How to Sell Value -- and not Price

Tips on how to sell value and not price in construction

As a pavement contractor you buy a lot of products and services for your company. How do you buy it? Really think about it – It’s not always about price. When you have a serious legal issue do you go for the cheapest attorney? If you have an IRS issue do you search out that super-cheap accountant? Or maybe pick your doctor based on price? Unlikely!

There are some things you buy based totally on price. For example, if three providers of fuel have the same product and distribution, then price is the deciding factor. When it comes to cell phones and Internet, your deciding factor mighty be based on reliability and experience; price is lower on the “deciding factor” scale. Our experience, both good and bad, helps us to decide how we buy goods and services.

How to Engage a Prospect

You are seated on an airplane and it just so happens that the Executive Vice President of Property Management of Equity Realty, one of the largest Real Estate Investment Trust owners in the apartment industry is sitting next to you (they have hundreds of apartment complexes around the country and six are close to your company).

He tells you more than 60 people report to him -- regional VP’s, property managers and maintenance supervisors -- across three states. He mentions that parking lots have always been a pain in the neck, then he looks at you and asks, “If I put you in front of my team how do you think you can help us with our parking lot pain?”

You have two seconds to be of great value or have him fall asleep. What you say and how you reply could be the difference between having a great shot at a $200,000/year account (or) being just another proposal that comes late to the bidding party.

You Only Have Two Seconds!

Here’s how to win this account, gain the respect of the executive who will introduce you to the four layers beneath him, and set the expectations for his local team (regional manager, managers, maintenance supervisors).

You Answer: That would be a great opportunity, and I am certain we can share how we have helped other companies like yours with parking lot pains. Can I ask you a couple questions about why parking lots have been a pain?

Exec VP: Sure.

You: With REITs it seems your projects are either “maintenance” or “capital” projects. Can you share with me your pain points for the each of these type projects?

Exec VP: Our capital projects team struggles with gathering the scope of work for major paving, concrete and drainage projects and getting agreement that it is the right scope based on our needs. Then we have trouble having the local team identify contractors who can deliver to the scope. There always seems to be a disconnect between what we thought we were getting compared to what we got -- as well as if what we even scoped was the best plan?

On maintenance projects it is the coordination and execution of the projects that wastes a lot of our company’s time and causes frustration. It seems that our site people always have issues with coordination, communication and just getting the contractors to help us and do as they originally promised.

You: Does Equity Realty have a simple, defined process for assessment, scope creation, contractor selection, project kick-off, result review and measurement where the property, facilities, owners and executives all have a clear picture of what, why and how this all benefits Equity?

Exec VP: Let me write that down. That would solve a lot of problems. Truly, each region or property does things differently. We have no defined process, which I guess can explain why parking lots are a pain! Is this something you can do for us in South Florida, that we then can use across the country -- as my idea!

You: Yes. As you just said, you want someone who can help you solve problems and hopefully I just demonstrated how! We just figured out that parking lots and contractors are not the problem, but having someone to solve a problem with simple solutions that meet your needs is the solution.

Exec VP: Thanks. This is refreshing. Most times I have a conversation with a contractor who tells me what he does, who he has done it for and why he is better than all the other contractors. Contractors never really ask me about my needs and issues, first, like you did. You asked me questions that made it very clear you understood what my problem is and I see the value in time, money and frustration reduction that will benefit me, my team, company and the residents who live on site.

You: I will report back to you via email with a summary of what we discussed and I will also include an example of a survey of one of your sites in Ft. Lauderdale to demonstrate how working with me will help you to preserve your asset for the long term for the least amount of money.

It’s Overall Value vs. Price

Contractors often get desperate and try to close deals by cutting price when they don’t have enough insight into the client’s or prospect’s organization. You are going to struggle today if you don’t realize that having knowledge of the industry (the stuff your customers don’t really know) is only part of the requirement to be of value. As a “pavement solution provider” it’s crucial you gain insight into what’s going on in a prospect’s company and industry. When you understand your client/prospect better you can clearly show how using your company will connect to their wants and needs better -- then suddenly price comes off the table. The conversation becomes all about overall value instead of about the price to patch, pave, sealcoat, sweep, crackseal and stripe a parking lot.

Michael Barrett is an industry expert who shows pavement contractors how to break through the clutter and demonstrate value with his firm www.pavementlayers.com

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