***FAIR WARNING: THIS IS A LONG BUT VITAL TO YOUR BUSINESS EMAIL***
In a recent study of over 1000 consumers when asked “How much more are you willing to spend for their products or services if you know the company or brand has an excellent customer service experience?”
51% said they would pay more. Here is the breakdown
- 25% said they would pay between 1-10% more. Pfui!
- 10% said they would pay 11-20% more. Now we are talkin’!
- 8% said they would pay 21-30% more. I like that even better
- 8% said they would pay 31%+. Music to my ears.
Since this was a nationwide survey, let’s assume that these stats will carry over to your city, town or marketplace. And for the sake of discussion, let’s forget about the 1-20%ers. NOTE: DO NOT FORGET ABOUT THEM. we are just leaving them out of THIS conversation.
16% of the population is willing to pay 21% to over 31% more for your service than that of inferior competitors.
Why are these numbers important?
First, this is a great place for you to start with your target market. Instead of marketing to the great unwashed masses, you can laser target your marketing to just 16% of your population. But let’s overlay a few more numbers to make sure this is really dialed in.
Does Age Make a Difference? Who values customer service enough that they would pay more? The winner is…
- Gen Z! 61% of our youngest generation (ages 18-25) said, “Yes, I would pay more if I knew I would receive great customer service.” They want value, and part of that value comes from their experience.
- Millennials (ages 26-44) came in second at 57%.
- Gen X (ages 45-56) came in third at 53%.
- Baby Boomers (ages 57-65) came in at 35%
Let’s add in one more set of numbers: Does income make a difference?
- 42% of those making less than $20K said, “Yes.”
- 56% of those making $20-34K said, “Yes.”
- 51% of those making $35-74K said, “Yes.”
- 56% of those making $75-99K said, “Yes.”
- 62% of those making $100-149K said, “Yes.”
- 51% of those making $150-199K said, “Yes
To make it easier let’s just say that for those making under $75K, almost 50% said, “Yes.” For those making $75K and under $200K, 56% said, Yes.
How can you use these numbers? Well it is going to be different for different industries.
For example, in my carpet business, I do NOT target Gen Z, even though they are the highest age demographic. Most people in this category do not own a home. They either rent, or worse, live at home with momma.
I also know that my target home value is north of $350k. That would eliminate pretty much everyone making less that 99k.
So my target are people who are homeowners older than 35 making more than 100k. All of my marketing will be customized for this demographic. And 16% of them are willing to pay more than 20% more for my great service.
In my area there are 35,000 homes in that demographic. 16% of them (6,000) are willing to pay 20% or more more for my carpet cleaning services. At the moment, I only have the capacity to do 1700 jobs a year.
And I can niche that 6,000 down even further by age, sex and net worth (an important # if you market to retired people, as most retirees don’t have an “income” per se) to further customize my marketing.
Are ya confused? Let me boil it down to this. More than 50% of the population is willing to spend more for a better experience with you.
I am considering doing a Minnie Mouster Class on this. If you are interested, and enough people respond, I will create the class.
Reply to this email if your are interested.
