Tuesday, December 29, 2009

When the Customer Knows More than You

If you have been in business very long, you have likely run into a customer or two who knows more about painting than you do. Or at least, the customer thinks that he does. I used to get very annoyed with such people, buy now I simply find them amusing.

My company has painted more than 200 houses a year for the past 15 years. Since I get about 40% of the jobs I look at, this means that I have looked at about 7,500 paint jobs over the last decade and a half. I seriously doubt that a non-professional painter has even looked at the painting on that many homes, let alone tried to identify the various conditions and issues present.

But that certainly doesn’t stop some people from pretending that they know more than me. Apparently they believe that watching an episode on HGTV provides more experience and knowledge than years of actually painting.

I generally find that such people do not make very good customers. They tend to be very closed to listening to my advice and recommendations; they tend to have very selective memories and only recall what fits their preconceived notions.

This isn’t to say that every customer who has an opinion on painting is going to turn out bad. Indeed, I prefer customers who have done some homework and understand what should be considered regarding their project. But they also must be willing to listen.

I have said many times that sales is about communication, and communication is a two-way street. Just as a contractor should not assume that he knows what is best for the customer, the customer should not assume that he knows more than the contractor. Each must listen and learn.

Tuesday, December 1, 2009

Good in Theory

We often hear someone say, “That is good in theory, but it won’t work in practice.” The intended meaning is that some idea sounds logical, but in the “real world” it just won’t work. But the fact is, a theory that won’t work in practice isn’t a very good theory. Good theories make good practice. Ideas are our guide to action.

Many people—and contractors are certainly no exception—are loath to try new ideas. They get locked into a certain mindset and often refuse to consider new alternatives. They may not like the results that they are getting, but the comfort of the known is more powerful than the unknown of trying new ideas. When they hear a new idea, they are quick to reject it as “good in theory”.

I see this almost everyday. One of the most common examples is the claim by some contractor that his market won’t bear higher prices. “You don’t understand my market,” they argue. “My customers simply don’t have the money to pay $40 an hour for painting services.”

Such contractors often concede that they must charge $40 (or more) an hour to make a decent wage, but they refuse to consider methods for doing so. On paper (in theory) they agree that they can’t make money charging $25 an hour, but in real life (in practice) they can’t charge more.

Consider what this really means: The facts indicate one thing, but I am going to ignore those facts. I choose to cling to my old ideas, even though I am going broke. All of your fancy math formulas won’t change anything. Your ideas are good in theory, but they won’t work in practice.

If we consider the rate we charge in complete isolation of other facts (or consider only a few other facts), this might be true. But our selling price is not an isolated fact, divorced from many other considerations. Our selling price is a consequence of many factors; the market in which we operate is only one of those factors.

As an example, we have many options when it comes to buying a hamburger. We have McDonald’s, Wendy’s, Burger King, Jack in the Box, and other fast food restaurants. We have upscale burger joints like Fuddrucker’s. We might have local establishments as well. Each prepares their food differently, uses different condiments, and might even bake their own buns. In other words, each tries to do something different to differentiate themselves. If they didn’t—if their burgers were exactly the same—the price they charge would become the only difference, and consumers would make their choice solely on price.

But the fact that they offer something different adds another element to our choice. When choosing where to get a hamburger, we have other considerations, such as the flavor of the meat or the sides offered or the condiments used or the entire dining experience. We are willing to pay more for a burger at Fuddrucker’s than a burger at McDonald’s. And we expect more in exchange.

The same principle holds true of painting contractors and the prices we charge. If the paint job we offer looks just like the job offered by our competitors, price does become the deciding factor. If our company looks just like everyone else, then price is most important.

Now, you might think that this sounds good in theory, but the fact remains that your market simply won’t bear higher prices. But how do you know? Do you believe this simply because that is what others have told you? Have you truly tried to differentiate your company? Have you tried to become the Fuddrucker’s or are you stuck in McDonald’s mode?

The truth is, if you regard the theory as good, then you must put it into practice. A good theory leads to good results.