Your customers continue to look for outstanding service and value.



We can hardly pick up a newspaper or watch a news program on television without hearing about how consumers are becoming increasingly frugal in the new economy. There is a certain truth to the fact that people are holding their personal finances more accountable than they have in the past. 

However, the facts can be taken out of context and we can quickly believe certain incorrect ideas about our customers.

I’ve heard a lot of so-called “experts” lately preaching that people are only looking for the cheapest possible options for things they are going to purchase. This is crazy. In fact, in any given demographic, people buy based on price alone less than 20% of the time. In our industry, price is typically not even one of the top 10 deciding factors that people use to determine which company to do business with.

Based on this information, why is it we speak to our customers as though everyone is searching for the lowest possible price without regard for quality or experience? Sure, they’re looking for the lowest possible price, but only as it relates to the value they are seeking in exchange for their hard-earned money.

The issue of price arises early and often in the selling process. This usually happens because it’s one of the only things we’ve given our customers to base their buying decisions on. For instance, if you’re still quoting prices over the phone, stop it now. If you give a potential customer a price without any additional quality and value factors, you’re giving him the ability to compare you only based on price. Don’t you want people to know more about your company, your offerings and your value proposition than price alone?

I know, I know, your customers call and request a price and that’s why you feel obligated to give them a “ballpark” number over the phone, sight unseen. One of the reasons they’re asking you for a price is because they don’t know what else to ask for.

This is why we don’t wait for them to ask; we tell them what we want them to know about us. As an industry, we have represented ourselves to the market as a commodity for a long time. The potential customer simply believes that knowing your hourly rate is enough to decide whether he should allow one of your team members into his home. Is this correct?

Of course this is incorrect, but until the greats like Frank Blau and Ron Smith came along and started educating us regarding how to run profitable, responsible and effective businesses, we didn’t know any better. Those days are gone. Now, we do know better! We cannot allow a downturn in the economy to change the fact that we must continue to price our services at profitable levels.

Differentiating value

be. Too often we misinterpret this reality and start thinking we have to race to the bottom with our pricing and positioning. The fact is, we need to spend more time than ever educating our customers and engaging them in the buying process.

Your technicians and salespeople are hearing all the same information from the “doom and gloom” news, and if you’re not careful they’ll begin to believe that people are only buying the cheapest things. Suddenly, every sale you don’t close will be because “our price was too high.” I simply don’t believe this, and my coaching clients are having success in spite of the fact they are never the lowest bid.

What they are doing is communicating their differentiation and value with the prospect better than the low-bidding competitor. What are the specific things that make you different than your competition? Do your technicians and salespeople effectively communicate these unique qualities to your customers? Let me help you answer that one: No, they usually don’t.

It takes tremendously focused effort on your part, coupled with a specific training program, to help your team members become more comfortable communicating effectively with customers. It’s not a one-size-fits-all approach, and it’s certainly not a “one-and-done” training meeting to get the point across. You must train continuously, practicing and refining key statements over and over again.

How do you want your exceptional value conveyed to your potential customer? Do you have a specific service call process, a step-by-step methodology for accomplishing desired results? As we see our clients becoming increasingly frugal, we must incorporate strategic conversations about the things they want to invest in such as safety, security, peace of mind, warranties, etc.

A large number of contractors go out of business every year. Just because they say they have a guarantee for X amount of years doesn’t mean they can honor it - they might not be around! It’s OK to build some examples like this into your sales presentation. Never bad-mouth the competition … ever. Simply explain to your customers why you’re different, how you can best serve them, why they should do business with you (and nobody else) … then ask for their business.

If you begin to feel like consumers are strictly seeking the lowest price regardless of value, you must challenge this line of thinking immediately! You don’t want to start believing in this fallacy and (even worse) modifying your business accordingly. The new economy certainly demands improved communication with customers. Just remember this doesn’t mean people won’t pay a higher price for a higher level of value.

If you don’t believe that people pay for value, look for examples in the marketplace outside our industry. You are a customer, but not necessarily your own customer. I’m currently writing this column from a high-end coffee shop with a consistently long line of people waiting to purchase a commodity they can get just about anywhere else for 50% to 90% less.

The coffee shop realizes that it’s not selling coffee as a commodity to the “cheap” customer. It’s selling an experience, a brand and a feeling to the “frugal” customer. 

Our customers might be frugal, but they will always spend money on the things that matter most to them, such as outstanding service and value. Focus on providing an exceptional experience for your customer in the new economy, and keep in mind that frugal doesn’t mean cheap.

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