I recently learned my all-time favorite definition of the word “value” from DigitalMarketer’s CEO Ryan Deiss. He said “value is the difference between the anticipated price and the actual price.”
“WOW!” I thought. That is one of the most accurate statements I have heard in business. Think about it… when you go to the store and see an amazing pair of shoes on the shelf, you think to yourself “gee, those are really cool. They must be $50 or $60 I bet.” Then, you look at the price tag and to your delight they are only $40! What a great deal, right?!
Though you would not be thinking that if the opposite were true.
I’m sure you have also experienced seeing a nice pair of shows and thinking, once again, “gee, those are really cool. They must be $50 or $60 I bet.” But this time when you look at the price tag they are a whopping $70! I can practically hear Howie Mandell saying “NO DEAL.” That’s because the anticipated price ($60) was lower than the actual price ($70).
How This Relates to You
Let’s look at how this applies in a home service business. In most cases, a service company such as your own will chard anywhere from $49 to $189 for a service call fee. You and I both know that there is a lot that goes into that fee, but one of the most common mistakes we hear CSRs make on the phone is telling the customer that it’s going to be $100 for us to “come out.” And then almost instantly the customer snaps back with something to the effect of “$100??!! to come out?” Then, they hang up and call someone else.
Sound familiar? Even if your CSRs are not blatantly saying that’s how much it is to “come out,” it’s likely you are not creating enough value before you present that fee! The anticipated price in the customer’s mind for “coming out” is somewhere in the ballpark of $0.00 to $0.50. So, when you tell them it’s $100 for that trip they are seeing almost NO VALUE!
If you are thinking that this does not apply to you because your team is always very thorough in explaining what’s “behind the fee,” then you may want to continue reading because that too is a sign of a missed opportunity. You see, what you need to do is…
Build Value in the Service, NOT the Fee
Often times companies THINK they are building adequately value because they explain to the customer everything “behind the fee.” The problem with that is that you are focusing on the fee when you should be focusing on the service! Telling them what’s “behind the fee” just makes you sound like you are trying to justify charging them lots of money. Build value in the service and then present the fee as a means of reinforcing how amazing you are!
Here is an Example
This is what a build value statement that focuses on the service provided sounds like:
“Our goal is to get your [air conditioning / furnace / water heater / garage door / etc.] taken care of so you are your family are in a comfortable situation again. To do that we are going to send out a licensed, trained, and certified technician to your home. He is back by our company that’s been in business for over 30 years so you are in good hands. He will have a fully stocked truck with him at your home and will be prepared to get started on the work as soon as he arrives. He will start with a thorough inspection of the unit, determine what needs to fixed, and go over all your options with you – it’s like an in-home consultation. He will present you with a quote for the cost of repairs at that time. To have him come out and do all this, it’s only $150 (or whatever your fee is).”
So that’s our goal – build value before you present the fee, and make it about the service! Let us know how it goes!
Zac Garside is a coach, trainer, and the marketing manager for Power Selling Pros. He finds joy in giving a voice to the ones that can change the world. You can get him talking for hours if you bring up Simon Sinek or the Philadelphia Eagles.