In the world of sales there is an inherent assumption that the easiest option is to provide the lowest cost option to your customer. This view often takes hold because of two related elements:
a) The customer will put up less resistance to a lower price point thereby making for a quicker and easier product sale for you and
b) You will almost certainly have a wider selection of commodity product in stock that you will be wanting to convert into cash at the earliest possible opportunity.
The downside, of course, is that your margin will be less than had you recommended a premium product. Ah, you might well argue, but selling premium products is a much harder and riskier proposition since the customer may become pickier or even go elsewhere if you don’t have it in stock today. On this basis it’s thought better to get the business on a smaller margin than not at all.
However, I’d argue that premium isn’t a dirty word and, deep down, is often exactly what the end user wants – even if they don’t yet know it themselves. This gives the seller a great opportunity to become their customers most trusted adviser and can frequently lead on to additional sales.
Frequently the only real barrier to a premium product sale is budget, but handily, there’s an open secret in the paving sector that can help brush aside those monetary objections.
Ask any paving contractor to break down the costs of installation, and they’ll usually invoke the 80/20 rule. That is to say, around 80% of the cost of any patio or driveway expense is incurred during the actual groundwork. The cost of the paving itself typically accounts for only 20% of the total bill.
Surely this gives even more reason not to skimp on quality and study the paving catalogues in a little more detail so as to guide your customers to the product which they really want – and which would best suit their project? The jump from a standard to premium product now looks significantly less daunting when viewed in the context of the 80/20 rule, because the overall project cost will scarcely rise at all, but the customer is getting a far better looking end product.
Similarly, for the contractor, maximising ‘kerb appeal’ will pay off in terms of customer satisfaction by helping them to stand out from their competition. This encourages them to continue promoting premium products to future customers and thereby bring even more business in to their preferred builders’ merchant.
We appreciate that some will still be sceptical about making such a big jump. That’s why many of our ranges are structured on a tiered system, offering up to four different price/quality bands – think of them as a series of steps along the lines of ‘good-better-best’ - rather than a single jump!
This gives you as a merchant, ample opportunity to discuss different options when promoting higher value options, and a great opportunity to make the most out of the 80/20 rule.
Andrew Gill is marketing manager at Brett Landscaping.