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10 years ago
It was my 43rd birthday, and purely by coincidence, I got an invitation to tour a car factory on the same day.
Couldn’t be any better...
Well it could, but unfortunately Elle McPherson had a prior engagement. That’s what she said anyway... but can you ever really trust an Australian?
No matter, the car factory was a good second best, so off I set (with a business associate Lord Alderley... whose birthday it wasn’t, but who had still chosen Rachel Hunter as his first choice activity for the day, just in case she was free) in plenty of time, but with a palpable foreboding...
You see, whenever we get together, we don’t have a great deal of luck getting places on time.
Every journey longer than about 3 miles seems to be interrupted by a major road accident, a train de-railment, a terrorist scare, a tropical downpour... or some other disaster that turns a simple two hour trip into an eight hour epic.
But that day we were in luck - sort of...
The expected 2 hour journey ‘only’ took two and a half hours, which for us, was something of a triumph. However, it did mean that the planned relaxed pub lunch had to be replaced with a rushed petrol station sarnie, bag of beef crisps and carton of Ribena with a straw...
I’m a grown man for God’s sake!
Anyway, I was still devouring the remnants of this feast when the factory loomed into view. Now normally that wouldn’t have been a problem, but there are a couple of things I haven’t told you yet.
It was the Bentley factory at Crewe, and we were arriving in Lord ALderley’s beautiful silver Bentley Arnage.
Now one of the privileges bestowed upon anyone turning up at the Bentley factory in one of their cars is that they let you park up right in front of the main reception... and you’re greeted!
And sure enough, as we neared the main entrance, there was a small party of company executives and other guests waiting for us. Even someone with my limited knowledge of etiquette sensed that arriving in front of the Bentley Motors Ltd reception, sitting in one of their finest cars... while munching on a Ginsters Cheese and Pickle Special, still in its plastic container... was probably not going to look too good.
And so I was still frantically trying to stuff the gory evidence of my indiscretion into the glove box as we were waved into position. I made it just in time.
Next time you see someone gliding past in a Bentley, looking impossibly rich and sophisticated, hold that image in your mind. In all likelihood, they’ll be hiding some fast food horror, just out of view.
Anyway, we were ushered into the offices for tea and biscuits, (proper chocolate ones... definitely not from Netto) before moving into the factory.
They call it a factory, but bits of it look more like a showroom. Clinically clean, not a thing out of place... and quiet! It’s about as far away from the typical image of a mass production assembly line as you can get.
On the way round, I learned some fascinating stuff...
Every Bentley Arnage takes 14 weeks to make from start to finish, and just 30 cars are completed each week. The wood trim alone takes 11 weeks to make, and the company have 86 people working on that aspect alone.
All the veneers for an individual car are cut from a single piece of 80 year old timber. If just one of the veneers (say for the ashtray cover) gets spoiled in production, then all the other wood pieces for that car are scrapped, and they start again. Everything has to match perfectly. Even the pieces you can’t see (like the underside of the picnic tables) are finished to the same standard.
Fourteen cow hides are used to trim the interior of every car. I watched as staff painstakingly inspected every square inch of every hide. The slightest blemish results in a hide being rejected. It has to be totally perfect.
We went into the engine workshop and watched the engines being built from scratch. Some of the parts you never get to see are like works of art... perfect in form and finish. The gearbox control unit alone consists of over 130 separate parts. We spoke to the bloke who puts the units together. He’s been there for 28 years, and has assembled every unit personally over that time. That’s all he does.
As we got to the finishing area, we watched as every panel was exposed to very bright lights and examined in minute detail for the merest hint of a paint defect. The slightest imperfection resulted in a piece of sticky tape being applied and a trip back to the paint shop.
Nobody else would notice, but that doesn’t matter.
Every single aspect of the car is built with perfection in mind, and is then subjected to microscopic inspection to ensure that those standards have been met.
And here’s what’s interesting...
At that time, the Bentley Arnage cost around £150,000 brand new, which is a great deal of money. But everyone who tours that factory leaves with a far better understanding of why they are so much more expensive than the competition... and why they’re probably worth the difference.
