you will always find yourselves competing with others . It ’ s a vicious circle - you will always be competing with others on price and you will never be able to get off the treadmill . |
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You won ’ t enjoy dealing with the most picky customers
I wonder how much you enjoy dealing with customers that want to talk about nothing but the cost ? Most businesses , putting this in acceptable language , don ’ t find them the easiest people to do business with . When they are keen on a “ deal ” they also tend to be the most unreasonable and expect extra work for nothing . They also have a tendency to be the most picky about every aspect . These types know the price of everything but the value of nothing . They often pay late or dispute payment too . Why not let your competitors have them ?
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‘ good quality cannot always initially be seen . Best price isn ’ t the same as best value .
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Quality
The first and best antidote to competing on price is competing on quality . But you must deliver as well as talk about it .
Matthew Stevenson , whose business Bespoke Outdoor Spaces is growing fast says “ If you are to win contracts when you are not the cheapest quote , you need to explain why . If they get three quotes they aren ’ t likely to all be for the same job in terms of the quality of materials and workmanship . Often , if low cost work is carried out , it may look fine to start with , but deteriorate quickly , as good quality cannot always initially be seen . Best price isn ’ t the same as best value .”
Guy Hodgson , former Screwfix tradesman of the year for the West Midlands , suggests “ The way to win business is to go in person to see the client . Listen hard and try to contribute useful suggestions . If you don ’ t know something , say so . Then later do research and call them back . Get your quotation or estimate to them quickly .” His approach is to impress with expertise , not price , and like Stevenson he has a thriving business .
As Hodgson says , a tip is to be very fast at producing a quotation when one is requested . Many tradesmen are slow to respond and homeowners can get very frustrated waiting .
To reinforce this point about quality , whenever you are discussing jobs with clients , make sure that you demonstrate expertise without irritating them by being a know-it-all .
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Service
Another approach is to provide a level of service that competitors don ’ t match . One electrical contractor I know always responds to emergency call outs within one hour , no matter how trivial and whatever time of day they come in . This builds trust and often leads to follow on work where price is not the prime consideration .
The person with this approach , Mark Goodchild of Electric-call . net , puts it this way : “ Don ’ t try to compete on price as you can ’ t do that at the same time as providing a great service .”
Speed
Maybe you could experiment with saying that if a decision is given by a certain date , you can start on the following week , but that commitment ends if they don ’ t make a decision in time . That way you can use the slowness of competitors to provide your competitive advantage .
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Of course , your bid does need to be reasonable as well .
Avoid competition
Some of the tradesmen that we have interviewed simply don ’ t quote when they are in competition with others – the cost of preparing failed quotes is too high and they don ’ t wish to compete on price . They work hard to generate enough leads so they can afford to just quote for the ones where there isn ’ t any competition .
Sensible pricing
If you are good at estimating the real effort to do jobs , fixed price quotes can be the most lucrative . If not and you simply charge by the hour , make sure that your rate reflects an uplift from what you would get as an employee . And this must take into account holidays , some sickness and the cost of your van , tools , insurance and so on .
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Be firm
Competing on price is the quickest way to lose money and probably after poor workmanship is the biggest reason for trade businesses failing . No one is suggesting that rip-off pricing will work but fair pricing that provides for a good job and a decent profit should always be your aim .
Sometimes it ’ s hard to wean yourself off low prices and it can take persistence and a lot of confidence . But once you succeed , you will never look back .
Benjamin Dyer is the CEO of Powered Now . Powered Now aims to take the pain out of admin and paperwork for installers , electricians as well as other trades .
www . powerednow . com
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