Sell premium from start to finish

Discussion in 'Business Operations' started by yard_smart, Jul 8, 2008.

  1. yard_smart

    yard_smart LawnSite Senior Member
    Posts: 590

    You Cannot Discount Quality

    Some businesses charge low prices and use less expensive products. Others charge a premium for services and use high-end products. How do you survive during slow times when you perform quality work and charge a "pretty penny" for it?

    When people have money to burn, getting clients is not difficult. At times like this, you have to think about how you and your sales team bring in new contracts. You not only have to bring a valuable service and end-product to the table, you have to start presenting your value immediately.

    In your first conversation, explain your services are not cheap. Qualify them instantly by admitting you cost more than your competitors. You might lose people at first but you'll keep many by following up with the details that you use the best products, have the best technicians in town, and use the finest products known to man. In other words, you don't cut corners.

    Next, let them know the competition is not only less expensive, they are cheaper. There is a difference. Follow with the fact your competitors work with anyone but your company only works with a handful of selected clients. That you provide warranties and guarantees. That you offer superior customer service from start to finish. In other words, the competitors cut corners.

    Finally, seal the deal by never offering any coupons and discounts. How will the potential client know this? One, they've never seen a coupon from you and, two, you tell them. Remind them you cannot discount quality. That your business takes longer on the job than most because you put in more time and energy on every project. That your company stand behind every job you perform.

    You will lose business because not everyone can afford you. But you will get more of the business you want because some want the best and are willing to pay for it.

    Scenario 1:
    Year 1 - You spend $12,000 on marketing and that nets you 500 leads. You spend an average of 45minutes with each one selling (drive included) and value yourself at $100/hr. You try to be "fair" with your price (avg $250 ticket) and close 80% of your bids. You have made $100,000 gross and it cost your business $49,500 to acquire them (less vehicle). Net gain: $50,500

    Year 2 - 50% of your customers call back. You make $50,000 gross and it cost your business $0 to acquire them.
    Year 3 - The other 50% of your customers call back. You make $50,000 gross and it cost your business $0 to acquire them.

    Net cost of year 1-3 = $49,500 Net gain from year 1-3 = $150,500

    Scenario 2: Year 1 - You spend $12,000 on marketing and that nets you 500 leads. You spend an average of 75 minutes with each one selling (drive included) and value yourself at $100/hr. You sell only premium work (avg $450 ticket) and close 50% of your bids. You have made $112,500 gross and it cost your business $74,500 to acquire them (less vehicle) Net gain: $38,000

    Year 2 - 50% of your customers call back. You make $62,500 gross and it cost your business $0 to acquire them.
    Year 3 - The other 50% of your customers call back. You make $62,500 gross and it cost your business $0 to acquire them.

    Net cost of year 1-3 = $74,500 Net gain from year 1-3 = $163,500

    Ok, so you're thinking $13,500 over 3 years, who gives a crap?!? You do. In our experiment, there are two very subtle differences. First, I didn't include marketing after year 1. That would have made the spread more like 50k. But most importantly, the contractor 2 is working 250 jobs per year vs contractor 1 who is working 375. That's a 50% increase in labor!! So for an higher initial investment, contractor is working almost half as hard.

    The moral: You get what you pay for. In services and in customers...
     
  2. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    When I started, I was doing everything, and I mean CRAP Jobs, after I got established,
    I was turning down jobs, be being a perfectionest, <---spelling ,

    I moved the company in a NEW direction, Only taking on high end customers, I have been told several times I'm too expensive, and yes we are, this is one of my statements,
    " were NOT for everyone" I am and have been, turning down work that I would have loved to get when 1st starting.

    It seems that maybe my timing was right, because word of mouth took off like wildfire, and to be honest, I was simply doing what I said I would do, showing up when I say I will, and doing a GOOD JOB, I dont have expertise in making bushes look line farm anamials or anything like that,
    I have NOT experanced a slow down. However I do spend a lot of time on the phone simply because people are wanting to know, How do you make the turff look so good.

    I have no magic wand, I simply mow when suppose to, fert when needed, trim hedges, and people are going crazy,,,,,
    NOW GRANTED I EXPEXT things to be perfect. I have and still do, bend down and look across the turff and If I see one blade of grass sticking up, I want to know Why this is, and I inform my employees that they too MUST Do this,

    again. Were NOT for everyone, nor do we Service Just anyone, We have a Form that MUST be filled out, with items like do you own, or Rent....

    I WILL NOT TAKE ON A CUSTOMER WHO RENTS......

    Good luck
     
  3. yard_smart

    yard_smart LawnSite Senior Member
    Posts: 590

    Exactly . . . .Just last year i was taking any thing and every thing but I have totally changed this around . . . I did some work for a teacher last year and it came out to like 12 bucks an hour lol a different teacher called this year and said hey i need some dog stakes pulled out behind my house do it and ill give you like 40 bucks i was like haha no can do mr. xxxx ill do it but our hourly rate is 60 and its gonna take at least two hours (they had to be dug out) She said well your alot higher than you were last year. . .i said well mam i have a 2k landscaping job to do this week and a 1600 one to do next week i honestly don't have time for it but i was going to squeeze you in because i like doing wokr for my old school teachers. . . She said oh wow i didn't know you had taken off like that okay i uinderstand i get a kid from class to do it! lol I said okay thanks for calling



    I love being able to do that because now i know im making what i DESERVE to make!!
     

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