What Customers Want Most -- A Choice

"Our studies show that price (17% out of a possible 100%) is nowhere near as important a selection factor as product features (65%); service features (11%), and other features (7%) account for the rest of the decision making."

--Mercer Management Consulting

The current issue of the Mercer Management Journal includes an article titled, "Putting an End ot Ad-Hoc Pricing," by Krishnakumar (KK) Davey,Paul Markowitz, and Nagi Jonnalagadda. There are several key take-aways from this article, among them:

• Customers often will pay a price premium for choice
• Customers often don't know what they want

As does the Fred Reichheld (Bain) research on loyalty -- this Mercer research shows that you can't rely on customers to simply tell you what they value. If you ask them if low price is high on their list of values, they'll say yes. But if given the opportunity to configure a product offering themselves, they'll often consciously raise the purchase price in exchange for attributes they might not have otherwise considered. The article relates example after example of customers pushing price down on their priority lists once they have freedom to elevate other things they value more (but did not know it without help).

Simply having a choice carries a price premium -- which requires bringing into focus what that choice is.

This may also simply be a case of you don't know what you have until you miss it. Customers always have a choice -- even if it's between buying your product, a competitor's, or going without. Yes, they will value the opportunity to select product attributes provided those are brought to the surface -- which is what occurs if they happen to be a subject in a marketing study. The hard part is how to communicate, in the real world, the consequences of the choice. In a B2B environment, those consequences are not always cut-and-dry, and not always easy to convey in the time-compressed world buyers inhabit. But if marketers want enticements other than price to attract buyers, they'll not only have to offer good choices, but communicate what's good about them.