The long term solution to achieving your ultimate goal to earn more and work less is to charge a higher price for your services and products. When you charge higher prices, you will also make higher gross profit margins. This will create more money to spend on an excellent empowered management team and full charge trained employees. It will allow you extra cash to invest on improving your operations, finances, accounting, marketing, sales, and customer service. In order to charge more, you must strive to become the leader in your market. Back to FedEx as an example. They are the market leader and get more for the same service as their competitors.
Your customers must be willing to pay your company more for products or services than your competitors. Therefore you must offer something different than your competition like more value for the same price, a unique different delivery method, or additional value-added services. Take a moment and describe 5 things you can offer customers which will allow your company to charge a higher price than your competitors:
As an example, a commercial general building contractor can continue to bid projects to developers per plans and specifications and get awarded the contract if they are the lowest responsible bidder. Or they can negotiate the project at higher prices than their competitors if they offer additional valued or unique services. What can this general contractor offer or provide to encourage potential customers to award them contracts at a higher price?
- Total development management from concept through completion
- Design-build architecture & engineering
- Guarantee no plan omissions, conflicts or mistakes
- Assist in securing project financing
- Find equity investors for the developer
- Prepare overall project budget & investment pro-forma
- Obtain all City approvals and permits required
- Obtain all utility company approvals
- Complete interior design services for tenants
- Guarantee no change orders
- No mark-up on change orders
- Guarantee faster move-in & occupancy date
- Guarantee no punch-list or defects
- Full time superintendent with college engineering degree
- Project manager certified in construction management from the Construction Management Association
- Project accountant certified from the Construction Financial Management Association
- Monthly service for one year on all building components
- Site and landscape maintenance for one year
I know what you’re thinking. ‘We don’t get paid for all of those extra services so how can we offer them?’ Continue to do business the same way, offer exactly the same as your competitors, and continue to struggle to make any real net profit margin. Is the Ritz Carlton cutting back on services or doing whatever it takes to give the customer more than they expect?
What can you do to charge more?
To offer additional value-added or different services than your competitors takes more intensive customer or project involvement, strong company management, and a better trained staff. But it will set your company apart from your competitors. What do you have to do to be different?
- What five things are most important to our clients?
- How are we doing on each?
- What is the evidence of our performance?
- Do any competitors do it better than us?
- What can we learn from them?
- How can we do things better?
- How can we set our company apart?
Are willing to do what it takes to offer more in-depth value-added services which will get your customers to pay more for you’re your company than your competitors?
Develop loyal customers who will pay more!
Another way to differentiate your company is to have incredible loyal customers who deeply trust you and your company. And because of this trust, they know you’ll do a better job than any other competitor in the marketplace. Quality customer relationships will cause customers to be loyal and only want to do business with your company. This type of relationship takes time to cultivate and a commitment to spend lots of time with valuable customers. Providing good work will not set your company apart from your competitors as they also try to do a good job. Developing and building trust takes a concentrated systemized effort and program. It requires a written plan and includes dedicating regular time to take customers to lunch, attending sporting events, fishing or golfing, weekend trips, and sending thank-you notes and gifts on a regular basis. To carve out the time to build loyal customer relationships requires you to free up 33% of your time. To do this you’ll have to improve your company, management team, systems, operations, and service. Are you willing to do what it takes to build customer relationships in order to increase your profit margin and get what you want?
When your company works and delivers what you want, you feel great. Your company is running on all cylinders. Building your business and making money is easy. Customers want what you offer. Your company doesn’t rely on your constant input and direction to deliver a big net profit margin and sales. Your bank account is growing. Your investments are spitting out lots of monthly cash-flow. Your managers and employees are happy and humming. You walk faster and lighter on your feet. You are excited about going to work because you aren’t bothered with the little details that bog you down. You have pride in what you do and want to accomplish more. Your family is also happy as they get to spend more quality time with you. And your are living a significant life with extra time to enjoy and money to give back to others. Stop making excuses and settling for less than you can accomplish. Take this challenge to move beyond mediocrity. Do what you must do to earn more, work less, and live the life you want.