The First Five!

There’s a scene in the movie “School of Rock” in which Jack Black teaches the class how to write a perfectly decent rock song.  The tune was simple, and the words had a pretty straightforward (albiet angry) message.  And it was catchy.

I like songs like that.  Especially the catchy part.  Cleveland’s The Raspberries were one of the kings of mid-70′s simple, straightforward and catchy (but not angry), and this week we’re featuring one of their simplest, straightforwardest and catchiest (but not angriest) hits, from 1972…

The Raspberries had a nice run from ’72 to ’75 making some some simple, straightforward and catchy music.  Sometimes that’s enough…

And speaking of enough – 35 True/False questions on what it takes to be successful selling plumbing, heating and cooling certainly were plenty.  Thanks to all who invested time taking the quiz, and we’re going to spend the next several blog posts discussing the answers, a handful of questions at a time.  Let’s get started with the first five.

1. Businesses go broke due to lack of volume:  FALSE.

Most businesses go broke due to lack of CASH!  To quote my favorite business author of all time, Larry Steinmetz, it goes like this:

“We’re having trouble paying the bills because we have no cash.  How do we
get cash?  Gotta sell stuff quick.  How do we sell stuff quick?  Gotta cut the
price.”

At that point, business volume starts to go up.  However, the problems that led to a shortage of cash still exist.  And selling more stuff at a lower price simply cuts your gross margins even further, which will make the cash shortage even worse.  When the company does finally go under, one of these two observations will be made:

  1. “I can’t believe we went out of business!  We were crazy-busy right up until the doors closed”
  2. “No wonder we went out of business.  No one can survive with prices that low!”

2. All things being equal, people buy on price:  FALSE.

Sure, it sounds true, maybe even obvious.  But it isn’t.  Say you’re looking to buy a Ridgid press tool.  A Google search for the 31048 RP 210-B will provide you with a bunch of prices, ranging from a low of $1,434.17 at Lake County Pipe and Supply to a high of $1,613.34 at the Test Equipment Depot.  Well, duh, there’s a $200 difference – no brainer, right?

Oh, and just to be thorough, you check your favorite wholesaler and find he’s selling the tool for $1,525.93.  So which one do you buy?  If “all things being equal, people buy on price” were actually true, you’d be buying online from Lake County Pipe and Supply, right?  Well, what if you absolutely, positively need it later this week?  Expedited shipping adds up to $117.00 to your best online price, while you can have the wholesaler deliver it to your door the next day.  Or you can go pick it up yourself.

Now what?

Let’s say you don’t need it right away, and the regular UPS ground shipping at about $13.00 is fine with you.  Still going for the lowest price?  Well, it depends.  Lots of questions for the small businessperson to ask here – who is this Lake County outfit?  What if I have a problem – who do I talk to?  I may not need it tomorrow, but I need it soon.  Will it be in stock? Do I want to put it on my credit card, or would I rather have the charge on my store account with the wholesaler? Do I even want to give out my credit card info on the Internet?

The point here is that no matter what, all things are never equal.  You may try to play the “all things equal” card with the wholesaler to try to get him to match the online price, just like your customers do to you to try to get you to lower your price to match a less qualified competitor.  Your job is to make sure he understands that things are most decidedly not equal.

3. Price is more important than service:  FALSE

Oh man – this is the fourth time today I’ve called, and I still haven’t talked to a real person.  All I get is voicemail!  The message says my call is important to them, but this waiting is frickin’ ridiculous. I need help NOW!”

 

You need help and you need it now.  You have a business to run, and you can’t be lost in voicemail hell waiting for tech services to call you back.

If they call you back.

And if they call you back, will you talk with someone who can answer your questions?  Will they understand your problem?  Can you rely on what they tell you?  Is their website even remotely helpful?  Will they process your return in a reasonably quick manner?  Will they train you on how to use their products and help you learn your profession, or will everything they do be one big sales pitch?  Do they respect your time, even though you’re a small guy, or will they waste your time because you’re a small guy?

Is the product chain (manufacturer-rep-wholesaler) that helps you do your job more effectively and profitably worth a few extra bucks?

4. Quality is more important than service:  FALSE

 

This one surprises you doesn’t it?  As we said in a previous blog post (click here to review), we’re technical people and we believe in technical superiority and quality.  Let’s say I have a customer who wants me to install a new tamockifier in his heating system, and my two favorites supply houses carry competing brands. Both Tamockifiers will do what I need them to do, but Tamockifier A is from Europe and everyone knows European Tamockifiers are better.  But the guy selling Tamockifier B has treated me great, we’ve had a terrific relationship for the past 10 years and whenever I’ve had a problem, he’s been there to help me.  He comes by the shop regularly even though I’m a small outfit, and he never wastes my time – he always has something useful to help me run my business.  They put on great seminars, have a useful website and he always calls me back within 30 minutes.

The wholesaler selling the fancy European Tamockifier has been trying to get my business for years, but every time I order from him something doesn’t go right – shipping is late or the order gets fouled up.  They never seem to have the same salesguy call on me 3 months in a row – I never know who I’m dealing with.  And the store is way the hell out of the way, so pick-ups are a pain.

Get the picture?

5. People only spend money on things they can see:  False

 

I know, I know, it seems true.  But it ain’t. It is, however, a very handy excuse for failure.  And failure, friends, is not an option!

But they’ll spend on granite counter tops.  They’ll spend on fancy fixtures, the stuff that’ll impress the neighbors.  They won’t spend on their home comfort system.”

Wah, wah, wah.  Stop it.  There’s no crying in hydronics!

Look, saying it over and over again doesn’t make it true.  It’s an easy conclusion to reach, but it certainly runs counter (pardon the pun) to the idea that people buy on price (or don’t care about service or quality). Laminate countertops are a lot less expensive than granite ones, yet some people still buy the granite.  Why?

Because someone did a very good job of explaining the value and benefits of granite compared to laminate, that’s why.  The customer chose to spend more money because they felt there was a benefit to them by doing so.  That’s called salesmanship, friend.

Don’t think for a minute that mechanical systems aren’t getting more attention these days. People are concerned about efficiency today more than ever, and that’s an opportunity the granite counter top guys never had! If you can confidently discuss the benefits of a higher efficiency home comfort system, and show how your offerings will not only lower energy bills, but make your customer’s home more comfortable year round, as well as make the home more attractive when it’s time to sell, and if you’ve asked the right questions and listened carefully to the answers…well, you’re selling!

That’s the first five down.  We’ll answer some more of the quiz questions in a couple of days.

But first, you will no doubt remember this classic from The Raspberries.  It was from their debut album (with the scratch ‘n sniff raspberry scent on the cover!), reached number 5 in the summer of ’72 and has one of the hottest opening riffs in all music-dom…

Spin Magazine placed “Go All The Way” #91 in its 100 Greatest Single of All Time list, and it is #2 on my list of all-time songs that need to be PLAYED LOUD!!  Crank it up and enjoy!

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