Does The Best Price Always Win The Business?

Post published 24th April, 2014

Sometimes as a business owners we need to learn to think more like our customers to win their business and understand what motivates them to make a decision.

This post is a real example of two competing businesses quoting for a job, what they did, who won the business and why.

Would you use the same approach as the winning business?

What Do Your Customers Really Want?

For our first blog of 2012 I thought I would share a story about some friends of ours who we caught up with over Christmas. Our friends are not business people, they are teachers and sometimes as small business people we can forget how the outside world, other than small business owners look at things.

Our friends needed to get a new roof, so like most sensible people they decided to get a couple of quotes from different roofers. Two people came out to give them quotes and this is a great example of how the impression your business gives can have a massive impact on sales.

The first man came out, a perfectly nice man who seemed to know what he was talking about relating to roofing. He measured up, wrote down his mobile number, told him they could call if they had any questions and that he would be in touch with his quote.

The second man came, equally personable and knowledgeable. This man gave them a brochure to look at, referred them to his website where they could see examples of previous projects, he gave them his business card, told them that they could call his mobile or his office number and said that he would be in touch.

In the next couple of days both quotes arrived, the first man’s reasonably typed up, the second on corporate stationery, very professional looking.

As you may have already guessed, the second quote came in a fair bit higher than the first.

So who did they decide to give the business to? The second, more expensive company.

Price is not everything. Concentrate on demonstrating how you are worth more

Our friends, intelligent, steady people, not the sort to pay over the odds for anything, chose to go with the second quote although it was a fair bit higher. When I asked them why, they said they felt that the second man appeared to be from a larger company and that gave them greater confidence that if anything went wrong they would have someone else to go back to.

The reality is that both of these roofers could have been working alone, but the second, through having the website, the brochure, the business card, the headed paper, the office number (which could have been a telephone answering service) gave the impression of being larger and at the same time more professional.

None of these things actually have any bearing on either man’s ability to fit a good quality roof, but what it does show is that the second company cares about how it is perceived by people, which clearly goes a long way to establish trust and win business.

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