One of the best means for increasing business is to realize the power of perception. Reality generally has little to do with facts. Most people (i.e. your customers) often live in a reality of blending beliefs with perceptions of the environment.
Once you accept that we live in a world of perception, and tap into how the market perceives your business, you will become a master at making appropriate business decisions.
Want a real world example?
I co-own and operate a fine dining restaurant. We have won more awards than any other establishment in the area for dining excellence. A common local perception is that our experience of excellence comes at a high price. We are therefore perceived as the “special occasion place” – birthdays, anniversaries, and holidays. My ego loves the awards, but my analytical business mind fears the thought of serving most people only three to four times a year.
So how do I get around this problem?
1) I know the competition – what they offer on their menus, the level of quality that they serve, the prices that they charge and how it compares to the experience that I offer.
2) I know that most of my competition will become more similar as the business environment becomes more difficult. They will shed their uniqueness to offer similar options.
3) I know the general dining demographics – their age, how much money they are capable of spending and how they define dining value.
4) I know how the general populous perceives the dining options in the area – including my establishment.
5) I know that the people in our area are very slow (and down right hesitant) to change their perception.
6) I know that the power of emotion outranks reason when it comes to making a buying decision.
Through public opinion polls and speaking with the dining denizens in the area, I know that the prevailing perceptions about my establishment equate to the best quality cuisine and service, serving selections that are only found in major metro areas at small town prices (although high for our small town) in the most romantic setting. These are all usually good perceptions, but are perceived pricey in a down market.
What decisions did I make for my business based upon this knowledge?
First, I had a typical response of follow the herd to the water. What are our competitors doing that brings in business that we can do, too – only better? We altered our menu to include some lower priced items, but kept the level of quality in line with our identity. We then went to work on educating the public about these options. Although we had some increase in business, it was really just a trickle. The public remained firm in their perception that we were the special occasion place.
Then, I briefly dabbled with the idea of re-opening with a new theme at a lower price for the consumer. But, this is a costly proposition and with the other tiers of dining suffering, we would really just be spending money to struggle with more competitors and possibly ditching our built up equity of excellence. So I quickly nixed the idea of changing perception in favor of flowing with it.
Had the perception about my business been negative, I would have made different decisions. But since the perceptions were excellent, I decided it was best (i.e. less costly with quicker results) to embrace the special occasion place perception by creating more special occasions.
We couldn’t create birthdays, anniversaries and holidays, but we did create wine tastings, wine dinners and private parties – opportunities to taste unique cuisine coupled with wine not offered anywhere else and at a higher price. The results were excellent.
So even though we created a reality by altering some options to match the competition, the most profitable results came from understanding and capitalizing on the perception of our unique image.
Are you who your customers say you are? If you answer, no, you need to know why your “reality” doesn’t match up with your customers’ perceptions. Close the gap quickly or risk losing your business.
All The Best,
The Solopreneur’s Guide