"The Cheapest Guy In Town"
When I was a kid growing up in Baltimore, we had a chain of electronics and appliances stores called Luskin's. The chain had been started after the second world war by brothers Jack and Joe Luskin, and from the time I was born in the late 60s forward, Jack was the sole owner and face of the company.
Luskin's advertised on television. A lot. Jack was the seemingly affable company spokesperson and made himself known as "The Cheapest Guy in Town" in order to drive home the buyer benefit of low prices at Luskin's.
It wasn't about the quality of the merchandise, the selection, and it certainly wasn't about the customer experience. It was all about getting bodies in the door, and the hard sell.
In fact, in the 80s and 90s, Luskin's got popped by the AG's office for deceptive advertising practices. Three times.
Jack traded on price. And so he attracted customers who traded on price. As such, his margin was so thin that the business model relied on volume. Get'em in, sell'em hard on price.
Jack Luskin was indeed the cheapest guy in town.
The old model of positioning suggested that there were three main criteria on which customers base buying decisions: price, service, and selection.
Trading on price is easy. It's lazy. It requires no work. It commoditizes products and services. It's the Race to Zero.
Trading on service, what has evolved into Customer Experience today, and selection takes work. And caring. And giving a damn about the other person. It takes empathy.
I believe that if you provide a quality product or service, along with an easy, smooth customer experience, you have the ability, the right, to ask for more, increase your margin, and thereby free yourself and your customers from the hard sell.
There's a mutual understanding of what's being traded.
You attract customers who appreciate and understand the value in paying for quality. They have made the decision that, in return for a higher price, they expect a better product and a better experience getting that product. And they should.
Apple built the first trillion dollar company. They didn't do it on price. They did it on customer experience, which drives the quality of the products, which drives everything else.
Have you ever heard of someone saying "An iPhone? Pffft. What a ripoff!" Apple products are not cheap. But you get what you pay for.