Difficult Questions, Part One
Every business leader has
to answer these questions.
When launching your business, you probably never considered what your core product would be. If you’re a plumbing professional, it’s a cinch that you’ll go into the plumbing business. If you’re an HVAC professional, then HVAC is your business. On the other hand, many, perhaps most, highly successful entrepreneurs begin with, “What business offers the highest profit for the least investment?” without limiting themselves to a specific craft.
But we’re trade professionals, so we’re going to run with our own professions. Knowing what you’re going to offer might get you off the hook for that first question, but you still have some tough questions to face. This month we’re going to explore one of those questions: Why me?
You may be thrilled at seeing that your marvelous moniker is unique enough to be available. But you’re also staring at the other 379 plumbers in the book. That’s enough plumbers to take care of every plumbing call in town before lunch, if the calls were evenly distributed. This head count raises the difficult question that you must answer: “Why me?” With 379 possible choices, why should a customer feel compelled to pick you out of the crowd? What makes you so special?
Before we answer this, we need to barbecue a sacred cow: your trade license. That framed piece of parchment hanging on your office wall may remind you of all the hard work, training and experience you’ve accumulated, but it is meaningless as a reason for customers to pick you over the other 379 licensed contractors in the book. As far as a customer is concerned, none of the crowd would be in the book if they didn’t have a license. Your competitors may not know the difference between a P-trap and a urinal, but if they hang out a shingle that says “licensed,” customers assume they know what they’re doing, at least until the person shows up.
A license says little more than “this warm body managed to scratch together enough coin and correct answers to achieve the minimum qualifications of a licensee.” Not very impressive. A consumer might view the license as evidence that the contractor is able to repair everything but a broken heart and the crack of dawn, but they’ll see it that way for every licensee. They won’t know competence from incompetence. All this means is that your license does little to give you a point of differentiation.
More importantly, “low price” is practically a death sentence if you’re trying to launch a new company. Because you hang out at the supply house, you know that Merely Adequate Plumbing & Drains charges $100 while Cash Extractor Service Co. charges $300. But does your customer know? Do you, or anyone else, know which company actually offers the best value?
Here’s a far greater danger in trying to compete on price: There will never be a leaner time in your business cycle than when you’re in the early years of your business. Your marketing budget will take its biggest bite out of your sales during your early years. Your sales production will struggle until the phones begin to ring reliably. Your payroll will be disproportionately high. As a start-up, nearly all your overhead will require a higher percentage of your sales than it will after you’ve been established for a while.
Yet nearly every new contractor I talk to tells me his magic strategy is to charge a little more than the cheapest but not as much as the “big guys.” The bad news for those contractors is that low price won’t drive customers to their phones but will cripple their businesses. Let’s look at ways to make your business different, but be prepared to be underwhelmed with the methods.
But a few years later the message was driven home when I happened to overhear a customer of mine talking about what a great plumber I was. The conversation went something like “He’s the best plumber we’ve ever had . . . he left the bathroom cleaner than when he found it!”
Are you kidding me? I had repaired their old Eljer toilet - you know, the model with the china flush valve seat. I have a master plumber’s license. I have years of experience. I have a truck full of tools and materials. I can diagnose and troubleshoot just about any problem you can throw my way. But in my customers eyes I’m “great” because I know how to use a mop and a rag.
What’s truly amazing is that decades later, being neat and tidy is still one of the top ways to be better and unique. Even though it’s not glamourous or expensive, being clean still gives customers a reason to call you instead of the other guys.
Punctual means keeping to the appointed time, while prompt means without delay. In the service business, we can drop everything to handle the emergency calls, which require prompt attention. If we had lights and sirens, we would run every call that way.
Emergencies present their own kinds of challenges, but emergency service isn’t nearly as important as simply being on time. The harried homeowner of today juggles career, club meetings, the gym, soccer practice and school meetings. The last thing he wants to do is wait for a contractor who can’t tell time.
Punctuality requires planning and commitments. Contractors who do it well stand out and earn referrals. Contractors who can’t manage it end up lost in the crowd.
Customers will always have a choice, so discovering or creating the difference, the reason customers should call you instead of the other guys, will always be one of the biggest questions you’ll have to face.
When launching your business, you probably never considered what your core product would be. If you’re a plumbing professional, it’s a cinch that you’ll go into the plumbing business. If you’re an HVAC professional, then HVAC is your business. On the other hand, many, perhaps most, highly successful entrepreneurs begin with, “What business offers the highest profit for the least investment?” without limiting themselves to a specific craft.
But we’re trade professionals, so we’re going to run with our own professions. Knowing what you’re going to offer might get you off the hook for that first question, but you still have some tough questions to face. This month we’re going to explore one of those questions: Why me?
Why Not No. 352?
