EPISODE 29 – The Customer’s Perception of Value
Hey folks. Welcome to another episode of Builders Business Success Podcast!
The purpose of this podcast, this is the first time you’ve heard it or seen it is to really address the building industry norms that create a whole lot of frustration, cost money, costs time, inconvenience and we just wanna make building more fun, more enjoyable and get rid of these unnecessary pain points that are generally come about because of, as I said, the building industry norms but the processes and approaches that just seem to have been around for ages.
And with Builders Business Blackbelt, we’re always trying to address something that has been around for ages, coming out with a new approach, applying it almost like a laboratory in this group of Builders and Builders Business Blackbelt, getting feedback and refining it to make sure it works.
And that’s the sort of stuff that we’re talking about and sharing with you in this podcast.
So, today I’m gonna be talking about the single biggest mistake nearly all builders make and it costs a ton of money, stress, and time.
So, I’m gonna be unpacking that so you can hopefully implement these ideas into your business straight away and start to see the benefit.
Also, a question that we got sent to us just this week gonna be addressing that question in our Q&A section. And again gonna give you a personal productivity hack and the old business saying was “the fish rots from the head.”
And so what that fundamentally means is when you start to give a better example to your team, when you start to feel better, when you start to perform better, when you start to implement these sorts of personal productivity hacks, what you might find is that other members of your team will start to do a bit of the monkey, see monkey, do business and start to follow your example.
And it can be absolutely profound. And the more people that you influence or the more people you have around you to influence, the more impactful this can be.
I remember a number of years ago, a builder… Building organization in Melbourne joined Blackbelt.
In fact, it was before it was Blackbelt, and after it was a roundabout four months or so they had actually reduced their workforce by around about a third, just about 30-something percent, and doubled as a team, their productivity, and that was because the two leaders of the organization took these ideas these personal productivity hacks, put them into place, and started to show enthusiasm and encourage the other team members to use them as well.
And there’s so much potential, there’s so much productivity you can find in your existing tank ’cause I get that question a lot as well, you know.
How do you hire people? Where do you find right people?
Quite often, you don’t need new people because you haven’t got the full potential out of the team that you’ve got now. So, pay particular attention to these personal productivity hacks. So let’s get on with it.
*Transcription of the show*
As I said, I’m going to be covering what I believe to be the single biggest mistake that nearly all builders make. And what is that big mistake?
That big mistake is… Most builders I speak to believe that everyone decides on price.
Everybody is price-driven. Everybody is price focused.
That means that most building businesses are set up to meet that market focus.
My overarching opinion on this, and it’s not just an opinion based on an opinion, it’s based on having working…
Having worked with builders who have done it that way, to completely changing their mind set, shifting their mind, to hardly-anybody-decides-on-price and their business and their experience, their profitability, levels of enjoyment, everything shifts.
So I wanna address this and unpack it for you. But right up front I wanna state that I’m not encouraging anybody to rip off their clients by putting up prices and so forth. I’m just encouraging you to build your business, so you really, really deliver maximum value for your clients, but also retain the right to have a profitable business. I believe that all businesses have the right to become profitable.
This is what annoys me about the whole free-quote scenario is that, you know, the building industry has educated people to not trust builders and not trust tradespeople.
And that creates this focus on price because in the absence of value, humans, default to price.
And if you’re always focused on price, rather on delivering value then really the only thing that can be cut, I mean, ’cause you can do substandard work, which I’m sure you don’t choose to do.
You can hire substandard labor, which I’m sure you don’t choose to do.
You can cut corners, which I’m sure you don’t choose to do.
So, the only thing left to be able to become price-competitive is to cut into your own profit. And that means that if you’re “competitive” in the building industry, you can’t be profitable if you’re going to use that model.
But I believe that every business has the right to be profitable. It’s just like if you’re an employee, it’s not appropriate for the boss just to say, “you know, I’m not doing so well at the moment or I want this level of profit, that means I need you to come in and work for three or four days for free.” I mean, people would be up in arms.
