How much is customer advice really worth in sales?

"Customers do not appreciate the value of our consultation."

I often hear this sentence and yet it is wrong. I will show you that most customers not only appreciate consultation, but can also name this value in terms of money, and furthermore, how this realization can inspire sales staff to new levels of performance. We have conducted a very exciting study on this, more on that later. Every salesperson knows the fundamental problem. Potential customers seek detailed advice, only to then buy cheaper on the internet. Salespeople in the B2B sector ("I basically designed the entire production facility for them and then, as a thank you, they pushed us down to the prices of the competitor.") experience this, as well as in the traditional B2C environment, such as banks & insurance companies, travel agencies, prefabricated house manufacturers, and electronics stores, to name just a few. Yes, there are customers who do not appreciate consultation. But there are also customers who exchange goods unlawfully or do not pay their bills. But do they represent the majority? Not really. In fact, customers do indeed appreciate the value of consultation and are willing to pay for it. The reason we in sales get a different impression is due to two fundamental errors: Firstly, we are subject to a perception bias. Customers who do not appreciate consultation stand out to us because their behavior annoys us. It is in our human nature that out of fifty positive experiences, the one negative one remains most vivid in our memory, and therefore influences our behavior the most. By focusing solely on the unreliable bargain hunters, we end up shooting ourselves in the foot. And when our thinking and actions are concentrated only on the unscrupulous bargain hunters, we adopt their worldview. At the same time, we ignore the true desires of the majority of customers, those who appreciate added value. The second reason we believe that customers do not appreciate consultation is due to some clumsy attempts in simple studies to measure the value of a consultation. Some associations ask customers if they would be willing to pay for consultation, with the expected result of only a minuscule agreement. This completely ignores human nature. If I ask someone if they would be willing to pay for something that currently has a price tag of "0 euros," they will naturally say no. Why would they suddenly pay for something that is currently free? You would react the same way. Therefore, concluding that customers do not appreciate the value of consultation is a clear fallacy. On behalf of an electronics store, we were tasked with investigating why people sought advice there and still bought cheaper on the internet. Why, then, did customers not appreciate the consultation? We slightly changed the question, as it had not yet been proven that customers did not value the consultation. Rather, the question was how much a consultation was worth to them, that is, how much cheaper an internet offer had to be for them to order elsewhere despite receiving consultation in the store, effectively taking a service from the store. We conducted the experiment in various product categories, all with very similar results. Let's take the example of washing machines here. We observed customers seeking advice in the store. After they made the purchase, we positioned ourselves a few hundred meters from the exit as promoters of a price comparison website's advertising campaign. We offered them the same washing machine at a cheaper price on the internet if they were to immediately cancel their purchase. We made offers ranging from 5 percent to 70 percent based on the base price. Naturally, almost everyone had their limit where they gave in. However, it was fascinating to see where this limit was. On average, this limit was at 22.4 percent! In a follow-up interview, we asked why the individuals hesitated. The main reasons were convenience, as returning the item at the cash register was a hassle (around 18 percent), uncertainty because they were unfamiliar with the other retailer of the otherwise identical product (around 31 percent), and more than half (around 51 percent) felt that the consultation was worth it! The value of the consultation could now be calculated quite easily. We knew the percentage discount required to lure customers away despite receiving consultation, which was 22.4 percent. For washing machines, this resulted in a value of around 108 euros that the consultation was worth to customers. So, customers do indeed appreciate consultation. But what do we do with this information? On one hand, we were able to wonderfully demonstrate to the marketing department that the company did not need to be cheaper than the competition's internet offer, but rather needed to better fulfill the desires of customers, for which they are unconsciously willing to pay, namely convenience, trust, and consultation. We also utilized the unconscious price tag for consultation in sales training. Of course, one can discuss the purpose of consultation, brand image, and customer loyalty for a long time, but nothing convinced the sales staff more and made them prouder than the statement: "Your consultation is worth 80 euros! Every time you advise a customer, it has a value of 80 euros!" Just this statement alone significantly changed the behavior of the customer advisors. They were proud of their work, approached their customers more confidently, and significantly increased the quality of their consultations out of their own motivation. Because only when one appreciates the value of their own work, will the customer feel that value. And the phrase "My consultation is worth 80 euros!" has since become the common team slogan, with which the employees conclude their morning meeting before opening the store doors and starting a successful day.