I have always believed that there are two ways to go about selling a service.  Sell the service or sell the price.  There is a market for both.

I had a great mentor many years ago that taught me one lesson that I live by today.  You can not win on price alone, because someone is always dumber than you.

A little background:

For many years I sold equipment and supplies in the printing and graphics business.  I was very successful at it and enjoyed my work.  I also took extreme pride in knowing my products and market better than any of my competitors.  My service was always the best I could make it and I constantly strived to improve both my expertise and my service.

When I reentered the real estate industry a few years ago I approached selling homes the sale way I approached selling printing equipment and supplies.

The best way I can illustrate my approach is by sharing one of my favorite printing sales.  True story from many years ago:

The largest print shop in Honolulu was building a new building and planning to merge a couple of their businesses under one roof.  They went out for bid for their new pre-press department.  This was in the days before desktop publishing.  Everything was done mechanically on light tables and in a darkroom.  Their request for bid included each and every line item as a separate quote.  My competitors went line item by line item cutting their prices to the bone so as to win the orders for every piece of equipment and every little item down to the t-squares.

I spent a couple of days in the new building measuring the new area and evaluating their needs.  I studied their workers and their work flow patterns.  I met with manufacturers like Kodak and Agfa.  We developed a new plan for the client, which included long term contract pricing for their major consumable purchases.  It also included a commitment for their future business.

My proposal listed all of the lines items included, machines and everything down the t-squares. The one thing missing was prices.  I had a total price at the bottom.

I submitted my proposal with a cover letter explaining my plan.  I included contracts committing them to buying their supplies for the next three years from me.  I also provided them contract pricing for the consumables the real carrot here.  The spent many thousands of dollars every month on those.

The day of the bid opening came.  I shortly after got a call from their purchasing agent requesting me to break down my proposal line item by line item.  I politely declined and said it was all or nothing.  I knew I was saving them major money and did not need to back down.  I got the expected call a little later from their plant manager.  After a great meeting with him and his department heads.  I was awarded what was the largest local order placed to date.  At that time I was 23 years old, the youngest and newest in the business.  I followed that up by doing something similar at other top accounts in town.

Why did that happen?  I moved their business forward, I brought added value to their business.  I did not so the same old thing and try to shave a few pennies off the price.  My competitors would have probably beaten me anyway. 

I made my clients real money.  I tied that in to a contract that would compensate me appropriately.  Not one client tried to beat me up on price or profit margins, that was not even a discussion.

That was a long story.  Why I am a sharing it with real estate folks?  The products are different, the principles are the same.  You can sell Price or you can sell Value. 

Price

• There are agents and companies that provide limited services and offer lower fees for that.  There will always be folks that do that.  It is quick and easy (lazy) and requires no expertise.

Value

• There are agents and companies that provide a much higher level of service.  They sell homes faster for more money and take away the stress and strain from the sellers and buyers.  For that they charge a higher fee and do not have to give away their services.  They bring value. 

Value Plus (premium service)

• There is another group of agents and companies out there.  They are the elites in this industry.  They bring an added value that customers are willing to pay more for.  The make their clients more money and find better ways of delivering services.  They bring a higher level of value, just like my example of above.

In future posts I will be writing about premium services and my plans to move my business towards Value Plus.  It is harder than selling price, but the rewards are greater.