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?
My Small Biz Break partner, Doug, co-owned and operated a fine dining restaurant. He won more awards than any other establishment in the area for dining excellence. A common local perception was that the experience of excellence comes at a high price.
Therefore, the locals perceived as his establishment as the “special occasion place” –birthdays, anniversaries, and holidays. While winning awards was a great ego booster, his analytical business mind feared the thought of serving most people only three to four times a year.
So how did he get around this problem?
1. He knew the competition –what they offered on their menus, the level of quality that they served, the prices that they charged and how it compared to the experience that he offered.
2. He knew that most of his competition would assimilate as the business environment became more difficult. They would shed their uniqueness to offer similar options.
3. He knew the general dining demographics –age, how much money they were capable of spending and how they defined dining value.
4. He knew how the general populous perceived the dining options in the area –including his establishment.
5. He knew that the people in his area were very slow (and downright hesitant) to change their perception.
6. He knew that the power of emotion outranks reason when it comes to making a buying decision.
7. Through public opinion polls and speaking with the dining denizens in the area, he knew that the prevailing perceptions about his establishment equated to the best quality cuisine and service, serving selections that were only found in major metro areas at small town prices (although high for his small town) in the most romantic setting. These are all usually good perceptions, but were perceived as pricey in a down market.
What decisions did he make for his business based upon this knowledge?
First, he had a typical response of trying to follow the herd to the water (i.e. checking to see what his competitors were doing that brought in business that he could do, too –only better). He altered his menu to include some lower priced items, but kept the level of quality in line with our identity.
Then he went to work on educating the public about these options. Although he had some increase in business, it was really just a trickle. The public remained firm in their perception that his restaurant was the special occasion place.
Then, he 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, he would just be spending money to struggle with more competitors and possibly ditching his built up equity of excellence. So he quickly nixed the idea of changing perception in favor of flowing with it.
Had the perception about his business been negative, he would have made different decisions. However, since the perceptions were excellent, he decided it was best (i.e. less costly with quicker results) to embrace the special occasion place perception by creating more special occasions.
He couldn’t create birthdays, anniversaries and holidays, but he 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 he created a reality by altering some options to match the competition, the most profitable results came from understanding and capitalizing on the perception of his unique image.
Are you who your customers say you are? If you answer, no, you need to know why your “realty” doesn’t match up with your customers’
perceptions. Close the gap quickly or risk losing your business.
Maria Smith-Alvira
Small Biz Break
“Simple, Spontaneous, Success”