If you asked people to do that, yet, you’re being asked to come in and fundamentally donate your time, your experience, your intellectual property, your knowledge, for nothing. You have the right to be profitable and you can be profitable.
We prove it every day in our laboratory with Builders Business Blackbelt, our members give us this feedback every day.
They’re profitable, they’re significantly more profitable than what they were when they were just using the standard guided variety approach to running their building business. They’re far more profitable.
But the other thing that we get feedback at the same time is that the customers appreciate what they do far more.
So there is a way of doing this. Statistically, it’s been proven that 80% of the people, of the marketplace are more focused on value, getting value through a transaction than they are getting a cheaper price.
And there’s been some crazy, bizarre experiments done in relation to that.
For instance, the one that I really think is just… Is funny, it’s bizarre, it’s crazy, but it proves the point.
You can get a crate of fruit and put it in the supermarket. And it’s exactly the same fruit. You know, it’s the same…
A lot of oranges from the same orchard, same grade, all of that sort of stuff. And you just put one crate to be a higher price than the other, so you… they’re exactly the same product, you don’t say anything about that this is better than that or comes from a different place, nothing, they just side by side and one is more expensive than the other. In the big majority of those experiments guess which one empties first? Which one sells the most quickly?
It’s always the most expensive and that is because we have a suspicion that the more expensive one is better quality. But there’s a ton of evidence out there that proves that the majority of people much, much prefer getting more value for a higher price.
Like they’ll choose the option that might be higher priced but they perceive a ton more value, and that is the art, that’s the secret, with your building the communication, the procedures and systems in your business.
So it communicates high levels of value from your ideal client’s perspective. And as I said in the beginning that yes, you will get this price competitiveness but it generally shows up because that is how you are presenting yourself.
You might put forward that we are you know, we’re price competitive or we’ll beat their price or whatever be, you start talking about price or your mindset is focused on price when you first start to talk to a client, versus talking to them about what they’re after, what they’re afraid of, what they’re frustrated with, what they feel they need, what they feel they need to avoid.
And just showing an understanding of that and creating a connection and rapport with them.
So, the problem is that because most builders believe everybody makes decisions based on price, you set your business up assuming that everyone is focused on price.
But I just mentioned that there’s this, you know proof out there that 80% of the people… I actually personally believe that it’s significantly more, but there is evidence to support that 80% of people make decisions based on value, 20% on price.
So if, think about this, if you are…
If you believe this and your business structure and your mindset is set up to believe that everybody is making decisions based on price, that means that you’re setting your business up for that 20%, assuming that it’s 20%.
My suggestion is, and I wanna encourage you to set your business up to be attractive to the 80%, because remember 80%, and I believe it’s more, but 80% of people are looking for value, they’re not looking for a cheaper price.
They are looking for value. So set up your business so it is focused on delivering value not focused on being price competitive.
That’s you’ll hear it all of the time you know, this builders… Smaller businesses will say…
Builders will say that you know, I can’t compete with these large volumes builders. Well, what are you doing competing with them? Don’t compete.
The large volume builders are very average at delivering quality customer experience.
A Small, maneuverable, flexible building business can deliver awesome experience for the customer because it’s really intimate. You haven’t got 300 customers to deal with. You might have three or five or 10 or 15 customers in a year. That gives you the opportunity to really get to know them, build a relationship with them and ensure that you are delivering a quality experience.
That’s something that we spoke about on the last episode is what is your product? Is it the house at the end of the driveway? Or is it the quality of the customer experience? It’s absolutely the quality of the customer experience.
So set your business up to deliver that value. You’ve got to ask yourself the question, what do they want? And please don’t fall into the trap of thinking that you know, what they want, because if I were them, I’d want this. That is a trap.
I remember a number of years ago, well before our business was called Blackbelt… Builders Business Blackbelt, we would do these two days get-together.
