The three costs your customers pay

My son was walking fast through the toy store with a serious look on his face. His hand was tight over his zipped up pocket, in an effort to protect the $50 bill inside, a Christmas present from his grandfather. He points suddenly with his whole hand, finger and body “This! This is the toy I want!”. I look up to see the biggest box in the whole store. The toy inside could have easily been placed in a box a third that size. Oh, and batteries not included.

There was a time back in the day when us, adults, also cared more about the biggest and the longest. When I was a child, the bigger the box, the more justified the high price.

These days though...do you ever find yourself thinking that less is more and faster is better? If you do, you’re not alone. Your customers are thinking the same.

We tend to think that customers only pay us with their money, but our products also cost them their time and their space. Think about it...

Most people feel like they don’t have an unlimited amount of time, money or space at their disposal. Most people want to use their time, money and space wisely. They won’t throw them around aimlessly. Even those who feel an unlimited abundance of time, money and space won’t offer their resources unintelligently, to anyone.

Customers pay with three costs: time, money and space.

 
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One way to increase your price - the money cost - is to reduce the other two costs - time and space. Then, the sum of the costs people pay you with stays the same, but you get more money, because people pay you a higher price. Stay with me, I’ll explain in a minute. Let’s take a quick look at each of the 3 costs.

Time

Do people have to give you a chunk of their time in order to use your product?

For example, when people buy a book, they don’t just spend $20, they also “spend” with a chunk of their time, because they have to spend time reading the book afterwards. It’s not just the $20 that matters to people, but it’s also the time they have to spend reading the book that matters to them. In fact, for many people, when it comes to books, time matters much more than money. Have you ever heard people say I don’t have time to read books? I heard that much more often than I heard I don’t have money to read books.

Or, think about services like Stitch Fix (a monthly custom selection of clothes) or True & Co’s bra quiz (a quiz that helps you find the best bra for your body type). These companies reduce your time cost, because you have to spend less time finding the right products for you, and more time doing what you love.

Or, think about a photographer who sells photo sessions. Customers don’t pay just the dollar value to get the photos. They pay with the time they have to spend clearing their calendar for that day, showing up and then being photographed for hours.

Or, think about group coaching programs. They’re great, but there are people who would pay much more to be in a 1:1 coaching program. Because they value their time, they’re willing to pay a high price to be laser focused on their own life, not on everyone else’s life in the group.

You can’t get back the time you spent in the past. You can only live the present and the future. But, the length (and quality) of the future is unknown. So, the time we live right now is indeed precious. The time cost can be worth a lot of dollars.

The less time people have to spend buying, expecting or using your product in order to get its full benefit, the happier they’ll feel, and the higher the chances they’ll buy again.

You can reduce the time cost even in the most unexpected industries. My friend Sara, a dentist for kids, started a business where she only offers home visits. Instead of having to drag your child to a dental office, you can have your child take her/his dental visit from the comfort of your home. She reduced her customers’ time cost. She also eliminated the emotional pain often associated with dental visits. She came up with this idea because she cares about kids and wanted to make them feel comfortable.

Money

The money cost is obvious. It’s the price you pay for the product or the service. For example, in the book’s case, it’s the $20 you pay to actually own the book.

Space  

The space cost is the least obvious. It’s the space your product will occupy in your prospect’s home, on their computer, on their phone, in their car, in their garden, or anywhere where there is a limited physical space. I expect this cost to be worth more and more for people since there are 7.7 billion people on Earth today (2019).

Source: https://www.worldometers.info/world-population/

Source: https://www.worldometers.info/world-population/

For example, when you buy a chair or a painting, you’re giving away space in your house, not just money. You may also be giving away the freedom you may have felt in connection with that space, because that space can no longer be occupied with something else.

You’re also giving away space when you buy seemingly small items like clothes. There comes a time in every woman’s life when a closet looks better with fewer items, not more.

Space also applies to how physical things can be carried or stored. Foldable wins over non-foldable.

Time, money and space are the three costs people pay us with. Therefore, it follows logically that if we want the Money piece of the equation to be higher (aka, the dollar value you get from customers), we have to decrease the other two costs, time and space. That way, your sales will go up because your price will be higher. You might even get more customers because time and space are becoming more and more precious and people are drawn to products that cost the least time and space.

