November 8, 2022

Purchase Options and Perceived Client Value at the FedEx Store

Yesterday I unexpectedly needed to get a document completed, notarized on behalf of a client, and sent for next day delivery. I dropped by a FedEx store, told the gentleman behind the counter that I needed an overnight letter sent, and gave him all the necessary details.

Once he’d entered everything, he said, “that will be $31, and it will arrive by 5 pm.”

“Is that the fastest option you have?” The earlier in the day, the better, I thought, for this particular document.

“Yes, we can get it there by 10:30 am for $34,” he said. “I thought you would want the cheapest price.”

I replied immediately, “let’s get it there early.”

Here’s an example of the power of not only offering options but withholding too much judgment of the buyer. For whatever reason–maybe I just had a cheapskate look on my face–the gentleman helping me didn’t offer any options. If I hadn’t asked, then that added revenue would have been lost.

The stakes for FedEx in this one transaction were infinitesimal. For solo and small professional services providers who deal in much larger ticketed transactions, not offering options could mean much more.

Here’s another takeaway from this transaction. Let’s break down the service I was purchasing. Based on what the man told me, I knew I was already paying $31 for the delivery itself. To make sure that the document got to the recipient early enough in the day for quicker action on the document, however, I paid $3. In my case, I judged the value received from that added speed was much more than $3, so the decision was an easy one.

When you offer options and price them appropriately, you make it easy for your prospective client to go through the mental math of comparing their perception of the value of extra benefits received in the enhanced option vs. the added price paid. If they perceive significant added value, like I did, it will make the upgrade decision an easy one. You as the service provider, of course, will make more revenue than you would have otherwise.

Even more important, though, you will have serviced your clients more effectively, because you’ll have given them choices which better match their wants.

 

 

Image created using Craiyon (Formerly DALL-E Mini)

(This blog post was also posted on LinkedIn.)

©Ray Business Advisors, LLC and John Ray

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About me: I help solo or small professional services firm owners with the confidence and positioning necessary to improve their pricing and change the trajectory of not only their business but their life.

I have a podcast called The Price and Value Journey, which features interviews with industry leaders and audio versions of my blog posts. You can find the podcast on your favorite podcast app.

I also have a book coming out in 2023:  The Price and Value Journey: Raise Your Confidence, Your Value, and Your Prices to Grow Your Business Using The Generosity Mindset.

For more information, go to PriceValueJourney.com