A lot of tradie business owners come to me frustrated that they are constantly missing out on jobs based on price.
They ask how can they stop competing solely on price.
They are sick and tired of working hard for no money (profit) for people who do not appreciate the quality of service they deliver.
They are over being busy all the time and yet, still not achieve their personal financial goals.
For some tradies they have been stuck in this ‘price cycle’ for three, four, five plus years.
Operating in this cycle is depressing, demotivating and unsustainable, especially in a world where compliance, risk and costs are constantly increasing.
So how do we stop competing on price?
Firstly we must understand the internet age has forever changed the way we do business.
Your customers now have access to information about the market you service, pricing, your competitors and your previous customer feedback. This results in your customers having high expectations; not only from the finished job, but from the very first point of communication they have with your business.
You can no longer expect to win a ‘profitable’ job by simply submitting a quote after the date the customer expected to receive it, with limited or missing information, and no follow up.
The first thing I ask business owners who want to break out of the price cycle is when was the last time they reviewed their proposal documentation and process.
Most answer three, four, five plus years ago. In other words they have been lazy.
News Flash – Einstein said it best, the definition of insanity is “doing the same thing and expecting a different result.”
To break the price cycle you must change your thinking and therefore your actions. Increasing your profit is not about selling – it’s about establishing trust, rapport, and value creation for your clients without selling.
For me personally I don’t want to do business with someone who wants to sell their products or services by bombarding me with information.
I want to communicate with someone who wants to understand my needs and solve my problems.
Engage me, communicate with me, add value to my business, solve my problems, create opportunity for me, educate me, inform me, but don’t try and sell me – it won’t work. An attempt to sell to me insults my intelligence and wastes my time. Nobody likes to be sold to, however most reasonable people liked to be helped.
Where can you become the Expert to a Problem?
Many tradies make the mistake of attempting to stand for everything.
They want to do everything well and they want to be all things to all people.
The problem is when you attempt to be known for everything – you don’t become known for anything, placing you back into the price cycle.
To engage, inform and solve problems you must understand the type of person you want to help.
You must become the expert in understanding what is important to your ideal client.
For example, if you are targeting professional couples living in the inner city then consistent communication would be extremely important for this very time-poor market, price is not as important as being professional and on time. Once you understand what is important to your ideal client you must then effectively communicate (educate) that you are the expert in helping them with their problem.
Experts in all fields are very good at educating their customers.
Experts understand that the first problem faced by their ideal client is what information they need to make the right buying decision.
Start educating your ideal client by communicating;
- How you understand their actual problems;
- The pros of your solution versus the cons of a solution based only on price – use photo evidence;
- The positive return on investment for your solution – upfront and ongoing maintenance expenses; and
- The peace of mind choosing quality products backed by warranties and service guarantees.
Final Point – Your Take Away
- Identify what problems you are best equipped to solve profitably.
- Update all your marketing and proposal collateral to effectively educate your ideal customer.
- Educate, educate, educate…
This article appeared recently in ‘What Tradies Want’.
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