We still do or we did do them before everything went crazy. And we’re hoping to do them again perhaps this year that’d be cool, but we all get together in a room for a couple of days. And one of the things that I wanted to do was to improve the program, to deliver significantly more value to our members. And I thought I’m going to do a survey.
And I wrote down all of the things that I thought would deliver more value to our members. And remember I knew them fairly intimately, but I hadn’t spoken to them about these particular topics. And I wrote down all of the things that I thought would deliver additional value.
And I gave everyone a copy of it and I said, “I just want you to write those things in order of what you believe would deliver you the most value, what would you enjoy, appreciate, get the most value from?”
And I had rated those things myself before I gave them. And long story short, I was a hundred percent wrong. Like I was 180 degrees wrong. I’ve done that a couple of times and most of the time I’m very, very wrong.
So I’ve learned the lesson to ask. Don’t assume that you know, what represents value.
So you’ve got to become a detective, with your prospects, you’ve got to become a detective and start to have questions and have ways of recording their answers and have developed skills to be able to get into a slightly deeper level of conversation.
And that can only happen when you build trust and have a connection and demonstrate that you really are interested in care about your prospect.
When you can do that, you can get these deeper levels of what they really want and help them get fundamentally more clear on what they really want. And that’s gonna save you a lot of time, save them a lot of time, of costs and a lot of frustration when you can do that.
So the value that you present to your prospects and your clients needs to be valuable from their perspective, not yours, so don’t fall into that trap. As I said, if you think that, you know, you’re most likely wrong, sometimes it’s even… it works out that if you go, “well, I think that would be value or whatever the opposite of that probably is the value.” But, you know, that’s only an idea.
Don’t use that as the rule of thumb, always be asking and checking in and getting confirmation of what their priorities are, what their concerns are, things like that. What often represents the most value to people, to humans, is the feeling of being understood.
What they want is someone that they can trust and someone who can become a trusted guide, that they…
What represents most value for most humans is just being listened to and being understood.
That feeling of being understood is super powerful.
And you’ll find that when you put that into your conversations and into your focus, into your purpose, when you’re having conversations with people, you will see, you will experience that people feel that you are the right person for them.
You can become their trusted guide. And if you think about it, if a customer comes to you and says, you know, “this is how much money we’ve got, this is what we’d like, but we really need you to guide us.
What should we do? Where should we go? How should we go about this?”
You know that if somebody came to you and asked you those questions you have the experience, the knowledge to be able to give them the best possible outcome for their money, but it very rarely happens because there’s this low trust factor.
So they are trying to get all of the information out of you so they can make the decisions and staying in control of what’s going on.
Whereas if you worked as a team, and you’ll learn how to understand what their fears, frustrations, wants and aspirations were, in other words, their concerns and their priorities, and they knew that you understood what they were, all of these barriers start to melt away and then we can start to work together as a team.
They can confidently communicate with complete openness and transparency what they have and what they want, and your skills and experience can help guide them to follow a process to get them the best possible outcome. You’ve got to procedurize this as well.
You’ve got to have a step-by-step process that shows how best to get the value for money and enjoy the process. It can’t be just left to a conversation.
You’ve got to be able to show proof, you’ve got to be able to show them the steps so they can see clearly a pathway that if they follow your process, they are going to get the best possible value they can for them investment, but more over because you are the trusted guide they gonna be able to enjoy the experience.
And if you can become that builder, that people talk about all the time, you become this remarkable business that people talk about, they will talk about their experience, they may even say, “it was more expensive than we expected to pay, it was more expensive than other builders, but it was so, so worth it.”
That’s the conversation that you wanna have going and if you can show people a step by step process with clarity, gives them certainty, they will open up and work with you as a team and you get the best outcome.
You always need to be asking questions to ensure that you understand their priorities and concerns.
Don’t assume that you understand. And don’t do it just once.
