One of my favourite marketing experts is Jeffrey J Fox.
Jeffrey has written over 11 bestselling business books. The one I like the most is called How to be a rainmaker and was recently voted one of the top 100 best business books ever written.
I interviewed Jeffrey for my Unfair Business Advantage Report and asked him to share his singe most valuable strategy for increasing sales.
You have to 'Dollarise the value of what you sell,' Jeffrey told me and then went on to explain exactly what he meant.
He told me that we have to understand that customers do not buy products or services.
They do not buy features or benefits. They do not buy technology.
What customers buy is what they get from the product or service.
Customers buy outcomes.
Jeffrey explained that great companies price their products and services to the value the customer gets. (And not to some target gross margin percentage or to recapture manufacturing costs.)
This marketing and sales strategy is called 'Dollarisation.'
If a company makes a motor for example that lasts 50 per cent longer than the competitor's motor then they should be able to charge a premium price. And the sales and marketing literature, advertising and the sales force must show the customer the numbers; the dollarised value the customers gets from the product.
They must show that the dollarised value is greater than the price.
The first thing you do when dollarising your value is take a look at your sales literature you have today and it will claim a product is more reliable, faster, quicker, more robust ,cleaner, safer or whatever. That is an advertising description.
What the real marketers do is to turn 'more reliable' into a number.
So instead of claiming the product 'lasts longer' give the customer some facts.
For instance 'The product lasts 25 per cent longer.'
If a competitors machine lasts 24 months, and you last 25 per cent longer, then your machine last for 30 months.
In a 60 month period the customer would have to buy three of the competitor's products versus two of your more robust product.
One of Jeffrey's clients sells a motor that sells for $6,000. The competitor sells for $5,000. These motors are used in the lumber industry, cutting down trees. It's a rugged, tough environment.
Every year the customer tells Jeffrey's client 'You know we really like your product.'
(Then they buy the lower priced product.)
So Jeffrey asked his client 'Why should they do business with you?
The answer is that due to a special bearing his clients motor is tougher, better tolerates the tough environment and lasts 20 per cent longer.
This means that in two years the customer has to buy two of the competitor's motors versus one of his clients.
The competitors motor is priced at $5,000 but in this lumber application the true price was $10,000. (In the same time period the customer has to buy two of the competitor's motors for a total of $10,000 plus incur the cost of labour expense and the downtime of having to install the extra motor.)
When Jeffrey's client showed the customer the dollarised value of the longer lasting motor they got the contract. (A contract they had lost previously every year for 12 years.)
In our interview, Jeffrey gave a number of useful examples and went into a lot more detail on how to dollarise the value of any product or service.
Jeffrey has discovered that when you 'dollarise your value' you can charge premium prices, make far more sales and have a lot more fun.
Read my full interview with Jeffrey on how to dollarise your value in my Unfair Business Advantage Report. And also go to Jeffrey's website and download a helpful 15 page report he has written called an introduction to dollarisation.
Price is what you pay. Value is what you get. -Warren Buffett