How to Attract High-End Customers

Selling to high-end clients is arguably one of the quickest ways to increase revenue and improve your profitability. In today’s episode of PowerTipsTv, I’ll give you some tips and tactics to attract the strong purchasing power of this coveted market segment.

Special thanks goes out to @LeoLantz for requesting today’s topic!

Have a question you need answered?

Follow Leo’s lead and send your questions to me via Twitter @VictoriaDowning with #PTanswers!

How about you?

Have some cost effective tips I forgot to mention? Please share them in the comments below!

Sales Tips to Give You The Edge

We constantly hear about Remodelers making proposals to prospective clients only to be undercut on price.  Here is the solution, presented by Ted Dubin, our Director of Business Development and in-house Sales Trainer.

Creating the Need

As Victoria mentioned,  one of the most frequent topics of discussion in our conversations with Remodelers is the issue of price competition. Our Remodelers Advantage members are constantly presenting their best proposals to prospects, then shortly thereafter, finding out that the prospective client has found some outfit that promises to do the work for a lower price.  Sometimes you don’t even get to make a true proposal because you immediately hear “xxx can do it for less”.  There are situations where you know the other guy’s quote is so low that they can’t even buy the proper materials for the price they’ve quoted, much less perform the work.  Other prospects decline to move forward because the cost of the project they’re asking for is more than they expected.

You know you do great work, you know you’ve priced the remodeling work fairly, and you know you can’t lower your prices beyond a certain point or you’ll go broke.  What you need to learn is to sell and compete on value, not price.

Price is not the object

People don’t buy price, they buy value, from the person or company they perceive as most likely to deliver the best value.

Don’t believe this?  Look outside in the parking lot .  All types of cars are out there, but very few, if any, are the cheapest model available. Why doesn’t everyone buy the cheapest car possible?  If you can get a new car for $10,000 then why do people purchase more expensive vehicles?   People buy products and services based on their expectation of the product or service’s ability to deliver what they need.

It’s the same in the Remodeling industry.  No one brags to their friends or family  “Nice job, huh? I went with that company because they cut the price of my new toilet $5″ or “They discounted my lumber $500″. They say “I went with them because they really seemed to care about the needs of me and my family” or “I went with them because they really took the time to understand what was important to me”. But, if you haven’t educated your prospects properly and helped them discover their true needs and desires, they will always go for the lowest price.

Now, you say “Yeah, I’ve heard this before.  I deliver a great value but nobody cares”.

You need to show the world why they should care.  Prospective buyers will always purchase from those best able to explore and draw out their wants, needs, and desires.  The problem is too many Remodelers are, by nature, terrific problem-solvers. They just can’t wait to show the prospect the great design they’ve come up with and get started.  Unfortunately, simply proposing your great design solution is not enough.  If you show your product to your prospect before you’ve helped the prospect discover the need to buy from you then you’re just wasting your time. You’ll lose out to the first competitor that promises to do the work cheaper.

How do you teach your prospects that you will deliver real value and convince them that they should work with you instead of any other firm?

Asking your prospects open-ended questions creates the need to buy only from you.

Why I paid $3000 for a pebble and was happy about it

Let’s illustrate with a real-life example:  Years ago I wanted to buy an engagement ring.  So I did the natural thing and went to the mall (lots of jewelry stores at the mall, right? So I’m sure to get the best price).  I went into the first store and announced “I’m here to buy an engagement ring”.  The clerk went to a display case, opened the case and took out the little velvet tray with diamond rings on it.  Of course, like most jewelry stores, the price tags were upside-down.  As the clerk stood there (silently) I flipped the first tag – $1500? No way!  I thanked the clerk and left.  I proceeded to the next store where the (also silent) clerk opened his case, took out the tray (with the price tags upside-down) and laid it on the counter.  I flipped the tag – $1750?  That’s even more than the last guy.  No way!  I left that store too.

I went to a third store and announced my intention to buy an engagement ring.  The gentleman running this store did NOT take out any merchandise.  Instead he asked me “What do you know about diamonds?”.  I told him I really know nothing about diamonds as it’s my first time buying any jewelry of this type.  He then spent the next hour teaching me about diamonds (you know: the 4 “C’s” –  Color, Cut, Clarity, and Carats. I still remember this 20 years later).  He asked me lots of open-ended questions such as “What kind of style does your fiancé enjoy i.e. traditional or modern” , “How often does she wear her other jewelry?”, “What sort of work does she do?”, etc.  We then looked at an assortment of diamonds through a loupe (a jeweler’s eyepiece).  He showed me diamonds of different colors vs. pure white and an assortment both with and without flaws, all the while asking me “How do you feel about flaws in the diamond?”, “How close to completely white do you think your ring should be?” and “When you buy the ring how do you want it sized?”.

Only when the jeweler was thoroughly convinced I was really feeling the need to make a great purchase did he bring out his merchandise.  By working with me he was able to say “Here’s what I recommend”.

I bought from him.  The ring I chose cost $3000, twice as much as the competitor’s price in the store that I walked away from as too expensive.  And I was thrilled!

Equally important, here’s what didn’t happen:  I didn’t try to bargain because I now understood I was getting a good value.  I didn’t walk away and try the next store.  And, I didn’t go back to the first 2 stores and try to comparison-shop.  No, this was “my guy” and I was buying from him and only him.

How to create the need for the prospect to only buy from you

Remember, unless your customers understand value, they’ll see it as their duty to select the Remodeler with the lowest bid.

