30 May It Pays to be Value-Driven: 4 Ways to Attract the Business You Want
What kind of consumer are you? Are you loyal to the same places and brands because you appreciate their quality, or are you a compulsive bargain hunter? People fall on just about every point of the buyer spectrum, and it can be argued there is a place for everyone in the consumer marketplace. But in the world of the niche service provider, there is a clear winner: value.
If you’re used to working primarily with price shoppers in your landscape contracting business, the concept of the value-driven buyer might seem elusive to you. After all, the best way to make money is to sell a high volume of goods and services at attractively-discounted prices to a wide customer base – or is it? Research into the buying habits of consumers in service industries tells a different story. Retailer Nordstrom, for instance, continues to thrive in the shadow of online retail giants like Amazon and eBay because the company caters to an exclusive, clearly-defined customer base. Nordstrom’s customer-centric approach keeps quality-minded shoppers coming back time and again, because these buyers appreciate the value provided more than the price quoted. This allows the business to set higher margins and consistently realize healthy profits despite its pared-down books of business.
What does value look like in the independently-owned landscape contracting business? Lots of things, but first and foremost, it means the business is proud of the solutions it offers and not afraid to continually reaffirm the quality of those solutions. Here are five things to know to be a value-driven business.
Simon Sinek, author of the bestselling book Start with Why: How Great Leaders Inspire Everyone to Take Action, proposes the idea that there is a “golden circle” into which virtually all businesses fall. In the outer ring is the what – what is being offered to the customer? In the next ring is the how – how is it delivered, and how can it benefit the buyer? The one most often neglected, Sinek argues, is the middle of the circle, the why. Businesses that begin in the inner circle are by nature customer-centric and value-driven, as they truly believe in what they offer to the buyer. By beginning with and consistently focusing on your why, you can appeal to your buyers at an emotional level not often found in the consumer marketplace but is critical for forging lasting, profitable customer relationships.
Nordstrom is successful because they prioritize the customer. Because they are rarely the lowest-priced solution in the marketplace, it is worth marveling at the fact the business boasts loyal customer followings and has remarkable staying power in an industry that has been hard hit in recent years by online commerce. This is for a good reason: customers perceive they receive exceptional service, quality and unique value from these retailers, so they make shopping with them a regular practice. Customers of niche businesses are, by and large, more informed and willing to be educated on the benefits of purchasing specific offerings, and they are less inclined to consider price a primary factor in their decision to buy. These are precisely the types of customers who help businesses in exclusive corners of the market remain profitable in virtually all market conditions.
There’s a price for doing business, and if efforts aren’t made to backfill profits lost to marketing, procurement and other non-revenue-generating functions, small businesses risk insolvency. While the solutions you provide should be uncompromising in quality and value, there are ways to provide them without breaking the bank. Consistently having a clear picture of the costs associated with doing business ensures you can proactively identify ways to recoup those costs and preserve net profits while still offering the value your exclusive customer base demands. It also helps you to determine appropriate pricing and margins for your offerings.
In service-based industries, especially ones as saturated as the green industry, differentiation matters. Because value is intangible and difficult to succinctly define, efforts to promote and maintain it should stand out in the crowd and be readily recognizable to buyers. How you advertise, how you sell, and how you package and offer your solutions matters. Commoditized offerings can be bundled with more specialized ones, giving the customer the perception they are receiving an experience different from and exceptional to one they have ever had before. This perceived value is often all that it takes for a customer to remain with a business for the long term.
Is your business value-driven or price-driven? Take this quiz to find out.
- Do you know – and consistently begin with – the why of what you offer to your customers?
- Do you find yourself offering discounts and incentives to customers to make the sale?
- Do you have a book of business primarily comprised of customers you have served for years?
- Do you keep close tabs on costs and make accommodations to offset profits lost to non-revenue-generating functions?
- Do you feel your business clearly stands out in the consumer marketplace?
If you answered no to most of these questions, value may be the missing puzzle piece that can help you to realize the big-picture vision for your business. Visit www.landopt.com to find out how LandOpt can add value to your business and dollars to the bottom line.