Let’s say you decide to open a plumbing service shop. One of the easy questions you need to answer is what to name your company. It’s likely you’ll already have a name in mind, one you’re convinced will have customers burning up your phone lines. To check for similar names, you’ll look in the local Yellow Pages directory, where you’ll feel some relief when you see that none of the 379 other plumbing contractors has a clever name like the one you’ve picked out.You may be thrilled at seeing that your marvelous moniker is unique enough to be available. But you’re also staring at the other 379 plumbers in the book. That’s enough plumbers to take care of every plumbing call in town before lunch, if the calls were evenly distributed. This head count raises the difficult question that you must answer: “Why me?” With 379 possible choices, why should a customer feel compelled to pick you out of the crowd? What makes you so special?
Before we answer this, we need to barbecue a sacred cow: your trade license. That framed piece of parchment hanging on your office wall may remind you of all the hard work, training and experience you’ve accumulated, but it is meaningless as a reason for customers to pick you over the other 379 licensed contractors in the book. As far as a customer is concerned, none of the crowd would be in the book if they didn’t have a license. Your competitors may not know the difference between a P-trap and a urinal, but if they hang out a shingle that says “licensed,” customers assume they know what they’re doing, at least until the person shows up.
A license says little more than “this warm body managed to scratch together enough coin and correct answers to achieve the minimum qualifications of a licensee.” Not very impressive. A consumer might view the license as evidence that the contractor is able to repair everything but a broken heart and the crack of dawn, but they’ll see it that way for every licensee. They won’t know competence from incompetence. All this means is that your license does little to give you a point of differentiation.
What Are Low Prices?
While we’re eliminating nondifferences, let’s talk about price. Consumers are numbed and immune to the whole concept of low price so when a contractor advertises the “lowest price in town,” the customer automatically assumes there’s a catch. I shouldn’t even have to mention this topic but I’m compelled to for one reason: Nearly every start-up contractor that calls tells me he wants to stake out the “low price” territory in order to get established. “Low price” does not give a customer a reason to call you because he really doesn’t know what the price ought to be in the first place.More importantly, “low price” is practically a death sentence if you’re trying to launch a new company. Because you hang out at the supply house, you know that Merely Adequate Plumbing & Drains charges $100 while Cash Extractor Service Co. charges $300. But does your customer know? Do you, or anyone else, know which company actually offers the best value?
Here’s a far greater danger in trying to compete on price: There will never be a leaner time in your business cycle than when you’re in the early years of your business. Your marketing budget will take its biggest bite out of your sales during your early years. Your sales production will struggle until the phones begin to ring reliably. Your payroll will be disproportionately high. As a start-up, nearly all your overhead will require a higher percentage of your sales than it will after you’ve been established for a while.
Yet nearly every new contractor I talk to tells me his magic strategy is to charge a little more than the cheapest but not as much as the “big guys.” The bad news for those contractors is that low price won’t drive customers to their phones but will cripple their businesses. Let’s look at ways to make your business different, but be prepared to be underwhelmed with the methods.
Cleanliness
It’s been more than a quarter century since Plumbing & Mechanical began publishing stories about contractors who were unique in the way they served their customers. One of the “craziest” ideas I read about back then was the use of shoe covers when inside a customer’s home. I’ll admit that when I first read about the concept my initial thought was, “Are you kidding me? I’m a plumber, not a sissy!” or something like that.But a few years later the message was driven home when I happened to overhear a customer of mine talking about what a great plumber I was. The conversation went something like “He’s the best plumber we’ve ever had . . . he left the bathroom cleaner than when he found it!”
Are you kidding me? I had repaired their old Eljer toilet - you know, the model with the china flush valve seat. I have a master plumber’s license. I have years of experience. I have a truck full of tools and materials. I can diagnose and troubleshoot just about any problem you can throw my way. But in my customers eyes I’m “great” because I know how to use a mop and a rag.
What’s truly amazing is that decades later, being neat and tidy is still one of the top ways to be better and unique. Even though it’s not glamourous or expensive, being clean still gives customers a reason to call you instead of the other guys.
Punctuality
Being neat and tidy requires you to budget a little extra time and a little extra money for cleaning materials. Punctuality is an equally important point of differentiation but isn’t nearly as easy to incorporate. There may be some confusion between “punctual” and “prompt,” so first let’s pin down the definitions.Punctual means keeping to the appointed time, while prompt means without delay. In the service business, we can drop everything to handle the emergency calls, which require prompt attention. If we had lights and sirens, we would run every call that way.
Emergencies present their own kinds of challenges, but emergency service isn’t nearly as important as simply being on time. The harried homeowner of today juggles career, club meetings, the gym, soccer practice and school meetings. The last thing he wants to do is wait for a contractor who can’t tell time.
Punctuality requires planning and commitments. Contractors who do it well stand out and earn referrals. Contractors who can’t manage it end up lost in the crowd.
Bright Colors And Puppies
Cleanliness and punctuality are near the top of the list of points of differentiation but there are many other ways to be different. Some contractors use brightly colored trucks, catchy jingles, or pictures of cute babies or puppies. These methods may get a customer to call once, but then the question becomes: Will he call you back and will he recommend you to his friends?Customers will always have a choice, so discovering or creating the difference, the reason customers should call you instead of the other guys, will always be one of the biggest questions you’ll have to face.
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