 
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How to reduce time and space, and charge more money for the same product.

Let’s take a look inside your business and find all the little areas where you can reduce the time and space your customers give you, which will make it easy for you to charge customers more money for the same product.

Can you make it easier and faster for people to buy from you? Can you create cheat sheets, transcripts and audio files in addition to your video tutorials, making it easier and faster for people to consume your content? Can you include a smart sized bag so that your product can be stored away easily? Can you allow people to try out a piece of furniture or a painting before they commit to buying it? There are various ways in which people give their time and their space.

Take a piece of paper or open a Google doc and write “Time” at the top of the page. Then, divide the page into two columns. Label one column “Time costs people pay me with currently”, and label the other column “Potential ways to reduce time costs”.

For example, here are two time costs that customers pay a photographer with. First, there’s the time you spend at the photoshoot. Second, there’s the time it takes to choose the photos you want to keep afterwards.

Here’s how you can reduce each of these time costs. You can tell your customers you’ve been doing this art for a long time. You know what you’re doing. You don’t waste a second. Your photo shoots are always a success. Everybody loves the photos they get. Don’t be afraid to communicate with your customers with confidence. You can share ahead of time your tips for how to get your customers in the right mindset for the photoshoot, so that they show up fully present and ready for the camera. You can make the photo shoots fun for your customers. You can bring a speaker and invite them to listen to the music, podcasts or audiobooks they love while they’re posing for you, so that they’re making the most of their time. After the shoot, you can suggest to them a pre-selection from the big selection, just in case they love what you love.

Next, do the same with space. You might find that time applies to you more than space and vice-versa and that’s ok.

For example, the customers of a furniture company pay with the space cost of their house. It’s hard to return furniture...so you’d better be sure you want it when you buy it. The piece looks good in the store, but customers will ask themselves...what if it doesn’t look in my house?

One way you can reduce this space cost is by making it easy for customers to return their furniture if they change their mind once they see it in their house. Your delivery driver could wait around while the customer looks at it in her house for a minute. If the customer changes her mind, you could take the furniture piece back in the truck. And yes, you can charge more for your furniture because you offer this extra service. Another way to reduce this space cost is to allow customers to “see” digitally the furniture in their house (they upload a picture of their room, you let them drag and drop the furniture piece). Some furniture companies are already doing this.

One last note

When you put yourself in your customers’ shoes frequently and when you think frequently about what they feel, you can naturally reduce any costs they might pay you with and make it effortless for them to buy from you.

Curious about how to create marketing that makes your customers buy again and again? Join me inside Lifelong Customers, where I’ll show you my framework to make customer loyalty the norm, not the exception. 

Mihaela Akers
How to make a difference in your customers’, clients’ and readers’ lives

When I was a child I would sit in our courtyard with my two neighbors, a little boy and his sister.  I’d tell them stories that I’d make up about princes and princesses and swords. Most likely because they were too exhausted to move after an afternoon of playing, they would listen to the whole story, which almost always had a plot and an ending that didn’t leave you wishing for a sequel. But they listened and that made me feel like I was making a difference.

I don’t know why making a difference feels good. But what I do know is that we’re all intrinsically uplifters, service givers and difference makers. We’ve all been born with a powerful desire to be of service and to make a difference in others’ lives. Sometimes this desire lies dormant for a long time, until we awaken to it through life experience, circumstances or self realization. Either way, making a difference makes us feel satisfied, fulfilled and connected to one another.

This connectedness we feel, strive for and have to one another is at the basis of business. Think about it, if nobody else existed on our planet today, would you still work in the business you’re in today? You’d have no potential for customers, which means your business would most likely not exist. You’d have no potential to benefit others. Isn’t business about creating customers, connecting with them, keeping the connection with them alive, and making a difference in their lives?

The difference you make is a reflection of what’s on the inside.