I think often people learn this and with the initial part of the process, initial conversations, the initial meetings, right up until the proposal presentation and signing the contracts and all that sort of stuff you’re on your best behavior, trying to be as caring and supportive as you possibly can.
And then when we’re on site and we’re starting to dig holes in the ground and what have you, the questioning stops.
We think we understand what the priorities are and now we just need to be left alone to build this thing.
What I would suggest to you is never, ever stop checking in. Are we, you know… How are you feeling right now? What are you liking about what’s going on? Is there any frustrations, are there any concerns?
And start regular open dialogue so your clients feel comfortable coming to you with a problem way before it becomes some insurmountable issue that causes friction and sales the whole process. Always be communicating. You cannot over-communicate.
I think maybe try to over-communicate and see how you go. And just on this whole issue of price, because I talk about this all the time and always get some people going, “Yeah, but you know, people don’t have unlimited budgets and all of that sort of stuff.” Yeah. I get that.
You know, there is a limit to what people can afford but, having a constant focus on price makes it very unenjoyable for everybody involved.
This leads to less value, not more.
Remember, the value is the quality of the experience and if you keep leading the focus back to price versus leading the focus back to value, and remember the thing that can represent the biggest value, the most value, the most powerful value is for your client to feel like that you understand them, and you are there to support them, that represents the most value.
Then price takes a second or third or fourth row seat over other priorities.
So stay away from price focus, please stop setting your business up as if everyone is price focused because they’re not, the big majority of your market are value focused.
So learn how to present value to your prospects and your clients and your business will transform. So I hope that’s helpful.
Q & A
Now, as I said in the intro going to answer a question that we just got asked this week. And it wasn’t just once. When you get people…
When we get people coming into Builders Business Success Forum, so that’s our closed Facebook group, with a whole bunch of really cool builders in it.
You can jump in there, ask questions, listening to the conversation, get involved in the conversation. We’re always posting conversation starters in there and other training and so forth in there.
So if you haven’t joined yet, get over to Builders Business Success Forum and jump in. When you jump in, there’s three questions you need to answer.
One is, what do you do? Another one is what’s your email address so we can send you out a really cool training that we did a little while ago. And the third one is what’s a problem that you’d like a hand with?
And a number of times this last week, a couple of different people wanting to join said I need help getting my name out there. And so I just wanted to address question because that’s what it is.
How do I get my name out there? Don’t. Don’t invest time trying to get your name out there because it takes a lot more time, energy, and effort for a small business to do awareness, ’cause that’s what that is.
Getting your name out there is fundamentally making people aware that you exist. The secret for success for a small business is changing the focus to activities that get their name in here.
So, instead of getting your name out there, you wanna get their name in here.
And what “in here” means is that you need to have some sort of a database, to be able to capture your potential prospects or suspects, names, and email addresses so you can communicate with them, not promotions and sales and all of that sort of palaver, but value.
And again, learning about your ideal prospect, and what represents value to them that needs to be the topics of your conversation.
So you need to be getting them into your customer relationship management software, or like offering them something to download or watch some video that you’ve done or there’s all sorts of ways you can do it, but you offer them something of value so they are willing to give you their email address, and then that goes into your customer relationship management software.
The one that we use, and a lot of our builders use it it’s very inexpensive and super powerful. It’s called ActiveCampaign.
You can get it to do all sorts of whizzbang things.
So, instead of putting effort, time, energy, money into brand awareness, like brand awareness really should come from your customers experience, the quality of your customers’ experience, that’s where it should come from.
But I wouldn’t suggest that you spend money on brand awareness, I would suggest that if you’re gonna spend any money, it needs to be on systems and processes that get their information into your database, so then you can start drip-feeding them out more value, more value, more value and by the way, when you’re drip-feeding this value out to them through email, and don’t discount the power of email these days, it’s still very, very powerful. That is brand awareness.
Even if they go “Joe Blogs Building,” an email from Joe Blogs Building and they don’t open it, maybe they open the first couple and they’re good, but they just don’t open it, but you’re sending, you know, one or two emails out a week, your name is in front of them.
