When competition is ruthless and everyone offers more or less the same services and abilities, it’s hard to separate from the pack. So once in a while, it just might pay to do something that defies conventional wisdom. Here are some ideas.
1. Let the customer name the price.I once heard of a restaurant that had no prices on the menu. Instead was the notation, “Pay what you think the meal was worth.” Most customers were afraid of embarrassing themselves by underpaying, so they tended to offer more than other restaurants were charging for similar fare. The owner made more money than he did in previous tries at the restaurant business with conventional menu prices.
Construction contracting is a lot different than running a restaurant, and I’m certainly not suggesting you could get by inviting customers to name their own price for everything you do. Yet, this example does serve to illustrate the concept of value. Most people underestimate what customers would be willing to pay for services if they had no frame of reference. Competitive bidding provides that framework, which is why you’d be better off pursuing negotiated jobs to the greatest extent possible.
2. Give it away for free.Budget a certain amount of work to give away each month for free to churches or charitable institutions. Involve your customers by inviting them to nominate deserving recipients.
You might end up giving away thousands of dollars a year in charitable service. Think of it as a form of advertising. What’s more likely to endear you to customers — an advertisement costing thousands of dollars a year, or the same money spent on charitable offerings and attendant publicity?
3. Reward complaints.Debra Koontz Traverso is a marketing consultant and author of Outsmarting Goliath: How to Achieve Equal Footing with Companies
That Are Bigger, Richer, Older and Better Known. She tells of helping a Philadelphia bar owner establish a complaint system from patrons. Each month the winner’s picture was placed on a Complaint Wall of Fame. The program was talked about around town and written up in a daily newspaper.
All of you get complaints whether you want them or not. Consider holding a contest similar to that bar’s, with a suitable award for the best complaint of the month, quarter or year. Criteria should focus on pointing out a genuine shortcoming in your services, especially one that leads to a constructive solution. Treat the winner to a restaurant certificate and publicize the results to the local press and in a customer newsletter. Give second, third and honorable mention prizes to other entrants consisting of discount certificates to your own company’s services.
Naturally, you don’t want to go overboard publicizing incidents of poor performance on your part, especially where legal issues may be at stake. Focus instead on drawing attention to misunderstandings or minor goof-ups that everyone can identify with. Tell what actions you took to correct the problem and make sure it doesn’t happen again.
4. Create more customer awards.You don’t have to limit them to “Best
Complaint.” Hold contests for “Nicest Customer,” “Best Landscaping,” “Cutest Pet,” etc. Have your work crews nominate people for these awards. Be sure to publicize the heck out of them. Become known as the “fun company” in your business.
5. Make a virtue out of high prices.Nobody gets sticker shock browsing around in a Tiffany’s jewelry store or a Rolls Royce dealership. That’s because if they did, they wouldn’t be there. Some businesses thrive on charging high — even outrageous — prices, because they cater to the “if you have to ask, you can’t afford it” crowd.
A more down-to-earth version of this phenomenon exists in the construction market. Some contractors get by never bidding on jobs but working with a select clientele willing to pay their asking price because of a reputation for superior work and reliability. If you find it difficult to win in the competitive bid marketplace, maybe it’s time to take a different approach than cutting corners in order to trim your asking price. Instead, stick to your guns and market yourself with a message that you charge more because you’re worth more.
Of course, if you have the guts to charge more than the going rate, you’d better be capable of outperforming everybody else. Refuse to work with competitive grade materials, only top-notch stuff. Include extended warranties and guarantees as part of your asking price. Think of any value-added services you can offer that most competitors can’t. Conduct yourself with professionalism always.
6. Show and tell.Seeing is believing. Document with photographs the difference between botched jobs and what you promise to provide. Show before and after photos of renovation projects in which you take pride. Showing is always more effective than telling, especially to non-technical customers, and it enhances your professionalism.
7. Create a splash with help-wanted ads.The Irish Plumber is the name of one of the Chicago area’s largest plumbing and HVAC service firms. Several years ago the company ran a series of TV and radio commercials advertising for HVAC service technicians. The script emphasized that the company offered top pay and benefits, but that they only hired the best and applicants must be able to pass a drug test.
The company not only generated a lot of job applications, they found these recruitment ads also generated service calls better than some of the commercials they ran dedicated to that purpose. People want to do business with top-notch companies, and price is often a secondary consideration.