Customer insight reveals how to demand premium prices.
As a consumer living in the United states, we are constantly surrounded by four letters. S-a-l-e. Are eyes light up seeing it, are ears perk up hearing it, and are adrenaline races once we’re near it. But as a business owner hearing your competitor is offering a sale, feelings can be mixed. An owner of a Fabrication company that offers premium products, was convinced his customers were leaving him for a foreign company that always offered lower prices & sales.
And he was right.
Specializing in milling aluminum components to extremely fine tolerances, this US based fabricator was suffering a loss in business. A few Chinese importers entered into the market and were slowly pecking away at his customer base - which lead him to Atenga. Immediately, we knew lowering their prices to compete with these foreign competitors was not a viable option. Their products value was built around quality, whereas his competitors was built around “the lowest price”.
When they came to us, the first thing that we did was perform an in depth study of their market. We identified two segments that needed client capabilities and quick-response services. These segments were also willing to pay 25% higher prices. Furthermore, we identified a set of additional services they could offer customers, with little to no extra effort on their end - ultimately improving customer's value perceptions in the target marketplace.
Immediately they tied up loose end on the production side. Re-Engineering processes for quicker turnaround time & more accurate production forecasts. They then shifted sales efforts towards these two market segments - while also developing an introductory offer for new customers to experience faster turnaround times and an accurate & responsive “customer catered” atmosphere.
The result was night and day - Capture rates rose from %2 to 60%. New sales grew by 34% in the next six months, and 20% of the existing customers signed up for their “ALL” program.