perceived value Archives - Shep Hyken | Customer Service Expert

My friend Norman Beck sends me interesting articles and newsworthy information regularly. This one is worth talking about here. A grocery store chain had a sign in front of its entrance that read:

Free Delivery – $99 a Year!

I had to smile – even laugh out loud – thinking of how many people would roll their eyes when they read that sign. It’s not free if you have to pay $99 for it! But some brilliant marketers must think the public won’t know the difference. Perhaps a better sign would have read:

Unlimited Delivery – $99 a year!

I’ve shared similar information about this in the past. How often are we told a company offers free delivery, free returns, free refills on soda … you get the idea. It’s not really free. It’s in the price you pay. I’m okay with that, and it’s actually a pretty good marketing strategy that works. As an example, if I order a soda at a restaurant, I like the idea of refills. But are they free refills? Or are they unlimited refills? Either way, I’m happy. It’s just that one is a more accurate description of the value provided. So, consider this simple concept. For any business to make money, it has to charge for whatever it sells. By giving too much away, it would lose money. But if the company leaders know how much they can give away without losing money and incorporate it into a competitive price, they may have a value proposition that gets and keeps customers. Southwest Airlines is the perfect example of this. It markets the heck out of Two Bags Fly Free®. Southwest knows that when other airlines charge for something that they don’t, it can be perceived as free. By keeping operating expenses low, they can charge a competitive price for an airline ticket that doesn’t require the customer to pay extra for checked baggage. After reading this, some of you may think I’m against free. On the contrary, I’m a huge fan of free. Even if I have to pay for it, if the perceived value is that it’s free, that works for me. I just think that we should be careful about putting a sign in front of a store that basically says you have to pay $99 for “free” delivery. And, while I’m talking about free, there is one other form of free that I love, and that’s hassle-free, something I know your customers will love too. Shep Hyken is a customer service/CX expert, award-winning keynote speaker, and New York Times bestselling author. Learn more about Shep’s customer service and customer experience keynote speeches and his customer service training workshops at www.Hyken.com. Connect with Shep on LinkedIn.

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