02 Mar 5 Actions That Help Neutralize Price Concerns
LandOpt CEO Tim Smith tells how LandOpt contractors have been able to avoid lowering prices on maintenance services over the past few years.
LandOpt contractors have not had to succumb to market pressures and drop their maintenance prices over the past three years, according to LandOpt president and CEO Tim Smith. That’s because the contractors have strategically taken five actions that help neutralize client concerns over price.
1. Find the right customers
First of all, seek to acquire clients that actually value landscaping, as opposed to those who simply view it as a necessary service. These include commercial clients to whom a well-maintained property is mission critical to business success, along with residential customers who still place a high degree of value on their property’s appearance. Then, by selling on “outputs” (value and emotion) as opposed to “inputs” (services and rates), you will remove the need to compete for business solely on price.
2. Switch to a proactive sales approach
Generally speaking, landscape contractors have grown accustomed to a sales process that starts with inbound lead generation. In other words: Their phone rings, and then they respond with a price-driven proposal. LandOpt contractors take a different approach. They seek out their ideal clientele with a proactive sales and marketing approach. This has allowed them to acquire clients who value landscaping. They then discuss clients needs and desires, and tailor services to those needs and desires. Again, this neutralizes concerns over price.
3. Learn your costs
Create a detailed financial plan every year. Thus, you will know with a high degree of certainty what your costs for the coming year will be. This allows understanding in exactly what you need to charge in order maintain profit standards. If you don’t know your costs, you’ll never know if you should raise, lower or simply maintain your current prices.
4. Nurture customer relationships
On that note, implement planned price increases. But it’s rarely a contentious discussion with a client. On longer-term maintenance contracts, price increases are always discussed as part of the sales process. It’s up to the account manager to communicate this. It’s also up to the account manager to establish a relationship with the client through regularly scheduled visits. This action alone creates an open dialogue that is essential today.
5. Tailor to the situation
Sometimes a client’s budget simply cannot withstand a price increase. Do not respond by simply dropping their price. Rather, change the scope of work on that account. The regularly scheduled client visits are critical here, as contractor and client can discuss an alternative plan together. Because jobs are not sold on “inputs”, changing the scope of work is possible. The account manager and client can decide together how services will be delivered in order to achieve the desired result.