Perceived Value

In our last blog post, we talked about what marketing is and how extensive it can be. If you missed the blog, be sure to give it a read to learn more about how marketing includes everything that communicates your value proposition. Today, I want to touch on some of the benefits of taking your marketing seriously. How can a more in-depth focus make you stand out head and shoulders above the other interior designers or painting contractors?

In my last post, I posed the question of why you go to Starbucks for coffee when you could easily pop over to the corner gas station or McDonald’s for your morning cup of joe – at a fraction of the cost. You might do this for taste or convenience, but I would bet for some of you it’s the experience of ordering your coffee. Conversation with your barista or the other people in the shop may be what make you gravitate towards Starbucks. Some may like being able to stride into the office with a Starbucks cup in hand rather than a gas station cup. Many are willing to pay a premium for experience and prestige.

Let’s say you are interested in buying a luxury vehicle. In Denver, Broadway Blvd. is home to almost all of the car dealerships. You could choose to go to a generic dealership to buy a used luxury car, or you can go to their dealership to buy one off the lot. Regardless of where you make your purchase, you will still have a luxury vehicle at the end of the day. Although, the experiences at each of the dealerships will be dramatically different, and the luxury dealership will offer an unquestionably more pleasant experience.

Marketing consists of two areas, direct and indirect. Direct marketing includes magazine ads, direct mail campaigns, and social media marketing, while indirect marketing includes everything having to do with touch-points with the customer and their experience, e.g. phone calls,  showroom environments, the way employees dress, and vehicles.  Some aspects of indirect marketing have a more significant impact on the business than others, but all affect the perceived value your customer has of the business.

Having everyone at a painting company wear a t-shirt in a specific color based on their job elevates them from the “typical” house painters. Showing up in ripped jeans and casual shirts, they would not look like a team. It may not be a huge markup, but let’s say it elevates the company 10% above the average. On $2M a year, that’s $200K! At a 40% gross margin, that’s $80k to the bottom line. So, I guess you could say the little expense of t-shirts brings in a good bit of money.

How is your perceived value? Are you more like the generic brand or luxury?

Nick lives in Highlands Ranch, Colorado with his wife and two boys. He loves learning about business, playing soccer, and traveling with his family (not necessarily in that order). Nick believes highly in systems for everything (even in raising his boys). He loves talking about marketing and LOVES helping others do more, achieve more, and reach their potential. Join Nick each week as he puts down the brush and helps YOU make more money.