And that’s when the penny dropped…so we packed up and all went out for Chinese food and a few beers. A good night was had by all.
The day didn’t start like that though. A client I’d worked with before had called me up a few weeks before to say they wanted to increase their prices. It turns out they hadn’t increased prices for a while despite costs increasing, they didn’t want to increase them now, but they had no choice.
Just so you know, the client sells a range of specialist foods through specialist food shops, cafes and through some buying groups. As you would imagine, each channel has its own pricing matrix….the client is very sensitive to the needs of all of their channel buyers and my client genuinely wants a big win win for all of their buyers.
This led to critical factor number 1 – they didn’t want to make any price increases without supporting the buyers and ensuring they too were realistically able to pass those increases on to the end-user.
Equally admirable was Critical factor number 2, albeit a bit more tricky – the client wanted to ensure that the end-user was happy to pay the new increased price via whatever channel they used – be that the specialist shop, the cafe, or the super market shelf.
Here’s what we did:
We conducted research with end users within the outlets that stocked and/or sold the products, where we asked the purchasers of the most popular products from my clients range a few key questions about usage, additional and alternative purchases, reasons for purchase, value for money and a whole host of other things.
The upshot of the research was that we could conclude that my client had several options based on the following key findings which came from some very carefully worded research questions:
- When end users were asked to guess the price of the a specific product – their guesses varied by up to 25% (15% lower, 10% higher)
- When they purchased certain key lines then 78% of the end users surveyed also purchased additional products from the same range
- On the occasions that the end-user did not purchase the client products, they selected a slightly cheaper competitor’s version of a similar type of product (this competitors market share was growing, but not at a cost to my client, more that awareness was growing and the total market size was increasing)
- Certain key lines were described as ‘moorish’ indicating that the end-user desired more of the product
- When asked how the end-user had first been introduced to the range, over 60% said they had been recommended to use by a friend/at a friend’s house, whilst the remaining were split almost equally between ‘been browsing’ and ‘discount’
Based on the information above and a vast array of other information we collected, we agreed with the client that they had a couple of key options balanced to recruit new users to the specialist product market as well as growing their own market share within the existing market.
Why am I telling you this?
Not one of the 4 options that ended up on the table at the end of the exercise were there at the beginning. Not one.
Not a single option.
Credit to the client that they retained an open mind at all stages.
Equally, they weren’t wedded to their existing ideas and thoughts.
And, lastly, they were curious. They wanted to do the right thing, the best thing, not just something or anything.
Hats off to this client. They listen and act accordingly with what the customers want, not what they think their customers want.
Change is inevitable, markets change, customer needs change, fashion and trends change…working with those changes is where the strong thrive and the weak wither.
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