
Your relationship with each client is like a bank account. In fact, there are various types of customer loyalty:
If you work hard and make your clients happy (happier than they think they can be with other businesses), your sales equity with this client will be deposited into your relationship bank.
If your client doesn’t feel valued or important, there will be a withdrawal and your sales equity will decrease.
The goal is to earn maximum sales equity with each relationship you build; however, this is all dependent on the buyer’s perspective.
Your Customer Retention Rate isn’t always up to You.
When deciding whether to deposit or withdraw, clients tend to reflect on recent services you have provided them. Their decision depends on what they recall happened, which can be different than what actually happened.
If your relationship with your client is low or negative, it will be more challenging to influence your buyer’s decision than it would be if you have a positive balance. If I’m your client and have continued to make withdrawals from our relationship bank, why should I start making deposits? What will you do for me moving forward that will make me better off? If you can’t prove to me that our sales equity will increase, then I will take my business to another company.
The answers to these questions will affect your customer retention rate and your company tenure.
How Do You Improve Customer Loyalty?
We all know the saying, “A happy client is a loyal client,” which means businesses can expect a long-lasting relationship if they can build a good relationship with their clients.
Therefore, it’s crucial to constantly review your sales equity with your clients and evaluate how you can improve your clients’ perceptions of your business. Customer loyalty will likely fall if you fail to keep up with client expectations. By keeping Bob happy, Dealership B was able to solidify a faithful client even though they had competitors with more inventory and services to offer.
If you learn to think from the perception of a buyer, your clients will be happier and better off in the long run. Learn more about how Encompass-CX can help you understand your buyer's perception, and how measuring these insights can boost growth and increase your revenue!