You must ask a series open-ended questions BEFORE you make any product presentation.

As a refresher, open-ended questions are those that cannot be answered by a yes or no.  Open-ended questions begin with “Who, What, Where, Why, How” and “When”.  These questions make your prospects think before answering.  They naturally lead to further conversation.

Think back to the jeweler in the example.  Now, apply this to your Remodeling business.  Do you work on kitchens or baths?  OK, ask your prospects “What do you know about how cabinets are made?” or “When you choose your faucet, how long do you want it to last?”, then explain your use of only superior products from reputable suppliers.  Building an addition?  Ask “How will you and your family use the room?” or “What do you know about framing?” or simply “How do you want the room to feel?”, then sell your expertise at great design and solid, weathertight construction.  Set up the opportunity to sell your better-than-the-competition practices: “When the work is in progress how important is it that the crews maintain a clean environment?” or “How important is the reputation of the company you choose to work on your home?”.

Every good Remodeler should have at least 30 open-ended questions ready to ask without hesitation.  Of course, you’re not going to use all 30 in every meeting.  But a few smart questions asked with confidence will make the difference between trying to justify your bid against a lower price and  making magic happen with your clients.

When do I ask these questions? Again, after you’ve qualified the prospect to make sure they can buy what you’re envisioning but BEFORE you present your proposal.  NEVER make a presentation until you’ve firmly established in the client’s mind that they need to buy only from you.

Your Task:  Develop a minimum of 30 open-ended questions that demonstrate the value of your company and its great work to prospective clients.  Practice so you can deliver these questions with confidence.  Keep a list of what works best for you.  And, use the questions you’ve perfected with every prospect every time.

Watch your sales increase and your price competition evaporate!

If you’re serious about improving your selling skills, join us at the Remodelers Advantage Community Meeting this September 26-27 in Austin, Texas. Seats are limited so reserve your seat today.

Becoming a Great Salesperson: Tools for Staying on Top

In the past 3 weeks, I’ve heard from six different remodelers who are very concerned because clients are accepting proposals that are priced significantly lower than their own. It can be devastating to one’s morale to have worked for weeks on a detailed remodeling project proposal only to be told that they’re giving the project to the lowest bidder.

This is almost always a bad decision. I’ll bet every one of you can tell a story about a client who did the same thing only to find that change orders were rampant, customer service was nil, and the entire experience was a nightmare. Clients that choose the lowest price rarely get the “deal” they expect.

A reporter for a midwest publication recently called me to comment on this trend and I told him something I don’t think he expected: “Haven’t these homeowners ever heard of the saying — If it looks too good to be true, it probably is? The homeowners are causing a great deal of the problem because they’re pushing remodelers to cut so much that they can’t deliver the experience that they know clients expect.”

I mean really, what do homeowners expect when they accept a proposal that is tens of thousands of dollars lower than the next?- in many cases, that amount is lower than the legitimate costs of remodeling professionals. Do they really think that the costs for these jobs vary that much from company to company? Seeing significantly lower numbers should be a huge red flag to the consumer. But in many cases, they see the projected savings and all reason goes to the side.

So, one important tactic to overcome this trend is to become an outstanding sales person — someone who knows how to communicate the value of the job, the value of a great customer experience, and the value of working with an established, knowledgable company.

What have you done to improve your selling skills lately? Our Remodelers Advantage members are sharing information, listening to sales training teleseminars, participating in webinars, and searching out the information they need to really ramp up the effectiveness of their sales ability. Many are participating in Sandler Sales Training or other professional sales training programs. At Remodelers Advantage, we’re putting more and more emphasis on marketing, and sales throughout our community.

Improving sales skills is not a silver bullet and it’s not going to have an impact overnight, but it’s time to realize that selling skills (not aggressive, hard selling techniques, but consultative, relationship-building tactics) are going to be your strongest tool to overcome the bad apples who are consistently underpricing the market. That is, until they go out of business.

Growing Your Sales Team: Is the timing right?

I was reading an article from INC. magazine in which the author talked of attending a presentation given by a successful entrepreneur who asked the large audience, “Who here is involved in selling the company’s products or services?” Everyone held up his or her hand. The presenter responded, “Shame on you! If you are the owner of the company, you should hire salespeople to sell your products or services. You should be focused on selling the company!”

In other words, your highest impact activity as a company owner is to build the value of the company so that it is worth something to someone else — someone who will buy it! This was an epiphany to the author of the article and has struck a cord with the several remodeling company owners with whom I shared it. Their common response: “Boy, I’d love to be able to focus on building value in the company instead of having to sell the remodeling!”

Today, I’m seeing more and more remodelers and painters taking the first step and bringing on sales professionals, most for the very first time. I’m enthusiastic about this direction because it means more feet on the streets promoting your brand while uncovering prospects. We have a group of members in our Remodelers Advantage social network who are sharing commission structures, job descriptions, and working together to start the process of building a sales team right. So, first, establish a strong sales team which will allow you to move your focus elsewhere.

Second, focus on building value within the company with documented processes and procedures, detailed job descriptions, production systems and communication techniques, an organized client database, a proactive marketing program, and key managers that bring enthusiasm and creativity to the table. This level of organizational development shows that the company isn’t solely dependent on the owner’s experience to function but will continue to grow profits and a community of delighted clients based on the huge value within. It’s a business improvement strategy that could have huge positive effects for your company. Now that’s worth something!