Get Back JoJo…

Imagine yourself walking down a busy New York City street in mid-July, minding your own business.  Suddenly you run into a rather large crowd gathered in front of a theatre.  Curious, you hang out to see what the fuss is all about.

Then, out walks a legend.

For a rocker in his late 60’s, Sir Paul can still bring it!

And we’re still “bringing it” with our 35-question quiz on Price, Value and Hydronics (click here to review).  Last time we focused an entire post on one very important question.  This time, we’ll pick off several:

17. I don’t need to advertise – word of mouth is good enough.  FALSE

We hope it’s true.  We like to think it’s true.  But it isn’t.  There’s no doubt that word of mouth is the best type of referral there is, but it has limits. It’s like making a copy of a copy of a copy – eventually it runs out.

Your customer has friends, and you hope they’ll tell their friends about you.  That works well if their friends have an immediate need for your services.  If not, the referral doesn’t mean much and dies on the vine. You need to infuse your customer base with new circles of people in order to reach new potential customers via word of mouth.  ”Word of mouth” doesn’t just happen – you have to work it.

One more thing – I’ve found over the years that many folks claiming to rely on “word of mouth” have no idea where their work comes from, have no idea how to promote their businesses, rely on “hope” as a marketing strategy and chalk it all up to “word of mouth.” It’s an easy phrase to say, and there’s self-satisfaction in believing your customers rave so much about you that everyone they know lines up to buy you.

Kinda optimistic, don’t you think?

18. People always worry about paying too much. TRUE…

…to a point, that is. I’m not saying people don’t care at all about price, because they do.  But as mentioned in our last blog post, there are four other considerations at least as important as price, if not more important (click here to review).

Pop quiz: would you pay $75.00 for a ¾ × ½” copper tee?  Certainly not, right?  But what if you were one tee short and needed it to finish a job?  Nearest supply house is a 45 minutes away, but there’s a hardware store 15 minutes away.  You drive there, buy it for $5.00 and then drive back.  That 35-minute jaunt, depending on what you charge for your time, makes it an expensive copper tee, doesn’t it?  The point is that when you need it, you need it.  You didn’t like the fact it cost you $75.00, but the alternatives would have cost you a lost more.

19. People never worry about paying too little.  FALSE

Everyone loves a bargain, right?  Well, my friend, have I got a deal for you!

I have a special arrangement with an overseas manufacturer of modulating-condensing boilers.  These are high efficiency wall mounted boilers – never mind the brand name – that I can let you have for $100.00 each if you buy 10 of them.  Whaddya say?

Ten boilers for a grand?  Where do I sign up?

You know the old saying, “if it sounds too good to be true…”

The question you’re probably asking, right after “are they hot?” would no doubt be “what the hell kind of boiler sells for a hundred bucks? It can’t be any good!”

Or looking at it another way, if you needed a vasectomy, would you hire the chronic low-bidder?

People do worry about spending too much, but they worry more about spending too little.  No one wants to buy junky stuff.  Folks usually don’t have a frame of reference to know what’s good and what isn’t, so price usually sets the bar for them.  Folks will assume if you’re higher priced than all your competitors, you’re probably “better.”  They may also conclude that a lower priced competitor is “good enough.”

Your job – show the customer that hiring the “better” you is better for them than hiring the lower-priced “good enough” guy and having the extra cash in hand.

That’s what you call “selling!”

20. Most unhappy customers will let you know about it.  False

Word of mouth is a double-edged sword – it cuts both ways.  Unfortunately, the negative blade is way sharper than the positive blade. If a customer is thrilled with the new boiler you installed, they may tell 5 people. If a customer is less than thrilled they’ll tell 10 people.  And if they’re downright angry, they’ll tell everybody!  And in the world of Facebook, Twitter and Blogging, that can turn into a mushroom cloud over your business in a hurry.

And what’s worse, you may never know that customer was unhappy. Statistically speaking, you’ll hear from only about 4% of your unhappy customers.  And of those who don’t bother to complain, one out of every four will have a serious issue.

Yikes.

21. Customers hammer you on price because they can’t afford the price you’ve quoted.  FALSE

 

Folks don’t hammer because they can’t afford something. They hammer because they think it’ll get them a better deal.  Let’s say you are the highest of three bidders for a boiler job.  You’re at $9,200, the second bidder is at $8,500 and the low-ball clown is at $7,900.00.  You’ll no doubt hear something along these lines:

“Unless you get your price in line, we can’t do business.”

“You’re price is way out of line, pal.  I have two other bids a lot lower than yours!”

“Are you out of your mind?  No way I’m going to pay that price!”

“You want my business you better sharpen your pencil, pal.”

You’ve probably heard something similar at some point in your career.  Are they telling you they can’t afford it?  No.  But there’s another question you have to ask:

Are they telling you they’re not going to hire you?  Again, the answer is no.

What they are doing is threatening you.  Unless you lower your price, you’re not going to get the job.  But now you have to ask yourself one more question:

Why are they bothering to threaten you?  If it really was all about price, wouldn’t they just hire the cheap guy and be done with it?  Wouldn’t it make more sense to simply say “goodbye to you,” and go with the lower bid?  Why are they spending their time and energy to get you to lower your price, when they already have two lower bids in hand?

Interesting question, don’t you think?  I’d love your feedback on why you think that is.

And here’s another interesting question: how does a 67 year old man rock out on a classic and sound just like he did in 1965 (except for the occasional high note)?  I don’t know the answer to that one, either…

http://youtu.be/dHIlvGAP1lQ

Rock on, Paul!

 

One Response to “Get Back JoJo…”

  1. I agree with number 21 even though I had forgotten this incident until I read your answer. I was over $1000 high on a job years ago. When the homeowner called back he said that I must be going to do a much better job than the others so he wanted to hire me.
    That was one of the most enjoyable jobs I ever did.
    Thanks, John for jogging my memory.

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