Consumers make purchase decisions based on many factors. Price, convenience, the value provided by purchase and service quality are four criteria that customers consider when making a purchase decision. Traditionally, the price is the differentiating factor that pushes consumers in one way or another. Distinguishing your service based on price is fine if all else is equal, but the other characteristics can be used to differentiate your service from those of your competitors.
Value Provided by Purchase
In financial services, it can be difficult to convey the exact value that your services will bring customers. Customers in financial services usually have a good understanding of what they are shopping for and have a basic understanding of what the “value” is. If they are seeking to buy a home, they will find mortgage specialists. If they want a new credit card, they will only be shopping for credit cards. Since the customers already know what they want, it can be difficult to explain why your service is more valuable than the competitors offer.
When attempting to explain why your services can provide more value, the conversation devolves into explaining how you can offer better prices, lower fees or better interest rates.
To demonstrate the fact that you offer better value to the customer, you should try to focus your efforts on explaining why you, as a person, can provide value that a competitor cannot match. Are you more competent than your competition? Give examples of your competence, explaining how you can do a good job for your customer. Do you come across as more trustworthy? Then demonstrate why your trustworthiness is valuable to your client. Whatever you do, try to prove your value in ways that do not revolve around pricing. To learn more about providing value through trustworthiness, check out our article: How Warmth and Competence Affect Customer Perceptions.
If the prospect does not see the difference in value provided by two professionals, their decision will revolve around other characteristics. Often, that characteristic is the price. To avoid a race to the bottom, financial services professionals should avoid positioning their business based solely on price. So, what other ways can financial services professionals demonstrate the differences between themselves and their competition?
Customers want convenience when dealing with financial services organizations. There was a time when banks held hours that were inconvenient for their clients. People want to manage their financial services at times that work for them. Businesses need to make their services accessible to the average consumer.
How can you make your services more convenient?
Be available wherever and whenever your customers need you. Consider offering to schedule client meetings outside of regular office hours. Offer to meet people in their home after dinner. Maybe they would like to meet at a diner for lunch? Maybe they can only make time in their schedule early Sunday morning.
To thrill your customers, do what it takes to be available to them, when they want and where they want. Convenient service will reduce friction in your relationship, allowing the quality of your service and the value you provide to shine through. What is at risk if financial services do not begin to prioritize convenience? Check out our article: Financial Services: A Case for Industry Disruption.
Service quality is the factor that matters most to consumers. Regardless of price, convenience, or other factors, nearly every customer is looking for high-quality service.
How can you improve the quality of your service?
The first thing you can do to improve the quality of your service is by perfecting your service offering. Your offering should meet the needs and desires of your niche. Figure out which characteristics your niche values and ensure that those components are built into the service offering. Design your services with your niche in mind, so every step of the journey is based on their wants and needs.
The second thing you can do to improve your service quality is carefully managing the customer journey. Design the customer journey with the end user in mind. What does that mean? Well, you should provide opportunities for customer education that adds value.
Customers are engaged when they feel as if their voice is heard by their financial services professional. What stages of the buyer journey involve customer input? Provide educational opportunities to help the customer move through the journey with more knowledge and agency. If you can make customers feel involved in your service process, they will be more engaged and less at risk of leaving your practice.
A lot more than just price goes into any purchase decision. It does not have to be a race to the bottom; there are many other criteria that you can compete on.