A young boy was standing on the street on that beautiful Sunday morning. His mom was in the back, on a picnic chair, reading a magazine. The young boy looked proud and tall next to a blanket on which he laid some old toys and kids’ books, all up for sale. While I could tell his products had been used plenty, they were in great shape. I picked up a book and then, the young boy started explaining why he loved that book and why he bought the whole collection and why he’s had these books since he was three, which was five years ago when his little sister was born, but he kept the books away from her so she couldn’t rip the pages. He stopped to take a breath. How much for the whole collection, I asked. I can have it all for just $5, he said. I left with as many books as I could physically carry, feeling happier than I was before I made my purchase, not just because I’d offer my kids a present that day, but also because the little boy’s enthusiasm naturally made me enthusiastic in return.

You don’t need to be a superhero to make a difference in your customers’ lives. You can do it in the simplest of ways. That young boy didn’t make a difference in my life because he helped me cover a need in my life. I assure you I didn’t need any more kids’ books or toys (even though, of course, my kids would beg to disagree).

That young boy made a difference in my life because, through his personal example of having the courage to sell and talk about his products openly, lovingly, with hope and with grace, he reminded me of sincerity, appreciation and enthusiasm.

 
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Your first and most important customer is You.

From miles away, customers smell the lack of emotional connection business owners have towards their products and business. Nobody wants to buy anything from a person who didn’t buy it herself or himself emotionally first.

It is you who, first and foremost, has to be pleased by your product, your service, your experience and your words. It is you who has to feel proud of what you’ve created. You are your most important customer. It is you who has to love what you’re bringing forth in the world. Create to please yourself, not to please your customers.

Yes, I talk a lot about the art of customers, about customer retention and about customer loyalty. But when it comes to that delicate sparkly space in which you create and make your important business decisions, it is you and you alone who has to feel happy and proud of what you’re birthing. When people work hard to please their customers, they start forgetting who they are and they start losing the unique essence of their business, which is the precise reason why their customers came to them in the first place. Customers will come, no, they will stampede to buy from you, but only if you, yourself, see the great beauty in what you’re selling before you invite them in.

The only people with money who walked by the young boy I mentioned above, were adults, not kids. He could have sold his mom’s belongings instead, to please adults, but then, he wouldn’t have been able to talk with so much joy about his offering, which would have caused him to make less of a difference and sell less as well.

See the perfection in them.

Your customers are perfect beings who have it all, who are abundant in desires, in hope and in everything else that’s good feeling. When you look at them this way, they too will remember to feel that way about themselves. What a great way to make a difference!

Many business owners think their customers would suffer if they didn’t own their product. They think their customers have a big lack in their lives, a lack which must be filled. But, nobody buys anything because they need it. They buy it because they want it. And, nobody buys a second time if the memory of the first purchase brings up the feeling of lackfullness in their hearts. Of course your product, service or ideas will inevitably make their lives better! But, don’t approach them from a place of lack. They don’t want to be helped, they want to be loved.

Stay true to who you are.

A wise tree doesn’t lower its branches when people discover its beauty and repeatedly set up picnic blankets with delicious fruit, champagne and Sunday sandwiches underneath it. Instead, the tree grows its branches even taller and in the process, brings even more satisfying shade to its customers. If the tree lowered its branches, picnickers would get too many leaves in their food and they’d eventually leave.

No matter how many customers love you and adore you and buy from you for life, to continue to make a difference in their lives you have to stand true to who you really are in business. Their comments, their feedback, their words might make you feel persuaded to stand for something else, but do your best to keep on the path that you’ve chosen for your business. You’re on a rocket ship, and those who want to join you will do so, knowing that there’s only one direction you can go, up.

You’ll make a meaningful difference in your customers’ lives when you have the strength and courage to stand upright. You’ll be an example for them to live their own lives with strength and courage. You’ll remind them that they, too, stand for something and that it feels good to remember what they stand for.

 
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Stay true to who they are.

My husband lovingly told me recently that he understands me much better now than when we first met. He and I just celebrated eight happy years since we secretly got married in the NYC courthouse. But I think what he wanted to say instead was that my emotions, which have become familiar to him over time, don’t make me look like a red alien anymore.