The visit...organised by the Marketing Department not surprisingly...serves to justify the price.
You see, your average multi-millionaire didn’t get rich by having people overcharge him for stuff. He might be able to afford 10 cars at £150,000 each, but he’s only going to buy if he can see the value, and he’s certainly not going to buy if he feels the company are trying to rip him off.
But when he’s told how long the car takes to make, sees the attention to detail that goes into it, and the quality of the materials which are used, (even in the areas he can’t see) the high price becomes one that he can justify to himself.
You get what you pay for, and he can see very clearly why what he’s paying for costs as much as it does.
Now, what does this mean to you and your business? Well if you’re anything like me, it probably means that when you look at what Bentley do, you realise you’re not doing enough to help customers appreciate the value of what you’re selling, or to help them justify the price they’re paying.
Let’s take one of my university correspondence courses as an example...
They could tell prospective students that the course took over a year to prepare, cost over £25,000 in editorial fees, and gives them unlimited access to experts with a combined experience of 87 years in the field. All for just £150...
Which may seem a lot of money - until you learn what goes into it.
But do they tell them that? Sadly, for both them and me, they do not. Sadly for them because they’d sell more courses if they did, and sadly for me because they’re not giving me all the information I need to justify a purchase to themselves.
If you look at your own business, I’m sure you’ll see similar opportunities lost.
Are you telling your customers things like...
* How long your product takes to produce?
* How far afield you go to get the very best materials?
* How long you, and your staff, had to train to do what you do?
* What lengths you go to, to ensure quality?
* How passionate you are about attention to detail?
* How much money you’ve invested to be able to bring them a product/service like this?
These are just examples of course, which might not necessarily be applicable to your business. But the point is that there is probably information about your product/service and the way it is produced/delivered, which would differentiate it from the competition, and make customers more comfortable making the decision to buy from you... even if your prices are a little higher.
In competitive markets, the temptation to compete on price is a strong one - but it’s usually wrong. Fact is that your profit margins get cut to the bone, and everyone else just follows suit. Great for the customer, but not so good for the businesses which end up working for nothing.
It seems to make a lot more sense to follow Bentley’s example... stay with your premium price, but give your customers as much detailed information as you can to justify your price, and make them want to do business with you.
This idea isn’t new, and you don’t have to have a massively superior product like Bentley to make use of it...
In his book Scientific Advertising, first published in the 1920s, Claude Hopkins tells the story of a brewer who multiplied his sales by demonstrating the purity of his product. He used a photograph of a plate glass room where his beer was cooled in filtered air. He told how bottles were washed 4 times by expensive machinery and how he went down 4,000 feet to get pure water. He explained that 1,018 experiments had been carried out to make yeast to give a matchless flavour. And how all the yeast they used was forever made from that adopted mother cell.
Very persuasive information, I’m sure you’ll agree...
But what’s really interesting is that there’s nothing special about any of this. All brewers at the time were doing pretty much the same thing. It’s just that this one was the first to go to the trouble of telling people about it.
Even in the 1980s, the brewers of Stella Artois used a very similar approach to justify the comparatively high price of their lager. They went into great detail in their advertisements about the quality of the hops, the length of the drying process and the experience of their brewers, before stating that their product was “reassuringly expensive”.
For all I know, the various processes they described could have been ‘industry standard’, but it didn’t really matter. The perception of a superior product was firmly planted in customers’ minds, and they felt comfortable paying the higher price because of that.
So here’s a question for you...
Is there something fascinating or impressive in your sphere of business which everybody does, but nobody has bothered to tell customers about yet?
If there is, you could ‘claim’ it for your own, and use it to justify your higher price, or to avoid matching a price cut made by your competitors.
The bottom line on all of this is that the more you can tell people about the time, trouble and expense you go to, to bring them a first class product or service, the more comfortable and willing they will be to pay your price.
I was wondering how I could apply the principle to this blog site, but then I remembered... it’s free!
Aren’t you the lucky ones?
Very Best Wishes...
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