Brands and Pricing – Is There a Relationship?TomChilders
Your brand ultimately influences what people expect from your company and this in turn impacts how people respond to your pricing. If your brand is different in a good way, your price difference might be acceptable. If your brand is not different, you are in the crises of similarity yet you are trying to price differently.
You pick up a black and white copy of a flier taped to your mail box and it says call today for a free quote, best prices in town, and quality material and workmanship. You call and get set up for a bid. The proprietor shows up as sheduled, knocks on the door, and says he will be done in fifteen (15) minutes to walk you through the quote. He does and in all of thirty (30) minutes it is done. You have a bid with some outdoor lighting specs and your head is swirling with terms like LED, path, up, down, lamps, voltage drop, etc.
That night you are at the neighborhood association fall football festival. You are socializing with all of your great neighbors when the conversations goes to outdoor lighting. You listen and say, “I just got a bid on one today.” “Really, who from” asks a neighbor. You think for a minute and then slowly recall “Awesome Outdoor Lighting Co.” “Never heard of them. Most of us used Impecable Outdoor Lighting Co. He has been around for years and very few problems. If there is one, they show up fast” he says.
As the night progresses, you find your way to your go to guy on all things outdoor, Johnny Fairway. “Johnny, everyone seems to have used Impeccable Outdoor Lighting. Did you?” “Sure did. They are rock solid and do great work. The owner is my daughter’s softball coach too. Great guy and honest through and through.”
Let’s stop here and talk pricing even though no numbers have been shared yet. Who wins in an even price or lower price scenario? Impeccable, hands down, right? At a premium price, who wins? Awesome definitely can’t come in at a premium price but perhaps Impeccable can. Yes, these are assumptions but based on what we know about these company’s brands, they are safe assumptions.
If you need more than logic and safe assumptions, let’s dive a little deeper into what Impeccable has done to build it’s brand. For starters, it has employed four (4) of the six (6) key principles of influence. They are reciprocity, social proof, authority and liking (see Robert Cialdini, Influence:The Psychology of Persuasion). The power of reciprocity (people return favors – invest in the their communities and they will consider reciprocating with you) and social proof (strength and comfort in numbers) alone are enough to convert a referral but when coupled with authority (Johnny Fairway) and/or liking (great neighbors), it is as influential as it can get. This is a result of branding strategy and deliberate thought.
This is why you must consciously work on your branding efforts and think through your target market and objectives (and read or listen to the Cialdini book – a must). Impeccable wants to target residential areas with upper middle and higher income brackets because they have produced higher margins and better cash flow for the business. It has a long track record of success in these types of communities and clusters. The owner enjoys it so it makes success easier. They pick the high schools in those target areas and buy advertising to the three main sports seasons, football, basketball, and baseball. Then, he also promotes that the first service of lawn care or maintenance will go to the sport or club of choice at the high school. Using a consistent logo that was professionally done and consistent copy and tag lines (good visual and verbal identity), he does three drops a year (some solo mailers, some coop, i.e. RSVP, Money Mailer, etc). He looks for volunteer opportunities that he truly values and is well suited for. In the right situations, he even sponsors these using his company name. He enjoys giving back to the communities he serves and encourages key employees to do the same.
Looks for opportunities to advertise in neighborhood newsletters whenever possible and puts his website on everything. Has a nice ten page website that provides basic info on the company, some satisfied customer reviews, contains key products used, pictures of major jobs and a lot of reference links and material from The State University and the local extension agent that everyone loves. Links to how to videos and shares openly without fear of sharing too much or losing business to DIY. Trusting but also trusted!
Now what if you are Awesome? What should you do? For starters, have real dialogue with your prospects and customers. Just soliciting for and handing out bids puts pressure on your pricing and resources and it is not much fun! Without real dialogue, you lose a great chance to discover what customers are really looking for and a chance to help them see what is unique about your offering. If you don’t know what is unique about your offering, you might want to spend time on developing your unique selling proposition. Or, if it is time for a full deep dive, check out the Strategy section which covers Business Plans, Customer Acquisition, Marketing Your Business, Pricing Products & Service, and Strategy.
In a sea of similarity, building a strong brand can help you win jobs at better margins. It’s not easy and it takes real time, thought and effort. It is one of those activities that falls into the category of working on your business as opposed to working in it. Make the time to work on it and you will be happy with the return in the long run!