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View Full Version : Price vs Value - Do You Know The Difference?


Steve
10-01-2007, 12:49 PM
This is a small part of a post Chestin made on his blog. Please check out his site for the full article.

Price vs Value - Do You Know The Difference? (http://lawncaremarketingmagic.com/wordpress/203/price-vs-value-do-you-know-the-difference/) - In many cases, especially the green industry, businesses try to compete on price alone. They think the only thing the customerís worried about is the amount of the invoice youíre going to send. As a result, theyíre willing to undercut their prices simply to try and land new customers.

Well, Iím here to tell you that thatís a HORRIBLE way to run your business and itís not always necessary. If you do happen to have customers that are only worried about price, then I suggest you start looking for more customers that arenít.

You see, instead of competing just on PRICE, you should position yourself to compete on VALUE. That way, you can provide basically the same services, but not have to worry yourself to sleep at night thinking your customer will vanish the next time some low ball scrub comes knocking on their door.

One of the things I think about, is it possible for a new lawn care business owner to compete on value? I guess theoretically it is possible but I think it is very difficult to just start out and position yourself as having more 'value' than another start up.

I think this is why most new lawn care businesses, just start out, compete on price. Price is an easy concept to understand. If a competitor charges $x then I will charge ($x - $1).

Ultimately though I think the way to go is to create a brand that appears to have more value to it, which would therefore allow you to charge more.

Another thing is when you are just starting out, your work may not be at the level other more experienced businesses are able to achieve. So that could hold you back from positioning yourself as more valuable than a competitor.

But Chestin I think totally nails it when he says you need to go the extra mile in assisting your customers and that will really help you stand out as providing more value.

What's your view on this?

StartALawnCareBusiness
10-02-2007, 01:29 AM
Quote[/b] ]What's your view on this?

My view is that Chestin is one smart dude.

http://www.gophergraphics.com/forum/iB_html/non-cgi/emoticons/cool.gif

Steve
10-02-2007, 10:19 AM
Yes he is!

It's kind of interesting how the business cycle goes.

Step 1. You start your business and try to cater to everyone's needs.

Step 2. You get drained and you start pulling back a bit.

Step 3. You aren't around to help as much as you used to.

Step 4. A new lawn care business steps in and starts at step 1. They are then to potentially offer a better value and they get the work.

LawncareMarketingMagic
10-02-2007, 02:09 PM
Quote[/b] ]One of the things I think about, is it possible for a new lawn care business owner to compete on value? I guess theoretically it is possible but I think it is very difficult to just start out and position yourself as having more 'value' than another start up.

The answer is without a doubt, 'YES', it's definitely possible for a new LCO to compete on value. In fact, just starting out is the very time to do so.

Why? First off, because you don't really have processes in place and you could easily implement them right from the start. Once you have a routine established it's much more difficult to make changes.

Second, because you want to get quality, loyal customers right from the start and if you start off your business competing on value instead of price, you'll build a much more stable business than if you were simply competing on price.

So, how can a new guy just starting out compete on price? Well, the easy answer is to go the extra mile and do the things the average LCO isn't willing to do. Of course that's the 10,000 foot answer so I'll try to bring it down a little.

Offer service that others aren't willing to offer. Things such as a 'lawn/landscape diagnostic report' after each service visit. Much like the print out you get from JiffyLube or any other express oil change service, it's a simple page that lists all the services performed, offer suggestions for improving the lawn/landscape, and mentions the tentative date for the next service. That's one idea.

Another one would be to simply do the little things some LCO's don't do such as blowing all the grass off the hard areas (I know, I know, but most low-ballers don't do this), adding a pattern to the lawn, making sure the lawn is completely emaculate before leaving (no garbage, debris, etc.), or something as simple as showing up when you say you will.

Something else you could offer would be a personal follow-up visit to make sure everything's as they anticipated. I know many LCO's are afraid to interact too much with their customers but that's one of the best things you could do. Stopping by once a month or even simply calling them on the phone to find out how things are going will go a long way towards building a lasting relationship with your clients, plus, it gives you another opportunity to upsell them additional services.

So, is it possible for new guys to compete on value? Absolutely! Does it take a little extra effort? You bet. But, it's effort that will more than pay off down the road.

Steve
10-02-2007, 03:08 PM
I certainly hope everyone is reading this otherwise they are missing out on key elements of success.

Also, just consider what Chestin could do for your business if you contacted him for further 1-on-1 business assistance.