Deliver more value by optimizing your customer experience. More value = higher prices.

Imagine that you’re walking down the street on a chilly day. You’ve been out for a couple of hours, and the tips of your fingers are getting a bit numb from the cold.

“Man, I’d really love a hot cup of coffee,” you think to yourself.

Great timing! As you turn the corner, you’re confronted by two coffee shops, right next door to each other.

The first shop — let’s call it Joe’s — is, let’s say, less than inviting.

Old, yellowed Formica countertops with metal stools. Bare white walls. An uninterested employee in a stained apron behind the counter, silently taking new orders as if customers were intruding on his time. A sign that reads “Coffee – 99 Cents” hangs on the door.

The second cafe, however, is a bit different. Warm, cozy colors. Big, comfortable chairs with free wifi, and baristas that greet you with a smile and an eagerness to help. A regular coffee here will set you back at least $2.

Which store would you walk into?

This example isn’t fiction; it’s exactly how Starbucks made the world “okay” with paying double or triple (and in some cases even more) for a regular cup of coffee.

They’re not necessarily offering a better hard product than Joe’s. I never go to Starbucks because I’m craving a particular roast of theirs.

Instead, they’ve reinvented the customer experience.

In doing so, they’re no longer competing with Joe’s; the two businesses go after customers looking for entirely different things. And because of that, Starbucks can set prices in an entirely different bracket.

This Isn’t Unique to Coffee

Your customers — all customers — have a choice.

They can choose to do nothing at all.

They can choose to do business with you.

Or they can choose one of your competitors.

What influences their choices?

While pricing is a complex subject that involves psychology, marketing, revenue modeling and more, customer experience is the easiest win you can get that will instantly set you apart from your competitors and let you charge higher prices.

Take a look at these stats:

In Oracle’s 2011 Customer Experience Impact Report, the company cites research that found that 86% of customers will pay more for a better customer experience.

It’s not a fluke; American Express found a similar result in their 2011 Customer Service Survey, with 70% of Americans willing to spend an average of 13% more with companies they believe provide excellent customer service.

And the benefits go beyond those first customers, too: that same AmEx study found that on average, happy customers tell an average of nine people about their experience.

Customer happiness is the best customer retention strategy, period.

A better customer experience adds real value to your offering, which in turn drives customer willingness to spend more money… again and again.

6 Ways to Deliver a Better Customer Experience

No matter what your business does, you can find ways to create a better, more valuable customer experience than your competitors.

Here are 6 examples from companies in a variety of industries.

1) Offer Better Customer Service

Steve Chou admits that he’s cheap. So when he was shopping for an email service provider, he chose MailChimp over Aweber because of the price.

Not soon after, he ran into an issue that Mailchimp support couldn’t fix in time. Guess who was happy to switch and pay more?

2) Build Customer Relationships Offline

Most online businesses use a number of different SaaS products (we use nearly 20 different apps at Groove).

Think about where your interactions with your SaaS providers take place: almost 100% via email, right? Maybe live chat every now and then, or even a phone call from time to time.

But how many SaaS companies “break the digital plane,” so to speak, and extend a warm personal touch to their customers outside of the internet?

That’s exactly what Stride (a CRM tool, which got acquired by the founders of KISSmetrics and CrazyEgg) does when they send handwritten notes to their customers.

By adding a human touch, Stride elevates their customers’ experience beyond what they’d ever expect from a SaaS company.

3) Out-Care the Competition

Every struggling musician desperately wants someone to take an interest in their art.

So when they called CD Baby about selling their music on the site, the CD Baby team would go out of their way to care:

4) Forget “Business Hours”

Your customers’ problems don’t always happen during 9am and 5pm.

When customer service expert James Lloyd arrived at a speaking gig, he realized that he had forgotten his shirt and tie.

With only 40 minutes before he was scheduled to take the stage, James panicked. It was 8:20AM, and none of the stores in the area would be opening for nearly two hours.

After being turned away from a Banana Republic, James was running out of options. Finally, he called the local Nordstrom. Immediately, the woman on the other end of the phone jumped into action, picking out a shirt, having it pressed, and meeting James in front of the store with the clothes he needed to get up on stage and deliver his talk.

The video where James shares his story is worth watching…







5) Solve Your Customers’ Problems Before They’re Customers

HubSpot, an inbound marketing software provider, is not a cheap company to do business with.

And yet, the company has signed on more than 11,500 happy customers.

That success is due — in no small part — to their huge content marketing efforts. HubSpot’s inbound marketing blog delivers valuable insights that help prospects and customers grow their business.

Here’s just one example (of many) of a business explaining why they chose HubSpot:

As a HubSpot customer, you’re not just a user; you’re also a student… and to 11,500 companies, that’s additional value worth paying for.

6) Do the Work for Them

People love to joke about Whole Foods and how the chain can be pricier than its’ competitors. Some have even taken to calling it “Whole Paycheck.”

But here’s a challenge: go into your neighborhood Whole Foods.

Walk up to any employee in any section, and ask them where a particular item is.

They won’t say “aisle 4.”

They won’t point you to another part of the store.

They won’t give you direction on how to find it.

Instead, the employee will walk you to wherever the item you’re looking for is.

You can apply this example online, too.

Does your customer need to follow a link and fill out a form to make updates to their account? Make the updates for them.

Do they need to take steps to troubleshoot an issue they’re having? Set up a screen share on Skype or Google Hangouts and walk them through it.

In fact, a 2007 survey by the Customer Contact Council found that the single most important factor to increasing customer loyalty is reducing the amount of work the customer has to do.

Earn the Right to Charge More

Competing solely on price is a great way to kill your margins and put your business at risk. A larger competitor can easily drop their prices lower than yours.

Competing on product is noble; after all, in a logical world, the best product would always win, right? But things don’t always work that way, and features can easily be copied.

If you want to truly stand out — and earn the right to command higher prices than your competition — you need to compete on customer experience. Make your customers love not only your product, but the act of doing business with you.

If you make them happy and successful, they’ll be glad to pay.