The Mysteries of (Not) Delivering Value
WARNING: I'm having a rant today... that's what happens when I put on my 'customer' cap instead of my coaching cap... luckily dear readers, it doesn't happen too often! There's some valuable lessons in here for us all :)
In conversation with a real estate agent he mentioned they charge $990 + GST to upload a property for sale to 14 websites and put a sign out the front. This was their cheapest advertising package for selling a home.
I have an extensive marketing background and a pretty good working knowledge of marketing on the internet. When I expressed my astonishment at the lack of value, all the fellow could say in response was “I’m the principal, this is our cheapest advertising package”. It seems his job title was supposed to make this lack of value acceptable?
He then proceeded to stutter and stammer that writing the copy takes him 2 – 3 hours… I know amazing copywriters who could get it sorted in less than an hour for a grand investment of around $80. So what exactly are his clients paying for? Someone to sell their home, or an incredibly expensive copywriter??
Big hint to business owners – you should never be doing work that you could outsource for way less than what you could be earning. You need to spend your time doing what you are best at! If this guy spent those 2 – 3 hours getting new listings or selling properties his business would be infinitely more profitable.
Then there is the question of the 14 websites – at roughly 10 minutes each for uploading pictures and copy that’s just over 2 hours for an admin person – say $40/hr. Of course, this also assumes it is of value to use those 14 sites. Most real estate traffic goes through just a couple of main sites – those 14 sites are really awesome for his search engine optimization though! And how wonderful that his clients pay for him to be “#1 on realestate.com.au” as he proudly informed me. Sounds very impressive… unless you understand what it really means!
Unfortunately, your brand being #1 won’t sell my house. Most people search by suburb not agent. Do you not understand your business or do you think your customers are stupid? Either way that’s not a great value proposition for building a strong business in an industry that is facing tough times.
And lastly there’s the sign for about $150… In total, even my best estimates for marketing costs don’t get much past $350 if the agent is operating efficiently! So at $990+ that is some profit margin. Given the extortionate price of housing in our fair country, real estate agents also receive a very generous commission on sales as well. I know a lot of business owners who would love margins like that!
Now at this point some of you are going ‘what’s wrong with that?’ Isn’t the point of business to make money? Yes! Absolutely! But not in a way that offers no value to your customers or pretty much assumes they are stupid. The playing field is levelling AND becoming more transparent. Your business practices need to evolve!
When both you and the customer are satisfied with the deal you will build relationships that will create referrals, repeat business and ultimately business growth – you’ll be irresistible and desirable and you won’t need to charge for something that should be included in the service! Imagine if that agent had said “we have a basic marketing package that is included free if we sell your house.” That would have been much more attractive to a prospective seller than what he actually said: “If the client doesn’t pay for marketing up front the price for this service goes up to $1290 + GST.” WOW! Knock me out… not even banks are getting interest rates like that! I’m surprised he’s not receiving daily takeover bids!
The reality is if you are not delivering genuine value which is valued by your customers, you’re going to find you are facing more and more resistance. The era of greed is good is over. People are saving and considering their purchases much more carefully than ever before.
By the end of the conversation the real estate agent was half-heartedly suggesting he could negotiate on the marketing costs. Unfortunately, from a client perspective, the preceding conversation had already cost him the listing. He failed to see that selling is no longer about money – it is all about value. I am unclear as to whether this agent just doesn't get it or his BS sales pitch works on enough people to get by. What you need to understand is that if you come across customers who see through your BS sales pitch, you look stupid and you are damaging the reputation of your business.
Most of us are no longer interested in working with people who either don’t know what they are doing or think its fine to overcharge. We, as customers, have choice. More and more business owners are creating true value for their clients. Those businesses are building a solid platform for growth. And therein lie the lessons for us all.
The New Energies of Business are here. It is just not good business to overcharge your customers. It’s time to start thinking about where you are not providing value in your business? Where you are not efficient and need to find more effective approaches? Where you are not valuing your customers? And where is what you are offering not even relevant to the value they are looking for?
What can you change? Where there is a lack of value there is always a way to take advantage of that in the market. Look at where customers are pushing back about price and develop value propositions that create new paradigms and standards in your industry. When you take a leadership position in creating and providing value, your competition becomes irrelevant! (And if you don’t know what your customers are saying about your pricing, it’s time to get amongst it and talk to them!)
If you are going to have a successful business as we move forward into the new energies, now is the time to put your new platforms in place.
Would you like to join us at our regular New Energies of Business events? On August 29 at Peregian Beach we'll be discussing how to create value, how the energy of contribution plays out in business and how loving your work creates profits... if you can't be there you can order the videos. Our presenters and facilitators are experienced business people who are already living the new energies and know what it takes to transform business. How does it get better than that?
What are you seeing with your business and the value it offers? What value have you experienced in other businesses lately? Comment below!!