Your customers are people too. They have their own emotions. Staying true to who they are means that you honor their emotions, which makes a big difference in their lives, not just because of the feeling of connectedness they’ll instantly feel, but also because they’re not used to having their emotions acknowledged. Unfortunately (and this is something that is changing in the world) they’re used to feeling manipulated into a transaction, which doesn’t make them feel heard and seen.

Create an experience.

A little book in my bookshelf has been calling me. Finally, I picked it up. It was so good and so juicy that I couldn’t stop reading it. But it was printed in small font and had many words on little, thin pages. At times I wondered if I needed glasses because of how hard it was to follow the plot in this book. It was a reading experience I could have lived without, but it wasn’t a book I could have lived without. It’s true that it was the content of the book that made the biggest difference in my life, but a friendlier reading experience wouldn’t have hurt either. In fact, it probably would have helped me devour the book with even more eagerness and more joy.

The experience you create for your customers will help them enjoy your product, your service and your ideas even more. The experience will make them feel an emotional connection towards your business. Sometimes people remember the experience and forget the product. Experiences do make a difference.

Meaningful moments.

But, it would be overwhelming both for you as well as for your customers if you bend over heels to create an outstanding emotional experience for them in every single moment in which they interact with your business.

There are moments that are meaningful, and moments that aren’t meaningful. It’s the meaningful moments that make the biggest difference in your customers’ lives. What should you do during the remaining moments? Be fair, have common sense, have respect and provide a great service. But don’t spend all your energy devising outstanding experiences, which you could reserve for the moments when these experiences do indeed make a difference.

This is the 80/20 of the customer experience. Spend 80% of your energy on the 20% of customer experience moments that generate 80% of your customers satisfaction. I’ll tell you one of these meaningful moments in a minute, but first, it’s important to...

See your customers as your new partners.

After people buy (anything), they’re more than customers, they become partners.

There are people who stay outside the window, who look in a little bit but who then walk away. They’re prospects. And then, there are the people who are standing next to you, who just made a purchase and who are now looking at you with hope, enthusiasm and an open heart. They’re your customers. They’ve now become your partners.

To make a meaningful difference in their lives, you’ll want to show them you see them as partners. Acknowledge them, because they’ve given you their business. They’re supporting you and routing for you.

 
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The meaningful moment at the end.

What happens all too often is that, instead of looking the person standing in front of us straight in the eye, we look at the prospect who has their face squished against the window from the outside. We may shake hands with the person in front of us, but with the corner of our eye we follow the person who’s on the outside. Why are they not walking in? Why are they not seeing the beauty, the abundance, the glory that my products and services could fill their lives with? And just like that, we miss the meaningful moment at the end, and we lose customers in the process.

You see, one of the most important moments in a customer’s experience with your business is the moment right after people buy, a moment most often forgotten, for understandable reasons, but a moment so important that it directly influences if people will buy again or refer others. It’s a moment of emotional intensity, when you’ll want to look your customer straight in the eye, smile at them, cherish them and show them you see them, hear them and understand them. They want to feel welcomed in that moment, and they’ll remember you if you make them feel that way.

Don’t get customers only to forget them as soon as they buy. Get customers so that you can respect them as soon as they buy. The more respect you show to the customers you already have, the more prospects will walk in the door.

Know your numbers.

It doesn’t sound like it at first, but looking at your customer data, understanding it and being thoughtful about it does help you make a difference in your customers’ lives. Many businesses are accustomed to thinking that their customers are speaking to them through the comments they leave in blogs, through surveys, informal conversations or even expensive customer research projects. That may be true, but the percentage of people who actually speak in this way and share genuine feedback is low. However, 100% of your customers are speaking to you through your customer data. Look at your numbers, learn them, calculate the right metrics and you’ll see right away how you can make even more of a difference in your customers’ lives. Your numbers are the language in which your customers are speaking to you.

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I could write forever about this topic. There are many ways in which you can make a difference. But, I’ll stop here and leave you with a quote I love from Maya Angelou: “I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel” You’ll make a big difference when you make our customers feel differently - uplifted, respected, connected, acknowledged, welcomed, energized, or better in any other way.

