What's so Special and Different about You then?
The third of The Ten Reasons You're Not Making Enough Money in Your Business
Reason 3:
You're Competing on Price
If your point of difference is that you do Great work with
Great service for a Great price
(or some variance of those three), you have no point
of difference, you're just like everyone else out there.
This is the third episode in my weekly series called : The Ten Reasons You're not Making Enough Money in Your Business"
Here is the introduction to the series with an outline and the structure of the ten weeks.
You're not, are you? You're not really competing on price in your business, surely!
Oh I see you' believe you're the owner of Ikea, or Aldi... Yes, of course, in that case you do compete on price, kind of.
So how's that working for you?
Not so well... is it?
Competing on price is a dog's game.
But you knew that, didn't you? You've always known that you didn't want to compete on price, and yet... here you are, forever trying to win business by lowering your prices and discounting and being defensive when you're not the cheapest.
So why is that? Why do so many small business owners know they don't want to compete on price and yet that's what they do anyway?
Doing the networking thing
I was at a networking event the other day, and I asked a fellow attendee (a web developer), as I often do when meeting new people: "What's special about your business? I know a lot of web developers and I would like to understand what makes you different to the others, because that way I can help you and refer the right clients to you over time.
And the web developer proceeded to tell me this:
"We have over 75 years of combined experience in the office and so we do really great work, and we've worked for lots of cool brands and we're small so we can give highly personalised attention to our clients and we care about our clients because we're small and also we work with outsourced subcontractors when we need and so we keep our overheads down and hence we don't charge as much as the larger agencies."
Ok, said I, fair enough, so to summarise, what makes you special and different is that you guys deliver:
- Great Work
- Great Service
- For a Great Price
Is that right?
Yes, said the webdeveloper, that's right.
Ok, said I again, that's easy then, next time a client needs a webdeveloper who won't do average work with average service for an average price, I'll know just who to send them to, right?
Needless to say, my new favorite webdeveloper didn't like me much at that point and went in search of the bar.
Just like everyone else
If your point of difference is that you do great work with great service for a great price (or some variance of those three), you have no point of difference, you're just like everyone else out there.
I have not yet ever come across a business owner who told me they delivered an average product with average service for an average price. And no potential client you may talk to is ever looking to buy a product or service that is average all round.
What's more, if they're talking to you, it means they already believe you deliver great product, service and price and they believe exactly that about the three competitors of yours they are also talking to.
But they can't check the first and second qualities very easily so they end up making their decision on the only thing they can check easily, price.
And the reason competing on price is such a dog's game is that there's always someone who'll do it cheaper. It's no way to build a Beautiful Business and Life.
If you want to stop competing on price, you've got to give your clients something else, you've got to differentiate yourself clearly and easily.
Moving to Tasmania
I recently asked two removalists to give me a quote to take all our stuff from the house we're in now to our new house in Tasmania. One of them I'd known for a long time, and even consider a mate, and the other came recommended from a friend. Both of them gave me a quote and my mate was about 25% more expensive than the other guy. I went looking long and hard for a reason the spend the extra money. I really would have preferred to use my mate, but he just didn't give me anything to run with. I simply had no grounds to make a decision on anything other than price.
There are many small things he could have done to make it easier for me to decide to go with him: He could have offered me free insurance, free boxes and wrapping paper. He could have come round and talked me through the best way of packing things and all that stuff. That kind of thing might have made some difference (although probably not enough). But the big thing he didn't do, was communicate to me Why I'd want to move our stuff with him. Why with a capital "W".
The Big Question of Small Business:
What is your business on this earth for and why would anybody care about that?
I talked about the Big Question in last week's episode as well. Here are a couple of examples of how some other businesses (past clients of mine) have answered the question:
A building company: Direct Building Solutions:
A webdevelopment company: RedesignIT:
We Make it Easy to Do Business Online (more here)
And finally, I remember some years ago I came across a removalist in the UK and their website had in big letters on the homepage:
We Make Moving Fun
That was the company's Mission, their Purpose, their Why. Now if my mate had been able to communicate his absolute commitment to a Mission such as that. If with his quote he'd send me a document or video with a bunch of instructions and "DO's and Don'ts" for how to Make Moving Fun, right from the getgo. That would quite possibly have made a significant difference for me and my wife. Moving to Tasmania is a stressful adventure and if we felt we were going to have a bunch of guys beside us committed to make the process as stress free as possible, Fun even, we might well have been prepared to pay extra for that.
Your customers don't want to go with the cheapest necessarily, but you've got to make it easy for them. And if you sound just like your competition, you're not making it easy at all.
More about the Big Question of Small Business in last week's episode here.
Next Steps:
In last week's episode, I already asked you to focus on the Big Question of Small Business. This week I'd like you to take it one step further:
First:
Imagine we met for a coffee and I said I wanted to help you refer some clients to you, but in order to do so I want you to make it easy for me to have a conversation about you with those clients: What do I tell them about you that means you'll stand out from the crowd?
Second:
What can you do in your engagement process to convince your potential clients that you "Walk the Talk" of your Why?
Next week's episode:
You're always running late