And if they delete it fine, you’re not the builder for them anyway. But if they don’t delete it, if they don’t unsubscribe, they keep, that means that somewhere they think that you’ve got some value for them so they keep receiving your emails they might not read them, but that doesn’t matter. But the secret is getting them in here. And I talk about a customer relationship management software like ActiveCampaign purely because social media and other platforms change, and they’ve changed over the years and they can change again in the future.
We get into this situation where we think they’re gonna be around forever. And right now, it was on the news just this week that potentially, because of an issue with the Australian government and Facebook and Google paying for news, Facebook and Google are threatening to pull their services out of Australia. What if that happens?
What if your business was relying on Facebook ads or SEO, search engine optimization to develop leads through Google, and then that disappears. There will be other platforms to take their place but there was… There’s gonna be, you know, a transition.
There’s gonna be pain involved in this, but if you have your own database and your process of lead generation always leads back to that database, that is your safety net because what you can do is still communicate with your database of prospects, and when a new platform comes out that you wanna start to communicate to them on, you can make them aware through email all that sort of stuff but if your database is basically people in a Facebook group, like Builders Business Success Forum, and then Facebook disappears, your whole database has disappeared so you’ve gotta have your own database. Hope that makes sense.
Personal Productivity Hack
Okay. Productivity hack, time. Last time, it was just about using a tool. This time, it is some ideas on how to use the tool.
So this is only a short hack but it is super, super powerful. Fundamentally, the first thing you need to understand is productivity comes from how you feel emotionally.
I taught time management for a long, long time, that’s all I used to do 30 plus years ago, fly all around Australia, teaching thousands and thousands people time management stuff.
And I came to the realization it’s a whole lot of tools and techniques and so forth.
But the essence of effectiveness is managing your emotions, which fundamentally means that when you feel good, you do good. And when you do good, you feel good. And so if you can get in to that upward spiral of feeling good and doing good and feeling good and doing good, it improves.
The opposite is also true, so, when you don’t feel so good, you don’t do so good and when you don’t do so good, you don’t feel so good so you get on this negative spiral.
So, anything you can do to eliminate stress and pressure, and increase certainty, and control in your day means that you will become significantly more effective.
So, what I’d suggest in this productivity hack is consider what most people don’t. When you’re planning your day, so plan your day effectively. What that means is identify your time-bound engagements.
Tonight out appointments and meetings and things like that. Make sure you have a system to be able to track those, and know what they are next week and next month and tomorrow.
And when you’re building your plan for today and I really encourage everybody to build a new plan every day, the first thing you do is you look at what are my time-bound engagements, or appointments, and how long are they going to take? And let’s say, you’ve got three meetings today and they’re all going to be, let’s say an hour each, three hours.
And if you’re working for eight or let’s say you’re working for 10 hours, if you’ve already got three in the diary for meetings, it means that you’ve only got seven hours if you’re gonna do 10 hours today, left for all of the things on your to-do list.
And so it’s really important to understand how much discretionary time you’ve got so you don’t build a list that is far longer than the discretionary time you’ve got them.
From a psychological point of view what happens is that subconsciously, you know that you can’t get it done and you start to procrastinate, you start to get easily distracted.
Whereas if you build a list, that’s exactly the right size for the amount of time you’ve got available to do that stuff from a psychological point of view you’ll feel the sense of urgency.
You’ll be less distractible, if that is the word, I may have just invented a word but it’s gonna be harder to be distracted if you know, I only got this amount of time to do this, off you go.
You’ll be really focused. And so the other thing I mentioned is consider what most people don’t.
So I’ve said, you know, you’ve got your appointments and so forth, but what most people forget about, is traveling so forth.
You’ve got to take off all that into consideration.
So for instance, if I’m in the office and I’ve got an appointment in town, I’ll always wanna be 10 minutes early anyway, because being 10 minutes early I’ve found over the last 35 years has reduced a significant amount of stress and pressure.
