As shoppers search for value in their holiday gift-buying and year-ahead planning, organizational consultant Hal Resnick weighs in about what customers want and why they want it.
Resnick, based in Ponte Vedra Beach, is president of Work Systems Associates Inc.
His 34 years in organizational development and training include work with EverBank, The Haskell Co., Lockheed Martin, Shell Oil and others. He produces a regular newsletter and posts it at his worksystems.com website.
In his recent newsletter, he asks why some customers buy Apple computers when less-expensive alternatives are available, or why some women choose a higher-priced hair salon when less-expensive shops offer the same quality.
"How do some high-end department stores do well when shoppers know that they can purchase similar goods at significantly less cost at another store?" he asks.
"Alternatively, why do some customers drive an extra five miles out of their way to purchase gasoline because it's 2 cents cheaper per gallon? And why do some customers buy the cheapest product available even when they know that it's inferior?"
His answer: value.
Resnick contends all customers, whether an individual or a corporation, make buying decisions on what they believe will provide the largest return on their investment.
"But what comprises value? Is it the same for everyone? Can customers be expected to make rational decisions once the various value elements are clearly presented to them?" he asks.
The answers are significant for every business during the sales process and during product and service design and fulfillment so they can win customer satisfaction and loyalty, which is critical to ensuring company sustainability.
Resnick writes there are three elements of value — the product and service offering (features, differentiation, performance, design, quality, speed); the relationship between the service provider and the customer; and price.
The factors vary based on the product and customer preferences.
• The product and service offering. The essence of the offering is the product or service itself, its differentiating features and other elements, such as performance standards, delivery times, service warranties, quality and reliability. Offerings must be competitive and most organizations want to create distinct product or service differences to separate them from their competitors.
• The relationship. People want to do business with people they trust and like, and trust requires honesty, authenticity and the integrity of only making promises that can be kept, and then keeping them. Customers also do not do business with people they do not like. Establishing, maintaining and strengthening relationships is essential for ongoing sales, especially for longer-term relationships and complex products or services. Relationships are built through communication, openness and honesty, as well as time spent together.
• Price. Price is important, but its influence also is often overrated. There are several occasions when price is the primary determinant of value. The first, and worst, reason is because the customer perceives no real difference among the alternatives other than price. If so, either the company or the salesperson has not created a real distinction in the mind of the customer. If there is no difference, the product is a commodity and price will win. Companies that prefer the perception are those who have strategically positioned themselves to be the lowest cost provider. "For everyone else, it's a disaster," Resnick says. The other condition in which price drives the decision is when customers are particularly price-driven. If the salesperson cannot convince the customer there is a real value-based difference, then the lowest price provider will win.
Still, despite the cost-benefit analysis and comparisons, Resnick says decisions are emotional.
"Sometimes emotions are the driving force — 'I just love that product and have to have it.' Other times the emotional component is subtle, but it is always there," Resnick says.
He says the emotional component of the buying decision can be positive or negative.
If it is positive, the customer is making a choice based on preferences about the product or service, the company or the salesperson.
If it is negative, the customer is fearful of making the wrong decision, often based on risk.
"In either case, the emotional aspect of the buying process must be understood and treated with respect — the salesperson who relies solely on logic often loses the deal," he says.
The most successful salespeople understand the concept of value and apply it throughout the sales process, Resnick says.
"They are skillful in listening to the customer and finding what matters to them — and then positioning their product or service to what matters most to their prospective customer," he says.
"Those less successful make the standard 'feature and benefit pitch' — and hope for the best," he says.
Resnick concluded that products and services are not the same, and neither are customers.
"Skillful salespeople match the value of their offering to what matters most to the customer — with authenticity. And that makes for a sustained long-term mutually satisfying relationship," he says.
Signs for Marshalls, Dollar Tree
Signs were approved for the Marshalls store in the Parkway Shops at River City Marketplace and for the Dollar Tree in Merrill Station. Anchor Sign Inc. is handling both projects. The Marshalls wall sign is being put up at 14964 Duval Road, No. 200, at a project cost of $12,620. The Dollar Tree wall sign will be at 8011 Merrill Road, No. 2. The project cost is $5,200.
Foreclosure rate declines
The CoreLogic research firm reported foreclosure rates in Jacksonville dropped in October from the year before.
The rate of Jacksonville area foreclosures among outstanding mortgage loans was 8.33 percent for October, 0.50 percentage points below October 2011, when the rate was 8.83 percent.
The national foreclosure rate in October was 3.06 percent, while the Florida rate was 10.69 percent. Both were down over the year.
The mortgage delinquency rate in Jacksonville decreased by 0.30 percentage points.
CoreLogic said 13.65 percent of mortgage loans in the Jacksonville area were 90 days or more delinquent in October compared to 13.95 percent in October 2011.
The national rate was 6.53 percent, and the Florida rate was 15.72 percent. Both were down over the year.
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