So, how do you convince prospective clients that what you’re offering is worth the price on the tag? You give them their perceived customer value.
Many event businesses, especially those just starting out, have a tough time convincing prospective clients that their services are worth their prices. This results in them being underpaid and barely breaking even, never mind making a profit.
As an event business, you want to convince your prospective client that you are worth the price you are asking for because your services will give them that “X” factor. This is not easy given all the competition in the event industry. Whatever your obstacles, you need to both sustain your business and grow it, and that requires a steady cash flow.
Related: Your Event Planning Business and Bookkeeping: Tips From a Finance Pro
What exactly is “Customer Perceived Value?”
Customer perceived value refers to the customer’s certainty that a product or service will satisfy their needs according to their expectation. This belief influences how much they are willing to pay for something and whether they want more of it (causing a rise in demand for that particular product or service).
According to this article on The Business Professor, the actual attributes of a product or service do not factor in customer perceived value. This basically means that regardless of your service quality, what matters is the customer’s “perception” of your offering. Perception refers to one’s impression or interpretation of a particular something or situation, and it is not always determined by facts.
We’re talking about the customer’s evaluation of your event business’ service. This evaluation results in them attaching a level of value to your product. If a customer perceives that what they stand to gain from your product or service is higher than what you’re asking them to pay, you’ve got a positive customer perceived value and a likelihood of increased demand.
If the customer sees real value in a product or service, they will be willing to pay the expense. And they will also derive pleasure from making the actual purchase. If you’re just trying to move your products or services without lowering your price, imagine more customers making purchases and deriving satisfaction from paying you! It all hinges on whether customers see enough value in your offering.
Now, we know that some of us choose businesses that charge more than those with lower prices for the same product or service, but why is this?
The answer is in these 3 value-adding things:
1. Brand & Reputation
Your company’s brand can also be understood as your reputation. If your event business seems credible and reliable to customers, they ascribe more value to your services or products. There are various ways that customers establish a brand’s credibility and reliability.
Related: How To Brand Your Wedding Business
Reputation by association
Firstly, customers determine reputation by association. In the context of events, customers look at previous events that a business has done in collaboration with other vendors or event planners. So you want to ensure that you always work with vendors with a positive message and a similar customer base.
Reviews & testimonials
Secondly, customers determine value by reviews and testimonials, and social media plays a huge role. Most people nowadays check a business’s reviews online before soliciting its services. One bad review can dissuade many people from working with that business. So it is crucial to wow your existing customers so that they say good things about you on social platforms.
Related: 11 Ways To Get More Reviews From Clients
Customers also determine your value from your asking price. Your price says more than just what it costs you to provide your service. It also communicates what value you are placing on the offering.
Your price could be a premium price, i.e., deliberately asking a higher price than your contemporaries to give your service a sense of exclusivity and luxury.
Alternatively, you can have a value price where your customers feel they get a good deal or even save. This price strategy increases customer perceived value because they feel paying a low price for a high-quality offering.
People value their time more than tangible things, and most customers are happy to spend money on time-saving measures to get their time back.
In the context of events, being sensitive to time and giving clients convenience is everything. You must be punctual and reliable by showing up when you say you will. Give your clients convenience and peace of mind. It will inevitably raise their perceived value of your services. You won’t have to haggle with price negotiations, and clients will happily pay you what you ask because working with you is stress-free.
Now let’s look at some actionable changes or areas of your business that you can improve to heighten your customers’ perceived value of your products and services.
Customer Service Improves Customer Perceived Value
The first step at creating more perceivable value for your clients is when the prospective client makes their first contact. You can map out a typical journey each client takes with your business and try to eliminate any negative experience they could encounter. This entails looking at your website and social media pages; are they easy to navigate? How long does it take for you to respond to inquiries or generate quotes? These make up the initial experience of your business, and the less struggling there is, the likelier the customer is to enlist your services and pay you what you ask for.
Here are a few crucial details that you can brush up on to ensure you have world-class customer service:
Think about how you respond to your customers on the phone or respond to emails and queries on social media. Some people may experience that as being distant or uninterested if you’re too formal. So, ask your customers their name or what they would like to be called. Also, use first-person pronouns in your conversation and avoid plural nouns as they risk clumping and making the client feel like they’re just “another customer.” Refer to them as “you” and use “I” instead of “we” to refer to yourself (as a business).
Responding to complaints
What if you slip up and deliver late to a client or show up late with your flower arrangement or use a slightly different color than what was agreed upon? Acknowledge your mistake to the client. Make a visible effort to make it up to them, so they don’t take to social media or other channels to give you a bad review. Your customers will understand that you are not perfect and appreciate your efforts to fix the problem. What they will not appreciate, however, is being ignored.
When prospective clients ask for quotes or have other questions, contribute your insights freely. Perhaps they are unsure about what colors to use or what kind of cake they want; make suggestions and ask them questions. This will make the customer feel like you have a personal interest in their event and are committed to giving them your best. The same applies when a customer has a problem. Encourage them to express themselves with phrases like, “yes, I see” and “go on,” and let them finish speaking before venturing a solution.
Considering The Customer’s Point of View
Naturally, it’s easier to be sensitive to your own position as a business in most scenarios, but try to see things from your customer’s point of view. To understand your customer better, look at their affordability and needs and what they would consider valuable. Value is not the same for everyone.
If you offer birthday party entertainment, then your target is primarily parents. So, look at what parents need and then make any changes to your service to meet their needs. You can gather information on your customers’ needs through surveys, direct interviews, or even looking at what your competitors are offering that draws customers to them.
Making It More Than Just About The Price
If you’re going to compete in the market using pricing alone, you’ll have a tough time when competitors lower their prices. Each business has its own overhead costs. Each can only reduce their price to a certain point, but having lowered prices is not the only way to make your product or service valuable to customers. Competing on price is simply a race to the bottom.
You can keep your prices the same and justify them by embellishing your offering more. Think about extra things you can add. These can range from increasing convenience, i.e., doing most of the work and the planning for the client, to improving the quality of your services. For example, only using the best quality materials and incorporating environmentally sustainable practices and social responsibility.
No matter how much a customer loves a product or service and is willing to pay for it, they will always appreciate special treatment for being a loyal customer. Suppose a customer returns for a third or fourth event. Why not give them an extra service for free or give them an individual discount, letting them know that this is a benefit reserved for loyal customers? This will justify being loyal to your business for these customers. It will also cause them to rave about your business to colleagues and friends and on their social media platforms.
Raise Your Customer Perceived Value
In conclusion, to raise the value that your customers attribute to your business, you must try to meet each one at their level of need. It will set your business apart from the rest to have different ways of giving your customers value at their individual levels. Study your customers and develop specific strategies to create tangible benefits for them for purchasing your products or services. Raising the value customers ascribe to your business really stems from listening to the customer’s voice so you can offer what they see as valuable enough to pay for.