When people are late, and if you don’t feel stress or pressure when you’re late, that’s fine for you but I’ll guarantee you’re still pissing off everybody else, so don’t be late. It’s better off being a few minutes early than being late at all.
So, plan to be early. I plan to be wherever I’m gonna be 10 minutes early, I’m renowned for it. But what I will also do is I’ll go, “okay, I need to be there at that time and that time is 10 minutes early. I’ll need to find a park. I’ll need to walk there, that’s another seven minutes, and it’s going to take me X amount of minutes to drive there.”
So I’ll add all of that up, and I work backwards so I have, this is what time I need to leave the office, rather than saying, I need to be over there at that time, and putting it in as an appointment, because nine times out of 10, when you do that, you’ll end up being late, because there’ll be some road blocks, you won’t be able to find a park.
You’ll leave your office a little bit late because you couldn’t get off the phone and what have you. You’ve gotta have that deadline as to when to leave to make sure you allow for all of the travel and everything like that.
You get there early. And Hey folks, if you get there early at least you’re gonna be relaxed, you’re gonna be sending a very professional perception out there.
People will think that you’re professional and well-organized, and if you’ve got some other stuff to do if you need to wait 10 minutes before you get into your appointment, will you get stuff done as well, and I’ll guarantee, because of what I learned over the last 35 years, when you feel good, you do good.
If you get there early and you feel in control, you’re getting rid of the stress, you’re getting rid of the pressure, you’re feeling in control, you’ve got that sense of certainty, you will be significantly more productive.
So I’d love any feedback at all on that productivity hack when you apply it into your day.
Takeaway & Jump On A Call
The takeaway for this podcast, I believe this, you need to look at the big picture, okay? Set up your business to take you where you want to go not where your business ends up taking you.
So if you have this mindset of everyone’s focused on price, your business is going to take you where it takes you.
Whereas if you believe that people are after value you can find out what the value is, you can build your business to deliver, represent and deliver that value, and you can decide where you want your business to take you.
If you’re better at this time management stuff like that personal productivity hack, you are in control.
You’ve got more certainty and a feeling of being in control rather than being pushed around by circumstances.
So you’ve gotta look at the big picture and build a plan as to where you wanna arrive, and then build a plan backwards to today, and work that plan every day.
Decide where you wanna arrive and figure out what the pathway is to get there and make sure they become your priorities on a daily basis.
So that’s it for this episode of Builders Business Success Podcast. I hope this was valuable, I’d love your feedback. I’d love your questions.
You can find us on Builders Business Blackbelt, Facebook page. You can certainly come to buildersbusinessblackbelt.com.au.
You can even jump on the website there, somewhere down in the corner, a little thing will pop up and you’ll be able to send a message to us. But if you’ve got any questions at all we’d love to answer them.
We’d love to have a conversation with you, and find out how we can help you. And if that is something you’d like to get to do, and please, if this…
If you’re hesitating at all because you think we’re going to sell you something, we’re not going to be selling you anything. We love having conversations with builders to find out what the current issues are, what the current problems are.
And if we can help, we will help. If we can’t, we’ll certainly point you in the right direction as best we can.
But if you want to ask any questions or see how we can help you with your business, anything we talk about in this podcast, in any of the other videos, all you need to do is book a call.
You can go to the website and there’s a big “schedule a call” button there. If you only watching, or if you’re watching this, there’s a button underneath the video, you can just click that, attach it to a form, fill it there, schedule a call, we’ll have a chat.
If you’re just listening to the audio only podcast all you need to do is navigate to buildersbusinessblackbelt.com.au and you’ll see on the website, there’s a “schedule a call” button there and just follow the same process.
So I hope this was valuable. And I’m looking forward already to speaking with you next time on another episode of Builders Business Success Podcast.
I’m Mick Hawes from Builders Business Blackbelt. That is it for this episode.
Bye for now.