Now and again I'll get into a conversation about 'educating the client', especially when a contractor talks about losing jobs to competition that's 'undercutting' them. One such conversation happened last week when a builder mentioned constantly losing jobs to, shall we say, less than reputable competition.
Typically in this situation I'll talk about educating the prospect, to which the response is usually, "I don't have time to teach the prospect everything I know." (This is usually closely followed by, "Plus, I already educate my prospects.")
First, I agree. Second, you don't have to. Third, you can't afford not to.
Educating Your Prospects
When I discuss educating prospects, I'm not suggesting you have to provide years of knowledge, personal experience, and recent modern changes in the home building industry. First, you don't have that kind of time. Second, chances are the average home owner just doesn't care.
What I do mean is to educate the prospect so:
a) they understand what your price represents; and
b) they know what to look for, and look out for, so they can properly compare your quality of work to others.
A Recent Example
A friend recently bought a house and, as par for the course, was contacted by a handful of companies promising to deliver natural gas at lower, locked-in rates.
Now, I can't claim to verify the following information, it's just what he received when he asked his group of friends for advice. And it does illustrate the point.
According to one response, the rate quoted by some of these companies is lower because it doesn't include all the costs associated with delivering natural gas to his house.
That is, the rate they were quoting was the 'supply' charge. They would then compared this rate to their competition's rate, even though the rate they compared it to combined three different charges and, therefore, was always going to be more then theirs.
This would be like selling you a computer, and saying mine was $750 while comparing it against a competitor's $950 model -- but failing to mention the competitor's included a monitor and the other didn't. Not fair, right?
So, How Do You Use This Information to Stop Fighting on Price?
This is what I mean by 'educating the client'. Let them know what they're getting with your price vs. a potential competitors and help ensure they can, and are, comparing apples to apples.
Do you have to list all 1,001 differences that go into building or renovating a home? Of course not...in fact, if you capture the 10 - 15 biggies (and, sometimes, even less than that), most clients will assume the rest is taken care of (and it usually is).
And This is Where Selling on Features vs. Selling on Benefits Comes In...
Features vs. Benefits is one of the easiest ways to separate you from your competition and stop fighting on price. Unfortunately, most builders and renovators sell on features and, therefore, end up in 'price comparison hell.' Selling on benefits quickly eliminates competition from consideration, especially 'unprofessionals' (since they make it so easy for us to eliminate them, if everything is positioned properly).
Remember above, when I said chances are home owners don't care? What they (and 99% of all humans purchasing something) don't care about is the process. What they do care about is the results.
Do you care how a phone works...or do you care if your business phone went dead for even one hour? Do you care how HTTP Internet protocol works...or do you care if your website went down for even one day?
See...it's not the process most people care about (although some may be curious about it after the fact) -- it's the result!
So, don't tell your prospects you use "the finest quality building materials" (and who isn't going to say that to get the business) or "the best workers" (and, again, who doesn't say that) -- tell them what matters...the results. For example:
. we build our rooms perfectly square (feature) so your furniture doesn't look wonky, or your built-in pieces will actually fit properly without additional, and expensive, work (benefit)
. we prime both sides of natural siding (feature) so it lasts longer (benefit) than builders that don't (extra points: mention how much longer)
. we allow wood flooring to acclimatize before installation (feature), to eliminate gaps, splitting and checking (benefit)...other builders / renovators that don't do this risk your floor being unsightly and uneven withing 6 to 12 months!
Your Advantage? Effectively Eliminate a Large Portion of Your Competition!
As mentioned above...if you list a number of areas where you add quality and value to your prospects, and you do it by focusing on the end-result -- the benefits, not the features, you'll rocket above your competition in two ways:
1) the lower-quality, 'price-fighting' competition can't fight you on price now, since you've exposed what the client will miss if they go for the cheaper price; and
2) if your other competition isn't doing this, guess who comes out on top? Even among other professional builders / renovators, if they're selling on features and you're selling on benefits, you'll close the lion's share of the work!
Will people still go for the lower-priced builder? Yes. There will always be someone who'd rather get it cheap rather than get it good. But...if you effectively educate your client -- show them the benefits of your extra quality, extra value and (yes) extra price, you'll be happy to let the price-shoppers go (and the headaches that usually come with them), and keep the quality-buyers.
Brett Martinson is a professional coach and consultant to the home building and renovation industry. Builders and renovators can sign up for a FREE subscription to his Successful Home Builders' Newsletter AND receive his free, bonus 5-Part eBook, "5 Profit-Draining Mistakes Builders and Renovators Make...and How to Fix Them" at http://www.SuccessfulHomeBuilders.com