PS: I’m writing a book about customers. If you have a customer related story you’d like to share with me, I’d love to hear it! Send me an email at hello@builduplab.com I might write about your story in the book if it fits in with my topics (I can disguise your identity of course if you wish so). Thanks so much!

PPS: My training program Lifelong Customers, all about customer retention & loyalty, is now open for enrollment for a limited time. Join me inside!

PPPS: Don’t forget to sign up for my email list!

Big hug and lots of love. Whoever you are, reading this, thanks so much for being here with me today.

Mihaela Akers
Nine marketing lessons learned

People will always say “no” if they don’t have enough information to make a decision.

If you ask somebody “Would you like to buy a makeup set for $30?”, they will say “no”. But if you ask them “Would you like to buy a makeup set that will make you look naturally beautiful, that’s made out of organic and earth-friendly ingredients, that’s been created because so many women’s faces suffer the effects of synthetic makeup ingredients and that comes in every shade, for every skin?” - they’re more likely to say “yes.” Not just because they now understand some benefits, but also because they feel more respected to have been given more information. A sales proposition without enough information is just an interruption. A sales proposition with information is an invitation.

Give people what they want, not what they need.

Apart from commodities that don’t stand for anything, people don’t buy anything because they need it. They buy it because they want it. They buy it because of how they’ll think they’ll feel after having it.

People don’t always know what they want, but they recognize it when they see it.

As I’m writing this, I’m sitting in a restaurant space offered through Spacious. The restaurant is used as a co-working space during the day until 5pm, which is when it officially opens. I tried other typical co-working buildings before. I tried a private office and I tried working out of open floor co-working areas. But, I would have never thought I would be so much happier working out of a restaurant space. Here, the ambiance feels quiet, relaxed, hospitable and airy. This ambiance makes work feel like vacation (to me). I didn’t know what I wanted, until I found it. Your customers are not founders. They don’t fully understand your industry, your opportunities and your creative legroom. They don’t know what they want.

Every business is in the business of retaining customers.

It costs 6 to 7 times more to acquire a customer than it costs to retain one. At one point, every business that’s been in business for longer than a year and that looks at its numbers realizes that in order to stay and thrive in business, it needs to retain its customers. Retention is a whole different story than acquisition, and it doesn’t happen by accident. If you’d like to learn more about customer retention and loyalty, please join me inside my training program Lifelong Customers.

Direct mail still works (and will always work if you’d ask me).

Some years ago I had a conversation with the founder of a tech startup. He wanted to know more about customer retention. I told him how in the company I was working with at the time we used direct mail pieces (little trifolds and postcards) to drive our existing customers back to our website. He gave me a perplexed look as if I thought we were living in 1990 but that in fact, we were in the second decade of 2000. “Yes, direct mail works and I know it because we always hold a control group of customers who don’t receive any direct mail, which is a testing best practice in direct marketing”, I said to him. He became more curious, but I wondered how many companies started in our techy times are missing out on the profit and increase in retention they could get out of direct mail. (By the way, are you curious to learn more about direct mail? It’s a delicate subject, and I’m thinking of creating a class just about direct mail. If you’d be interested to learn direct mail best practices, send me a quick email at mihaela@builduplab.com).  

It’s ok to break-even on a customer’s first sale.

On the second sale you’ll make much more profit, since you won’t have an acquisition cost. So, it’s worth it to bring prospects in at a break-even cost.

Try to not speak to your customers the same way you speak to your prospects.

Your prospects need to know you better, while your customers need to feel acknowledged. There will soon come a time when customers will leave if they’re not acknowledged as customers. They’ve already given something to your business by buying from you. The least you can do is to periodically create two different versions of your marketing message, one for prospects and one, with extra special language, for your customers.

Test meaningful and scalable ideas.

Sometimes people want to test colors, formats or other little things that don’t make any difference. I highly recommend testing new ideas, but make sure that what you test is meaningful, scalable and implemented correctly.

The service, not the price.

Talking about the price too much will invite transaction buyers. Talking about the service - the business, the product, the process, the team, the customers - will create relationship buyers, people who are interested in you much more than in your price, who are more likely to remain loyal and more likely to get the most benefit out of what they buy.

Mihaela Akers