When “Know, Like, and Trust” Doesn’t Matter
The old cliché about how “people do business with people they know, like, and trust” doesn’t fully explain why clients buy or define their willingness to pay. The Price and Value Journey is presented by John Ray and produced by the North Fulton studio of Business RadioX®.
TRANSCRIPT
John Ray: [00:00:00] Hi. I’m John Ray on The Price and Value Journey. When know, like, and trust doesn’t matter.
John Ray: [00:00:07] A neighbor of mine just had a new standby whole home generator installed for his home, replacing an older unit. I was surprised to see this installation for several reasons. To begin with, home standby generators aren’t a common feature of homes in my part of the country. I don’t know anyone else in our neighborhood who owns one. Nationwide, it’s estimated that less than three percent of all U.S. households have a standby electric generator installed.
John Ray: [00:00:40] Further, by all outward appearances, this man would not be a great prospect for a whole home generator salesperson. He’s now retired and I know that he and his wife have considered selling and downsizing, and generators of the size he bought stay with the home. In addition, he’s got a reputation for being cheap, one he gets good naturedly teased about.
John Ray: [00:01:08] Generators aren’t one of those home improvement features which generate a positive return when the house is sold. So, the idea of this thrifty minded guy buying a generator, which costs somewhere between $5,000 and $10,000 depending on the size of the unit, was eyebrow raising for me.
John Ray: [00:01:28] If you make your living selling whole home generators, you might look at this guy and think he’s the lowest likely to buy prospect. You would have been wrong. Maybe my neighbor’s background in the insurance industry makes him risk averse. Maybe he’s had a previous bad experience with an extended power outage. Maybe a recent fall makes him value knowing lights will always be available, so he’ll always be able to see where he’s going. Whatever the reason for his purchase, my neighbor had outcomes in his mind he wanted to achieve. Outcomes not apparent by outward appearances. He’s willing to write a significant check for those outcomes, all visible evidence to the contrary.
John Ray: [00:02:18] For me, I have zero interest in this product. I’m willing to live with the risk that the power may occasionally go out and I will have to go pull out the candles. If you’re the whole home generator salesperson, it doesn’t matter how much I might like and trust you. This is where the old cliché about how people do business with people they know, like, and trust comes up short. Know who I can trust is vital, of course. Yet a customer must be motivated to buy.
John Ray: [00:02:52] As with my neighbor, those motives are not immediately apparent. The only way you would have known of my neighbor’s motivations is to have a value conversation. It’s a dialogue focused on the desires, hopes, dreams, taste, and problems of that client sitting in front of you. It’s their values instead of the features and benefits of whatever you are selling.
John Ray: [00:03:20] In his book, The Secret of Selling Anything, Harry Browne writes, “Everyone is already motivated. The only question is by what.” Your job is to find out what it is that motivates your prospect. Don’t confuse your products with motivations. No one ever buys a product. He buys what the product will accomplish. He buys because there’s something he wants for his life. Your job is to find out what that something is.
John Ray: [00:03:53] As a professional services provider, if you don’t have the patience to have a value conversation, then you don’t understand the client who’s sitting in front of you. You may think you do, but what you think you know may simply be your preconceptions. And if you don’t understand the motivations driving that client, then your pricing will be wrong, guaranteed.
John Ray: [00:04:19] I’m John Ray on The Price and Value Journey. If you’d like to connect with me, go to johnray.co or you can email me directly, john@johnray.co.
About The Price and Value Journey
The title of this show describes the journey all professional services providers are on: building a services practice by seeking to convince the world of the value we offer, helping clients achieve the outcomes they desire, and trying to do all that at pricing which reflects the value we deliver.
If you feel like you’re working too hard for too little money in your solo or small firm practice, this show is for you. Even if you’re reasonably happy with your practice, you’ll hear ways to improve both your bottom line as well as the mindset you bring to your business.
The show is produced by the North Fulton studio of Business RadioX® and can be found on all the major podcast apps. The complete show archive is here.
John Ray, Host of The Price and Value Journey
John Ray is the host of The Price and Value Journey.
John owns Ray Business Advisors, a business advisory practice. John’s services include advising solopreneur and small professional services firms on their pricing. John is passionate about the power of pricing for business owners, as changing pricing is the fastest way to change the profitability of a business. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.
In his other business, John a Studio Owner, Producer, and Show Host with Business RadioX®, and works with business owners who want to do their own podcast. As a veteran B2B services provider, John’s special sauce is coaching B2B professionals to use a podcast to build relationships in a non-salesy way which translate into revenue.
John is the host of North Fulton Business Radio, Minneapolis-St. Paul Business Radio, Nashville Business Radio, Alpharetta Tech Talk, and Business Leaders Radio. house shows which feature a wide range of business leaders and companies. John has hosted and/or produced over 1,100 podcast episodes.
