There’s a restaurant in my state that has amazing reviews. As a former chef and restaurant manager, I’ve always wanted to try this restaurant, but haven’t ever gotten around to visiting.
It’s not because of money.
It’s not because I can’t get a reservation.
It’s because this restaurant is two hours away in the middle of nowhere.
It’s just not convenient.
There’s another restaurant in my city that I love. The atmosphere is great, the quality of the food is top notch.
It’s one of my favorites, yet we don’t frequent it very often.
Recently this place moved into a new location. A smaller location, to be specific.
And now the wait times are excruciating. What’s worse, there’s no place to wait so you’re simply stuck milling about the bar shoulder to shoulder with folks you don’t know.
It’s terribly inconvenient.
Convenience gets a bad rap in business, as it’s often associated with convenience stores or fast food chains.
But the truth is, convenience is relative to the product and the amount of effort required to attain said product.
In my first example, the geographically remote restaurant, I would be much more likely to visit if this business was located even 30 minutes away. Similarly, if this restaurant was located two hours away in a larger city with better hotels and activities, I would probably have already visited several times.
Both scenarios represent a significant boost in convenience to me, the consumer, purchasing this businesses product.
In my second example, the small space, the business would be in much greater control of their revenue and would probably be able to command higher prices due to increased scarcity if they would implement a reservation system.
And I, the consumer, would know that, if I wanted to eat there, I would need to make a reservation and that I would have a table for the evening when I arrived without having to stand shoulder-to-shoulder with strangers at the bar.
The convenience factor would skyrocket and I would be far more likely to make plans to visit them a week, or even a month, in advance.
As it is, I haven’t visited this restaurant in four months. Standing around like cattle waiting on a table is too inconvenient.
As a business owner, you should always be looking for ways to make accessing your product more convenient without sacrificing the core values of your business.
For fast casual joints, how about delivery? Online ordering? A grab and go station?
For retailers, how about online shopping with in-store pick up?
I buy my wife’s jewelry at her favorite store and I love it. They’re super friendly, always helpful, and have a cute, well-appointed store front. But what I love the most is that I can order and pay online for whichever piece I like and just pop into the store to pick it up.
I spend less than five minutes in-store, yet I still benefit from a superior product, the staff is always friendly and helpful, and I usually run into someone I know. It’s a pleasant experience that requires fewer touch points, but those touch points each have a higher level of convenience to the consumer.
Additionally, because the staff is prepared for my visit, there’s less time required to complete a successful customer interaction, leaving the staff more time to spend assisting and selling to those customers that prefer to browse in-store.
Convenience is a super important (and all too often neglected) element of business operations, but there’s one more element that, when operating in tandem with convenience, can supercharge your customer experience and dramatically increase revenues.
I’m talking about value.
Like convenience, value gets a bad rap. Also like convenience, that bad rap has a lot to do with appropriation of the term by cheap, low quality goods and businesses.
Value is relative to the product and the effort required to obtain the product.
These two concepts are really closely tied together in their utility to both business and customer. If the effort required to obtain a product is high, the value must also be high.
A snickers bar is easy to find and cheap to purchase.
A Bugati Veyron is extremely difficult to find and extremely expensive to purchase.
Value is relative.
If you sell sandwiches, you’ll find that there is a ceiling that is difficult to break through when it comes to pricing.
If you sell homes, comps and market demand will dictate the price you can command for your property.
A business should simultaneously seek to increase the value of its product while maintaining a pricing structure that represents a good value proposition and encourages customers to buy more and more frequently.
Maintaining good value is an easy nut to crack. Looking at your competitor’s product and value, evaluating the quality of your product and the quality of your customer experience…all of these, honestly appraised, will provide the necessary information to determine how to price your product.
Increasing your value proposition is where things get a little tricky.
What is a value proposition?
A value proposition is, most simply, the reason you give your customer to purchase your product.
In other words, your value proposition is what you communicate to your customer about why your product is not only the right fit for them, but a better fit than your competitors’.
A danger when creating a value proposition is engaging in a race to the bottom by pushing the cheap monetary cost of your product. However, as we’ve discussed, there are multiple ways to add value to your product.
How do you increase the value proposition of a sandwich?
Well, the most obvious answer is to increase the quality of the ingredients. However, most consumers, past a certain level of quality, can’t really tell the difference, especially when combined with other ingredients and flavors. They’ll stop paying more for the added value.
Perhaps less obvious, but equally as effective, is quantity. Are your portions skimpy? Beef them up (no pun intended) a bit and increase your prices to reflect a slightly better margin.
Done correctly, you can boost your margin on the same product by several percentage points.
Another thing to consider is the customer experience. Going back to the previous post, excellent service (holistically speaking, not simply customer to employee interactions) can command a higher price point.
A great value proposition represents the intersection of service, marketing, and good old fashioned bang-for-your-buck. Get these things right and you’ll find that you can generate more revenue from your existing product line.
Combined with excellent service, convenience and value will help you sell more products at higher price points to more people than ever before.
If your revenue is struggling or is simply not quite where you know it could be, have a look at the concepts we’ve been discussing this past week. I’m willing to bet that, with careful analysis, you’ll be able to find areas in your business and product line where you can improve on one of these concepts and generate more revenue.
If you’re interested in supercharging your revenue by implementing these ideas with the help of proven professional, give me a shout.
I created Newberry Consulting so that I could help business owners gain deeper insights into and greater control over their businesses. It’s my goal to help you identify and realize your goals by improving your operational and managerial systems and providing the highest quality advisement to you and your business.
Click the link below if you would like to talk about working together. I’m looking forward to learning more about you and your business!