What value does your business bring to the marketplace? Most business owners think this applies only to their product or service and that would seem to make sense on the surface. What I want to discuss is both the perceived value and the real value.
Real value is: “ I cleaned your carpet for $100 and now you have a clean carpet that looks a $100 cleaner.
A perceived value is:
“The carpet cleaning company got back to me with an estimate right away. They scheduled me quickly and even were able to change the time when I couldn’t be home. They are totally environmentally conscious with their products and equipment. They have really nice vehicles, they wore shoe covers whenever they were in my house. They have fantastic professional looking uniforms. I received a beautiful thank you card after they finished and they offered me a discount on my next service and a discount for a friend. They also noticed some stains in my sofa and were able to take care of that at the same time, saving me some more money. All this was only $200!”
That is perceived value.
I see most companies bringing only real value to the marketplace. Those who sell only based on price. They chase work constantly and work never chases them. They’re about getting in and getting out. They don’t ever build a relationship with their clients. Their low price mindset doesn’t enable them to grow their brand or company. Their equipment begins to be in disrepair because they can’t afford upkeep. Their overall appearance begins to dwindle also due the lack of funds. They tell themselves they’ll take care of it after the next job and never do.
They brag on 90% close rates and don’t realize that’s because they’re bidding on low prices only. There are plenty of people who want to pay as little as possible for a service and quality is not their highest priority. There’s also plenty of people who would look at that same company and think “I wouldn’t even let them in my driveway.”
It’s very difficult to change the mindset of the low bid business. They’re always going to be out there, that's just reality. I was speaking with a sign company in my area who did great work and was incredibly cheap. I’m talking a third the price of anyone else. He too bragged of getting 9 out of 10 bids. I told him that’s because of his low prices and he was doing himself a real disservice. He was struggling to get the work done as it was. He said he couldn’t handle any more work. The fix is simple. I told him, raise your prices. He disagreed with me.
Even if he doubled his prices he was still cheaper than everyone else and remember he did fantastic work. I ran some general numbers by him on what he could expect in return for raising his prices and he still couldn’t accept it. I showed him how to drive value to his clients just by demonstrating his vast portfolio of work and satisfied customers along with his speed of completion time but it was still a no. There was nothing else I could do for him. He was a poverty-mindset guy and beyond my help.
Value is perceived. A person seldom, if ever, pays for a product because it is worth exactly what they paid for it. It is always worth more than what they paid for it, that's why they bought it. Know that value isn’t always a dollar amount, as a matter of fact it seldom is. If there isn’t value attached to a product beyond price, ask yourself why someone pays $80,000 for a car instead of $10,000. They both run and get you where you want to go so why the price difference? Yes there’s mechanical differences in engines, body style, etc. but not 70k worth. They pay for the prestige, the way they feel when they sit inside of it and the way people look at them. Having something others can’t is a big motivator for people. They’ve been told it’s better and they see other successful people driving them.
You can do this with your business too. You can build value from the ground up. Uniforms, vehicles, sales presentations, testimonials, high quality products and services, rapid delivery time and outstanding customer service and follow up. These are just a few things that make you a head above the rest. If you’re looking to start changing the perception of your company from low bid to high value just pick one area and change it. Then continue to implement changes one by one and watch what happens. Your referral rates will go up along with your prices and people will be happy to pay them.
This is a big mindset shift so you need to be committed to a full on change and that goes for everybody in the company. You may even need to get rid of some people who aren't capable of this shift. A cornerstone of this change will also be based on delivery of a high quality product or service. You can’t tell people how great you are then deliver sub par service and products. This isn’t smoke and mirrors, you have to be legitimate. I don’t know many businesses that actually want to deliver a low quality product or service. I know they’re out there, I'm just not drawn to them. I’m sure if you’re reading this you’re not one of those people either.
The key to success is presentation and consistency in your brand while delivering your message. When you bring this kind of value to a customer they are happy to pay your price.
One saying I like to remind myself of is “If I’m selling a $10,000 product I better have a $13,000 presentation.”
Bring a high value experience to your business and not only will you create raving fans but your prices can rise to meet that value increasing your profits and your ability to grow.
