How you sold me at triple price

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How you sold me at triple price

SunsetI’ve been in the market for an arborist – a tree professional that can take care of some dead wood and pruning in my yard on some very old trees. I’m far more capable when it comes to pruning databases than I am dogwoods, so I solicited bids from local arborists.

Three contractors came by the house and did their sales pitches. As with all things, I pay attention not just to the pitch content but how well trained the salesman is. Here’s what I got.

Contractor #1: Came by the house, presented me with a very direct, upfront list of what he’d do. Prune here, trim there, cut down some saplings – all very efficient. He presented his credentials, demonstrated a certificate of insurance, and gave me a price quote with no hassle: $697.

Contractor #2: Came by the house, apologized immediately and in advance for being a poor speaker and a poor salesman. Said he’s been working in landscaping for years, but just can’t speak well. He gave a brief overview of his services, what he’d do, and gave a $600 price quote which he said was firm no matter how much the scope of work changed. He made an additional point that no matter what other price we were quoted by competitors, he’d match or beat it.

Contractor #3: Came by the house and asked what we wanted, what we were trying to achieve. Asked whether we were looking for more sunlight, hazard reduction, etc. Noticed and pointed out some spots of rot on two of our trees that other contractors had missed and said that while there wouldn’t be a big impact for at least 10 years, eventually the rot would cause trouble down the road. Went into the front yard, which we griped about because the town’s trees on the sidewalk are never trimmed. Contractor mentioned that the law about trees is abundantly clear: if it hangs over your property, you have the right to trim or prune it without asking permission even if the trunk is on someone else’s property. He did a great upsell to his day rate, unlimited trees for $1900, and then explained how the trees would look in 1, 5, 10, and 30 years. He also said his insurance company would send us the coverage policy and paperwork with the written quote, which he’s not allowed to touch due to the possibility of fraudulent insurance.

If I were motivated solely by price, contractor #2 would have won easily. However, while price was definitely a factor, quality of work and expertise outweighed it. Contractor #3 won my business even at triple the price because he demonstrated expertise above and beyond just pruning trees – knowledge of the law and botany, expertise that indicates to me that he really knows what he’s doing.

Why is this so powerful that it justifies such a premium price tag? Unlike commodity widgets or generic chewing gum, trees and landscaping are very long term projects. There’s no undo with a chainsaw – once you do the work, it’s done. I was unwilling to leave my yard – which I value greatly – to the lowest bidder because, as in many things in life, you get what you pay for. I’m ready, willing, and able to pay for expertise if you can demonstrate your mastery before asking for the sale.

If your first instinct as a salesperson is to cut prices and focus only on the money, you will alienate the premium buyer who is willing to pay more in order to get more. Start with demonstrating service and expertise before the sale and you may make the sale without price ever becoming an objection.


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Comments

16 responses to “How you sold me at triple price”

  1. I agree with the premise, but I think you forget about crossing the chasm. Sure, 15% of the market will always buy your product or service, but most people are the Wal Mart demographic who buy the cheapest, fastest commodity without thinking about the future. If everyone sold like your contractor #3, Wal Mart would be bankrupt, and Nordstrom's would be the largest retailer in America.

    The real take away here is how can we identify which buying behavior we should target, and come up with different levels of engagement for each type of customer. A great example is Lexus vs. Toyota, same company, incredibly different strategies for engaging customers.

    Any ideas on how we can do this in the B2B world?

  2. Daniel, you have a good point about certain buyers never buying from contractor #3 but I think it's more important to note that by educating the customer contractor #3 broadens his customer base. Less customers buy solely on price once you bring in the notion of value.

  3. I agree with the premise, but I think you forget about crossing the chasm. Sure, 15% of the market will always buy your product or service, but most people are the Wal Mart demographic who buy the cheapest, fastest commodity without thinking about the future. If everyone sold like your contractor #3, Wal Mart would be bankrupt, and Nordstrom's would be the largest retailer in America.

    The real take away here is how can we identify which buying behavior we should target, and come up with different levels of engagement for each type of customer. A great example is Lexus vs. Toyota, same company, incredibly different strategies for engaging customers.

    Any ideas on how we can do this in the B2B world?

  4. Daniel, you have a good point about certain buyers never buying from contractor #3 but I think it's more important to note that by educating the customer contractor #3 broadens his customer base. Less customers buy solely on price once you bring in the notion of value.

  5. Isn't the online world odd, Chris? It seems as though there is no such thing as a commodity on the web. The value of experience can improve the effectiveness of every single deliverable, and ultimately the end result. Your example clearly demonstrates the extra value that should come with a higher price tag. Great thoughts!

  6. […] will your potential clients. Figure out what you know and what it is worth, and charge accordingly. Perhaps this post from Christopher Penn will help you get some pricing […]

  7. jkabbott Avatar
    jkabbott

    That's not triple the price. It's a different service. Your analogy is more akin to someone upselling on a 1500 advertising spot instead of a500 one. He didn't charge you triple what the others did; he simply upsold you on a more expensive, different product.

  8. Isn't the online world odd, Chris? It seems as though there is no such thing as a commodity on the web. The value of experience can improve the effectiveness of every single deliverable, and ultimately the end result. Your example clearly demonstrates the extra value that should come with a higher price tag. Great thoughts!

  9. Focus on customer needs and the sale comes easy.

  10. jkabbott Avatar
    jkabbott

    That's not triple the price. It's a different service. Your analogy is more akin to someone upselling on a 1500 advertising spot instead of a500 one. He didn't charge you triple what the others did; he simply upsold you on a more expensive, different product.

  11. Focus on customer needs and the sale comes easy.

  12. Great article.

  13. Great article.

  14. Great article.

  15. […] Penn (of the Marketing Over Coffee podcast) recounts his own personal experience of hiring an arborist and choosing the contractor who was charging 3x more than everyone else. It […]

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