The Power of the Obnoxious Offer

I often talk to my clients about the incredible power of the Obnoxious Offer. I named it in honor of one of my customers’ reactions to such a deal. When my 19-year-old self placed a $30,000 estimate in front of him, he freaked out. “Your pricing is obnoxious!" he screamed. "You're way too high!" And after he berated and lectured me for a good twenty minutes, he asked, “You can start on Tuesday, right?"

He was mad. He was wildly upset. But he was also unable to refuse my bid. So why did he choose me, his youngest option, for a major project? If he was so shocked by my pricing, why did he hire me without any negotiation?

I was just a kid back then, but my dad, always a good business coach, clued me in. That client's desire to hire me overruled his desire not to hire me. My offer was too good. My guarantee was too compelling. He wanted it, and he would pay accordingly.

The Obnoxious Offer Has Worked for Decades

That happened over thirty years ago. I’ve built and sold three multimillion-dollar businesses since. And the Obnoxious Offer has been a part of all the relationships I've created with my clients throughout my entrepreneurial career.

Here's the secret: a super-premium price must be linked to the corresponding value. You must add so much freakin' value that the higher price seems like a deal: it's irresistible.

Solving Pain Points Is Worth a Lot of Money

My first Obnoxious Offer worked because it solved multiple pain points. Back then, I started a commercial landscaping business. I got my early jobs simply by showing up. I returned calls promptly and always kept appointments. It’s not rocket science, but it worked. Reliability was a big pain point in that industry, and I was able to solve it.

But I knew I could also solve other pain points. For example, my competitors didn't start or finish on time, which was a logistical nightmare for commercial clients. My competition often told customers one price and charged more on the invoice without notice. They tended to use inexperienced workers and didn’t guarantee their work.

If just showing up usually got me the job, how much more could I make if I offered on-time starts, on-time finishes, no unexpected costs, and a one-year guarantee?

Standard and Guarantee Packages

I wasn't sure how much I could charge, so to be safe, I created “The Standard” and “The Guarantee” options. “The Standard” was parity pricing for the old way of doing business. “The Guarantee” increased prices by 35 percent but also promised reliability (we started the job on time no matter what–rain, shine, earthquake, whatever). We finished on or before the date we agreed upon. Not one day later.

"The Guarantee" package also stated that the price stood unless the customer made changes. Even when my material costs went over, the client didn't pay. If we had unexpected challenges, I absorbed the cost.

And we guaranteed our work for one year. Back then, I was the senior project manager on every site, so I knew we were doing it right. I returned one year after our finish date to inspect the job and replace stressed or damaged plants, even if they died of neglect.

"The Guarantee" became the most popular option. And although it didn't win out every time, it did win often enough to turn my business into a million-dollar enterprise.

The Guarantee Also Contained a Hidden Benefit

Listen, the secret is that I did business pretty much the same way, whether they chose "The Standard" or "The Guarantee." I always built schedules with a little wiggle room so we could start and stop on time. A senior project manager was always on site, even if I wasn't there. Of course, the one-year guarantee was a stretch, but we hardly ever had issues, and a one-year follow-up appointment contained a hidden benefit: it was also a pre-scheduled chance to solicit more business.

How Can Obnoxious Offers Help You Increase Margins?

Start by thinking about the things that are wrong with your industry–from your customer's perspective. What do they complain about? How could you change your business model to eliminate those complaints? What kind of guarantee could you offer that would solve so many problems that customers would line up for your services?

Next, think about what you could do to meet those needs. Sunday hours? Better guarantee on parts??More user-friendly return policy? Do the things your competitors are too lazy or disorganized to do, and you're well on your way to creating your own Obnoxious Offer.

Still Not Sure How to Create Your Own Offer?

The professional coaches at 7 Stage Advisors are skilled at helping clients create Obnoxious Offers that transform their businesses. If you want to talk more about your company's goals and needs,?contact us ?to find out if our coaches can help you take your business to the next level.