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Apples and oranges
1 Oct, 2009 By: Marty Whitford Landscape ManagementHighest value versus lowest price? There’s no comparison. Even in a recession, superior value wins the long-term customers almost every time.
Competing primarily on price is the equivalent of sentencing your business to death, especially amidst the country's "Great Recession."
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If you want to survive and thrive, you must compete on — and clearly demonstrate and deliver — superior value. That's the gospel according to Bill Hoopes, a 30-year industry veteran and founder of Delaware, OH-based Grass Roots Training.
"If you use price to gain customers, be prepared to lose them the same way," Hoopes says. "Someone else will come along before too long, and that customer will go away just like that."
Hoopes, who has served as director of training for Barefoot Grass and Scotts Lawn Service, played the dual roles of professor and preacher Sept. 17, when Landscape Management hosted its first LM Contractor Business School Webinar. Sponsored by DuPont Professional Products and archived at www.landscapemanagement.net, the Webinar, "Selling in a recession: Why service matters even more," drew more than 150 Green Industry professionals.
"If you don't differentiate your company based on the superior value you deliver, what do have to offer?" Hoopes says. "Naturally, you default to competing on price — and we all lose out, even our customers, because service usually suffers."
During the Webinar, Hoopes explained how contractors can compete against low-ballers, and win most times, without competing solely (or even primarily) on price.
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"It's all about communicating and delivering superior value," he says. (Editor's Note: For more of Hoopes' insights on sales and marketing, see page 68.)
Value 101
Recognizing sales and service are two sides of the same coin is the first step to communicating and delivering value.
"Most in the Green Industry are very strong technically, but many haven't spent enough time developing and honing their interpersonal communication skills," Hoopes says. "Studies show communicating value to customers and prospects is 85% about interpersonal communication skills and just 15% about demonstrating technical know-how. We have to do a much better job communicating to prospects the near- and long-term value of saying 'yes' to our proposals, as well as the many costs of saying 'no.'"
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Hoopes says every prospect asks themselves one question throughout a sales pitch: What's in it for me? The path to closing more-profitable new business includes:
1 Listen and observe. Identify the underlying benefits the prospect wants and for which he'll pay.
2 Talk the walk. Demonstrate how your business is uniquely positioned and proven to deliver those very benefits and many others.
3 Hero maker. Make the buyer look smart. Emphasize how studies have proven professional landscape and lawn care services often increase property values 10% or more.
4 Fear factor. Make switching from another company or from self service risk-free.
5 Easy does it. Communicate your simple plan that's chock full of value.
Another sales fundamental is to only set realistic expectations. Some sales folks will say and promise almost anything to close a deal, but that approach only results in lower customer satisfaction scores and higher cancellations, Hoopes says.
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