PRICE IS IRRELEVANT

If the first question a client or prospective client asks about is related to price, then we know that their values are centered around cost. Most attempts to sell them otherwise will not typically work. To this purchaser, value is based on low price, and the product or service is viewed as a commodity. If the client-buyer is interested in what we’ve got, and we aren’t the low price, they may ask us to justify ourselves. I got this question last week “Why are you double the other price? Can you explain why your price is so high?” (This is a downward spiral by the way. Don’t answer the question to try to validate.)

I provided a polite and professional response, but didn’t answer the question exactly. I indicated what value was being provided and how the fee compared to other service-company fees in our category. My response asked the opposite question back, “Why is their price half of ours. What are they so cheap? We are both looking at the same project, right?” Then I explained what was being provided and nothing more.

I didn’t hear back from that client yet. And there’s a good chance that I won’t. They will likely purchase the other provider’s services. Because what this client was really SAYING, not asking, was “Hey, you’re too expensive. I can get the same thing for 40% less.”

So why do I say that price is irrelevant? Because we buy based on our values. Price is the consequence, the manifestation. It’s not the issue. Price or cost-based buying says “any of these firms will do, just get me low price.” The problem with this is that the buyer is assuming that they are getting the identical service from any of the choices presented to them.

It’s never really about price. It’s about the buying mindset and values.

Cost-based buyers want low price. Cost leads the conversation.

Value-based buyers want what they perceive to be the best investment and value for the cost of the purchase. Value and investment leads the conversation, price falls out, sometimes negotiated, sometimes as stated.

Identity, connection, or brand-based buyers, want to identify with a particular person, enterprise, brand or genre. Being connected to the associated values leads the conversation. Price is what it is; “If you want to be connected with us, the fees associated with that are as defined.”

Price is important, but price is really irrelevant. People already know about what they are willing to pay based on their mindset.

What kind of buyer are we seeking to attract?

What values are we seeking to communicate?

How is that portrayed in our brand?

Are we delivering?

Whatever we choose, we need to stick to it and dive deep. Pick a lane and stay in it. We can’t be all things to all people.

Compressed construction 

I mean REALLY compressed. Rarely works.

There are many brilliantly crafted plans on paper that have no allowance for the unexpected, for supply chain issues, for unintended consequences, or poor execution by someone or some organization along the way. Plus the single biggest issue I’ve seen and experienced over and over again that leads to challenges from the outset, is simply delayed decision making, and delayed release of contracts.

Compressed construction requires concurrent, collaborative, (shared-reality) communication; cultural alignment, confidence in each other and in the enterprises involved, and it requires everyone to follow through on the decisions and tasks in their domain within the proper timelines. It can’t be done with the old “throwing it over the wall mentality.” Each decision and event is not “someone else’s problem.” It’s everyone’s problem. This teamwork is difficult to achieve and it requires commitment from all parties, and to be led by the GC or CM.

The thing that happens most often in compressed construction schedules is erosion of relationship, poor profitability, and a project that still takes the time “it needs” to take to get finished. This often results in an unhappy owner asking questions due to failed expectations vs. promised goals and deliverables.

I’ll offer some solutions and suggestions on a future blog.

Shared Reality

Track with me on this…

My business or domain, my reality

Your business or domain, your reality

Our mutual (together) business (work), our “shared” reality

Businesses working together (B2B) need to work in a SHARED REALITY space

If everything is done on one or the others terms, then there’s a one-sided reality. That can create tension, or worse, set up an opportunity for failure.

This has a strong impact on the working relationship

That’s why CONTRACTS MATTER.

We want to drive toward as mutual of a space as we possibly can, and it should be represented in the contract terms and conditions

As much as possible, we should seek agreements that set up for a win-win scenario.

I am to provide the client value in accordance with certain defined terms and deliverables or products. The client provides me with reasonable terms and conditions for value received

And if there’s a relationship, this should be easy. If there’s value expressed, it should be easy.

The shared reality space, the space in the overlapping circles, the closing of the gap, the intersection of the lines, that’s the space to seek. In that space lies the best opportunity for success. There’s potential for the stuff of greatness in that space.