Landscape Management, October 2013

BUSINESS PLANNER 2014 P Î È V È Grow Q HOW DO I AVOID COMPETING ON PRICE BY JULIE GUEST A You send one of your employees to give a potential customer a quote He thanks him for coming but says hell think about it In less than half an hour you receive a call saying he has found someone wholl do the exact same job for less Unless youre willing to sharpen your pencil you just lost the job How many times has this situation happened to you We all know price warfare doesnt just occur with prospective customers Jobs youve had for years can be pulled away from you suddenly all because the customer was contacted by a competitor who was hungrier and more desperate for his business than you were COMPETING ON PRICE IS ENTIRELY OPTIONAL AS LONG AS YOU HAVE THE PROPER MARKETING AND MESSAGING IN PLACE NOT ALL BUYERS ARE DRIVEN BY PRICE IN FACT THE MAJORITY OF PEOPLE ARENT DRIVEN BY PRICE When one of your customers asks you to lower your price youre in a pickle Do you price match that lower quote and leave them with the bad taste in their mouth that theyve been overpaying all those years Or do you try to justify your higher price and hope the strength of your relationship will win them over The real truth is INC you dont ever want to get into these price negotiations in the first place because it puts you in a lose lose situation INTERNATIONAL Youre going to lose precious revenue or a job Heres the great news Competing on price is ISTOCK ILLUSTRATION entirely optional as long as you have the proper marketing and messaging in place Not all buyers are driven by price In fact the majority of people arent driven by price If they were Wal Mart would likely LANDSCAPEMANAGEMENT NET OCTOBER 2013 84 be a hundred times bigger than it is and companies such as Apple which charges 3000 for a new computer wouldnt exist The simple and game changing fact for your business is people only revert to buying on price when they have no other information available Theres a segment of the market that only buys on price It doesnt matter how good you say your services are or how great the quality of your workmanship is theyre never going to choose your company because youre a smidge more expensive than the other guy Frankly you dont want these bottom feeders as your clients anyway Theyre usually the most demanding customers the least appreciative and the least likely to refer your services Let the other guys in your market provide services to the extremely price sensitive crowd They can slash their prices and fight among each other to see whos most desperate for business In almost any industry the bottom feeders account for 40 percent of the market The rest of the market which accounts for more than half can afford and will pay more for your services if you can provide them compelling reasons to This is why having the right marketing becomes so important But dont make the mistake of thinking you can just hike your prices and expect to achieve a similar result You must have a solid marketing program to back it up Heres how to do it in three easy steps