Turf Magazine - July, 2014

DEPARTMENTS

Unfinished Business: Who Wins With the Lowest Price ... Really?

By Nicole Wisniewski

It's that time of year again: summer. Despite the late start to the season in the the Midwest and Northeast, in particular, as well as the drought in regions of the West, landscape businesses are in full operation.

And I've seen this quite visibly myself. There appears to be an even larger array this year of what seem to by fly-by-night landscape maintenance operations, with their unmarked and generic trailers, shirtless workers, hodgepodge mix of well-worn and dirty equipment driving around my neighborhood.

I hate to pick on them. Everybody has to get their start somewhere, but one can't deny their behavior casts a shadow on the industry when it comes to elevating its professional image. As easy as it is to assemble the reasonably priced pieces of essential equipment, and truck and trailer to transport it in, shouldn't it be just as simple to wear a logoed shirt, decal the truck, clean the equipment and present a specialized image?

As I see the barrage of trucks and trailers continually pass me on the highway or roads around my home, I wonder how content these small business owners are just occupying what seems to be the mediocre middle ground.

This is an area that S. Anthony Iannarino, managing director of B2B sales coaching and consultancy and adjunct faculty member at Capital University's School of Management and Leadership, calls the spot between two real business strategies. "The first strategy is lowest price, or transactional," he says on http://TheSalesBlog.com. "To operate this strategy you have to drive costs out of the business. These businesses focus on the efficiency of the transaction with the buyer. They make things fast and cheap. They don't worry about being better.

"The second strategy is caring, or consultative," Iannarino continues. "It's the polar opposite of the first strategy. To operate this strategy, you can't drive costs out of the business; this strategy requires a greater investment in time, energy and resources. You might be better and faster, but you can't be cheaper. Being cheap destroys the strategy. Your clients have to care about whatever it is you sell enough to pay more to obtain it."

We could argue that most beginner fly-by-night operations are operating using a transactional strategy, while the more polished companies that have found their niches in various regions and are using unique selling propositions and dedicating time and capital in becoming companies that can charge premiums for their services are operating as more consultative businesses.

But what about the middle ground? This is what Iannarino calls a dangerous place for a small business to be.

"In the middle, you might be a little better than the low-price competitors, but you're not 'better' enough to make you worth paying more to obtain," he explains. "This is how you lose to lower-priced competitors. The gravitational pull here is to compete on price, and by doing so, giving up what makes you a little better.

"You might be a little faster and a little cheaper than the higher-priced, caring consultative competitors, but not enough to make it worth saving a few bucks to miss out on the better outcomes they produce," he continues. "It's difficult to be better. You have to try harder."

And what do your customers want? Put yourself in their shoes. Would you buy what you are trying to sell them at the price you're trying to sell it for?

"If you were your buyer, would you trust the advice you were giving them?" Iannarino asks. "Would you believe that the person selling has the business acumen and situational knowledge to know what the best course of action is? Would you believe that they are a subject matter expert with advice worth taking? Would you be 100 percent confident that you have the right partner in front of you?"

Sure, it's tougher to sell 'better' in a world that is increasingly transactional," he adds "You have to spend your time with people who value 'better' enough to pay for it."

But what's the alternative? Does anyone ever really win the race when competing for lowest price?

Nicole Wisniewski is a 15-year green industry and a senior project manager in The Davey Tree Expert Co.'s marketing/corporate communications department. Comment on this article or contact her at nwisniewski@neo.rr.com.