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Customer Benefits

If you are finding it hard to raise prices to a reasonable level to give yourself a reasonable income, then this may be of some help to you in planing future advertising campaigns.

Before any customer will hire your services there must be some sort of benefit that the customer will enjoy by employing you. This benefit can be several things, but the main benefit is not having to do the work themselves, in other words, they either can't do the work, don't want to do the work, or haven't got the machinery to carry out the work. So what they want is the freedom from pain of having to do the work themselves. The more pain relief they get from not having to do the work, the higher the benefit is.

High benefit low price offers will be snapped up by by people on low incomes that can't afford to pay a higher price. If the price is raised then the benefit they receive declines, so there has to be a balance between the benefit they receive and the price paid.

High Benefit high price offers have to be targeted to people that require the service, need the benefits of it, and can afford to pay the asking price. For example if a Brain Surgeon on £500,000 pa needed the freedom from doing gardening work he/she  would be happy to pay much more to have a good job done, then would someone on a low income.

So when you advertise your services it is best to stress the benefits the customer will get from your services and not the features you offer. The features of your service are secondary to the customer benefits.

Managing the price of your services depends on the market segment you are going to serve. If you are going to advertise your services to everybody that has a garden, you will need to offer high benefits with lowish prices. If you offer your services to a targeted segment of the population, you need to offer high benefits with a price that will suit that segment.

If your customers get a low benefit or even no benefit from your service, then they will more than likely cancel it.

If you decide to offer your services only to a higher paying segment of the local population, then your profits will be higher too.

 

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Replies

  • A bad advert:-

    If you have, or you have seen an advert or leaflet that lists all the features of a business such as:-

    Joe Blogs

     lawn mowing

    Hedge Trimming

    Borders

    Etc Etc, Phone xxxxxx

    You know what I mean, its just a list of (features) what they can do. This is a sterile advert because it has no emotion and no motivation, which an advert should have, and the better the emotion and motivation the more response you will get and the higher the price you will be able to charge.

    To obtain higher priced work you need to have good advertising in place, because its the advertising that makes the prospect more interested in your services at your prices, and not someone else's services at lower prices.

    A good advert will have a number of parts to it which will help to draw the prospect into the sales funnel. Having a great picture and headline are the main items but there are a number of other psychological secrets that can be applied that will increase the response.

    • PRO

      Joe Bloggs could say 

      Do you Value Your Time ?? 

      Joe Blogg's 

      Garden Management 

      For Lifestyle Assistance 

      Tel .......... 

      It may attract a certain type of client and perhaps Joe could carve a niche for himself charging premium rates depending on where he is based but others may see it as pretentious .

      Personally I tend to take a more down to earth view on garden advertising calling a spade a spade , multi tasking , stoic. reliable and honest .advertising  lawns ,hedge cutting etc is offering a solution to the problem of a neglected garden ,  The potential client may be time poor , physically unable , or bone idle , different income brackets but still demand value for money but some demand more attention to detail e.g some can live with moss in the lawn others demand a lawn maintenance programme i see the benefit as having the experience to supply that customers need and charge accordingly . 

  • PRO

    Most global car manufacturers are sub 5% margin

    • PRO
      Really? I've just looked this up as I thought that way way too low!
      Seems to be between 12 and low 20s %?
      • Some cars will have low margins, but some cars like Land Rover and RR will have much higher margins because they sell to a higher income group.

    • There is a big difference between the service industry and manufacturing.

      In Manufacturing the margins can be lower because they are producing on mass, and it also depends if the product is a commodity, up market bling, or some high tech gadget.

  • PRO

    you can not compare agricultruel rates to ground maintenance work it is a completely different work 

    how many of you are putting 1500 hours a year on there machines and expect a life span for that machine of 10000 hours plus 

    • PRO
      I'll agree to disagree there. But that's not the point it was just a comparison.
      You really can't expect to see a return of £1120 a day on a £10k machine
  • PRO

    My objection to your argument Adrian is that is too simplistic - to say higher pay segment = more profits may be true for some at a customer level, but not all. And certainly not true for all at a company level.

    Think Ryan Air, Lidl, Aldi, the various Pound shops etc. These are all based on low cost, low margins, high volume. I also know of several lawn care companies that take a similar approach and do well out of it.

    It all depends on what market segment you are going for, and structuring your offering appropriately. We tend to offer a broad set of quality services that we bespoke to each customer, so we have quite a high cost base, so we do need to go for higher margin customers willing to pay for extra service and quality. There are others whom don't want, or can't afford such levels, and there are perfectly successfull businesses servcing their needs.

  • PRO

    I will chuck my two pence worth in here having been in sales for twenty years before finding paradise( self employed gardening).

    What is being discussed is the sales loop. So you attract customers with an attractive offer this is the features of your product i.e what you do. Now they dont buy what you do they buy the benefits to them so e.g I cut your grass ( feature ) you can go down the pub on a saturday ( benefits), when selling gardening or any service try not say we do this and rhyme off a list. Instead tell them what it will do for them.

    Price is only one objection which can be overcome by re enforcing the benefit to the customer.
    It has been shown that you can over come about five objections and still win the sale. And the biggest point at which someone loses sales is simply asking for the business.

    The best way is not , are you happy with that, or is it ok if I do that assume the result with lines like ,i do that on that on monday, I will go ahead with that then good then, I will get that done for you, price is not a total barrier to a sale there are lots of factors involved in someone buying a product otherwise we would all be buying savers brand food and no brand jeans from Tesco

    Hope that makes sense

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