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Thursday, January 08, 2009

Price, marketing, and sales (for those of us who hate selling)

Michael Stone in his most recent blog entry reiterates that the quickest way to business failure is to try to match the pricing of low ballers.

Low ballers have been in business since at least 1907 that I know of. My Grandfather and I used to talk about his early years as a carpenter. I remember him telling me about the owner of a company he worked for during that time and how the guy was always cussing the “Low Ballers”. So, this is something we just have to live with in this business. Remember, you can’t control them so don’t worry about them. It is a waste of your time and energy.
Stone rightfully advocates that you should market only to people who will pay your price, and suggests you learn how to sell more effectively. He also promotes his useful book, Profitable Sales, a Contractors' Guide.

I agree with Stone, mostly. Certainly you need to have some understanding of basic sales principals and approaches, and we are 100 per cent in agreement that you can't win the battle by lowering your price. Stone is also correct in that you must market to the right people and avoid the low ballers with some qualifying questions and controls.

However, I advocate that effective marketing using your natural talents, skills, and abilities can largely override your need to be great at selling, and that great selling, in itself, without underlying product and marketing skills, is also a road to disaster.

Here, personal experience in the school of hard business knocks has taught me the lessons about the limits of great selling ability. Great selling skills, without underlying marketing and product quality sensitivity, will take you places you probably don't want to go.

You know the types of business I am describing here -- the ones where door-to-door canvassers push junky or sometimes fraudulent services on unsuspecting clients; where boiler room phone teams exploit weaknesses, and where high pressure 'closers' don't let go until you are roped in to buy stuff. Some so-called sales gurus still advocate these hard-rock techniques, advocating a business style reflected by the 90s movie, Glengarry Glen Ross.

Most likely, if you successfully operated a contracting business during good times and are struggling now, you fit into an entirely different category. You are great at your craft or trade, you provide impeccable service, and clients really appreciate your work -- so much that, when things were good, you had a backlog of work, and absolutely satisfied clients.

Now things are hard, and clients are scarce, and the low-ballers are out there, and the leads services are providing crap, and you are struggling. What should you do?

You need to appreciate that your business brand is your greatest asset -- and your brand is your reputation and the trust people have in you. Your strategy should be to develop, maintain, and build on that brand through your marketing methodologies, to the point that clients continue to return to you for more work, and refer others.

The challenge is to avoid relying on referrals and repeat business -- but to systematize the process so you can generate enough repeat and referral leads through your marketing initiatives. You can achieve these results through organized marketing strategies far more effectively and sustainably, in my opinion, than with strong sales abilities (which, if you are like me, you may not have, or wish to use.)

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