Offer Premium Features Now
I stared in amazement as I was getting ready to pay for my groceries… there was a cashier smiling and waiting to help me check out. That may not seem too odd, but only a couple weeks before, in this same spot, there had been two rows of self checkout registers.
I was at HyVee which, like a few other brands such as Publix and Safeway, is a premium, upscale grocery store. They have a large section of speciality cheeses, olives, and sliced meets. A big selection of healthy conscious and specialty diet foods. There is a restaurant and a bank in the store, along with a fresh bakery. They offer premium features compared to discount stores.
Most people would say you go to HyVee for the selection. You do not go to HyVee for the cheapest groceries. HyVee offers a premium experience and they charge a premium price.
A YouTuber recently talked about “tip fatigue,” that feeling like everywhere is asking you to leave a tip and consumers are feeling overwhelmed. He shared a simple test: If he is at a restaurant and has to order standing up, he’s not leaving a tip.
Restaurants that offer premium service often let you order from the table. This person felt that such premium service was worth paying a tip for. However, having to stand in a line to order and pick up your food is not a premium experience. Therefore, it is not worth paying extra (a tip) for a non-premium offering.
This is one of the reason some grocery stores have ditched the self checkout. If you have to ring up your own groceries and bag them yourself, should you be paying a premium price? Or, to flip that around, what are you paying a premium for if you have to do all of this work yourself?
You’ve heard me say many times that small business owners should not be competing to be the cheapest. I want your products to be better, not cheaper. That means you need to position your products to be at least a little bit premium.
How to Offer Premium Offerings
To make a premium product or service you
- Make your products different
- Understand the needs of your customers
- Look for inexpensive ways to add real value
Each of these steps are easy, really. You can probably figure out how to do this in an evening.
Differentiating Your Products
If you are a farmer and you harvest corn, you don’t get to set your price. You drive your truck to the scales, unload, and they pay you per bushel. The market sets the price because corn is a commodity. You cannot tell the operators that your corn is better–your product is a commodity.
Unless you can figure out a way to stand out. For example, I know a farmer who starts his corn early and is always among the first to have sweet corn for sale. People are eager for it and will pay a premium. Some farmers also grow special varieties, for example, multi-colored corn.
Apple is classically known for making their products different in subtle ways. By adding unusual features, it’s impossible to compare them to other brands. One example was the Mac Pro from the late 2010s. They had the same Intel processor as Dell and HP, the same memory and storage, but the Mac Pro had an AI co-processor. And the Mac was a thousand dollars more. Dell didn’t have the AI co-processor at the time so they had nothing comparable. Dell and HP were always fighting against each other on price because their computers were so similar. They were a commodity, but Apple was different.
Understand Your Customer’s Needs
You must talk to your customers and ask them questions. Do you install decks? Ask, what will you do with your new deck? How long will you live at your house? What didn’t you like about your old deck?
You can then use these answers to offer a service unlike your competitors. “Oh, you have children? We can provide skirting to keep toys from getting lost under there.” “You’ll be moving in two or three years? Composite decking looks beautiful longer and increases the value of your house.” “You want a rocking chair and your old deck didn’t have room? We’ll make it a little bigger so you can rock.” Each of these are a way to customize your offering in a way that responds to your customer’s unique desires.
Here’s a real life example. When I started researching what my customers wanted when they started a new business, I found that many were afraid of making a mistake or failing. We then customized our services and our advertising to help new business owners get peace of mind.
Adding Value Inexpensively
There’s a classic story of the travel agent selling a vacation package. You know you’ll have to get on a plane and fly there, but that’s not what the agent talks about. They tell you how soft the sand is at the beach. You hear about all of the fun and relaxing activities there are. You’re sold when you hear about the dining and nighttime activities.
The easiest way to add value cheaply is to understand what your customer really wants and then explain how you can uniquely provide the perfect solution. You should do this 100% of the time. In fact, I train my team that if they talk about pricing in the first seven minutes of the call we’re not getting that sale. We know people care about lawyer pricing, which is why we have it right on our website. But we can’t explain the pricing suitably until we’ve heard their needs.
Then, after you’ve done this, look for ways that for little or no money, you can add valuable enhancements to your service. Things that make your product different and that you can relate as a solution to their problems.
This can be a special method or technique. For example, we spent many hours creating a checklist of over 50 things we do when we help someone buy a business. By having a checklist, we ensure that we don’t miss a thing. This is helpful to our clients because they pay a premium for us to ensure this is done right.
It can be a special brand—for example, Doritos brand chips are perceived as being more valuable than Walmart brand chips. Companies who invest in their brand by having a quality logo, quality informational material, and possibly even a registered trademark, can be seen as a premium service.
And it can be things that are each and cheap to add that may make your offerings a little nicer than the rest.
Here’s What You Can Do Today
Start by making a list of your favorite customers or types of customers. The ones you’d want more of if you could. What did they have in common? What did they buy? What questions did they ask?
Now think of your most popular products and services. What is it that people get when they buy from you? Who are your competitors for similar products? What are the differences between yours and your competitors?
What are some things that already make your offerings different and attractive? Here are some examples:
- Convenience — remember Swan’s food trucks? Their moto was that they had the product on the truck. You didn’t have to wait for delivery, it was there.
- Price — you offer your customers more for their money. Again, I’d prefer you focus on more value rather than less money.
- Something unique — nobody else has the same mix that you offer.
- Expertise — you do it better, have done it longer, or have special training compared to others.
There are many more answers to this. But once you know, what can you do to make that unique feature appealing to more of your target audience?
