You’ve heard the phrase “in your own backyard” attached to many things. The point generally being made: your don’t have to look very far for the answer.
Ha! This happened to me yesterday literally IN MY OWN BACKYARD!
The question: How to generate sales in a climate of cost-cutting?
The answer: unbundle your services to lower the perceived cost.
The teacher: Tom, our ex-pool guy turned re-hired pool guy.
The student: me.
The background: About 24 months ago I start writing about “the coming slowdown,” warning business owners and talking about what to do. About 18 months ago we (my firm) slowed down. So we took our own advice and cut some expenses: conferences I like to attend; we shopped our car insurance (saved about a grand a year, by the way); and, it pains me to report, let our pool guy Tom go. We also invested in other areas, but that’s another post. Tom charged us $115 a month to come once a week to clean and add chemicals (he supplied the chemicals). I called Tom a few days ago because our filter needed its annual service, to see if he’d do it for us. He agreed.
He serviced the filter and we were catching up when he simply said, “You know, if you want to supply the chemicals I can put you back on service for $85 a month.” That’s all I needed to hear and Tom is once again our pool guy, I am relieved I can stop doing a lousy job cleaning our pool and my pool is most certainly rejoicing.
Tom unbundled the cost of the chemicals from his price, putting him back into the category of “things we can afford.” The reality is under this new arrangement we will likely end up spending about the same for chemicals and cleaning, but our PERCEPTION is that now Tom is more affordable. And that’s all that matters in this transaction, or any transaction.
How can you unbundle? And please understand, unbundling is different than discounting. I’m not a big fan of discounting. When you unbundle you change your product or service; you strip something out or break it into smaller pieces to lower the price.
Another take on this same concept: re-configure your product or service. Again, not a discount. A different product or service. And sometimes it’s little more than changing how you think about your product or service. Two examples:
A client of mine specializes in 2-day in-house business writing seminars. He’s very good, charges $7,500 for the two days, is working with some of the largest companies in the world and, unfortunately, is experiencing a slow down. We’re helping him rethink how he can make an impact for his clients in one day. Not put his 2-day seminar into one day, but how he can deliver value in one day. Our hope is he can create value for his clients, save them money and very possibly raise his daily fee.
For most of my career the first thing clients have generally hired me to do is create a marketing plan. And then I typically stick around to implement our recommendations on a monthly business. Simply put, clients have generally entered into relatively substantial, formalized relationships with me. As traffic to my site has grown I’ve started hearing from more and more people who don’t want and often can’t afford the larger relationships. Now, a $500 retainer gets us working together tomorrow. I’m doing smaller projects, mainly giving advice, for more clients. I’m making a difference, my clients are happy and getting problems solved quickly and inexpensively and I’m very likely more profitable on an hourly basis.
In closing, I’ll ask it again: how can you unbundle, how can you rethink your product or service so as to be perceived as more affordable?