Have you ever noticed that the cheapest customers require the most support? I read a blog titled “Why Cheap Customers Cost More” which gave me an Aha! so I had to share it.
Imagine there are two types of customers. Type A are very involved, they study the product category before buying. They look at the features and benefits of different alternatives. They understand the value tradeoffs when they make their decision. They are informed before they make their purchase decision.
Type B customers are not involved. They just want to make a decision. But if they don’t know the differences between the products, then what attribute can they use to make their decision? That’s right … Price. They probably go for the lowest price.
Which customer type is more likely to call your service department with questions? Which customer is more likely to return the product because it didn’t work for them? Which customer will have more user errors? Type B.
Hence the title of the blog. Technical support people use the phrase “it was an ID Ten T error” when referring to user error, to customers who didn’t know what they are doing. When you sell the lowest priced product you are bound to get more type B customers meaning more ID Ten T errors.
The lesson is to not compete on price. Compete on value and win the type A customers.
In case you haven’t figured it out: ID Ten T = ID10T.
Mark Stiving, Ph.D. – Small business pricing expert
Photo by StuartPilbrow