Sticker Shock

A couple of weekends ago, I got that unpleasant surprise of no hot water. That’s not nearly as bad as no water, but when you’re looking forward to a hot shower, it’s still a big letdown. After two or so hours of trying to resolve it myself, it was clear that it was time to call in a professional, in this case the company that had installed the product less water heaterthan three years ago. The good news was that everything would still be under warranty.

More good news – right there on the side of my non-working water heater was the installing company’s 24-hour service dispatch number (or so I thought). My call was answered promptly and we set up a service call for the next morning.

There was one minor point of contention: she couldn’t find any record of her company installing the unit. But no problem; as long as I had my paperwork from the installation showing that they had indeed installed it, everything would be covered. I assured her that I did and I even knew exactly where it was filed. She did give me a stern reminder that if it turned out that someone else had installed the product, there would be a significant non-refundable service charge (think Sunday morning) and of course, no warranty coverage.

I never gave it a second thought until later that evening when I grabbed the paperwork out of the file. To my astonishment, the business name on the paperwork didn’t match the company that I had been talking with on the phone! By now, you have probably figured out what happened. Earlier in the year, the plumbing contractor that I’d been on the phone with had been out to repair a broken outside faucet. But while their technician was here, he had slapped his company’s business sticker on the side of my water heater over the sticker of the contractor that had actually installed it. Once I figured this out, I quickly cancelled the one service call and rescheduled with the installing contractor.

Here’s an example where a good business practice was overdone. From both a contractor and consumer perspective, business stickers are great. They’re a convenient and inexpensive way for the homeowner to know who to call if there’s an issue. But this contractor got overzealous with it and almost led me down the wrong path as a result. He ended up coming off as unprofessional. And come to think of it, I better go see whose stickers are on the HVAC unit and water softener. If they belong to him, they’re coming off.

No stone unturned

photoI’ve talked about differentiating your business before (Why you?) – that is, how does your business stand out from your competition and deliver a higher level of product and service?  Here’s another simple, but great example of a business doing exactly that.

The pizza business is very competitive. Just think of the number of pizza restaurants in your neighborhood. And although some might argue, pizza is pizza. So, how does one pizza business differentiate itself from all the others in such a commoditized market?

Enter this pizza restaurant (EOC stands for East of Chicago) located in an area that, as you may have guessed, is heavily agricultural. The last few weeks have been planting season, which mean long days in the fields for the farmers and their crews. Those guys get hungry, but don’t have time to go into town for lunch or dinner.

This pizza business has identified that unmet need and offered a solution. By offering “delivery to your tractor”, they’ve not only differentiated themselves, but expanded their customer base. If the sign simply said “WE DELIVER”, it probably never would have occurred to these customers that they could have fresh pizza for lunch, instead of the usual alternative of brown-bagging it.

Think of this example in terms of your water systems business. Are there opportunities and ways of reaching customers right under your nose that you haven’t thought of?

By the way, do you know what the other side of that sign says? “WE ALSO DELIVER TO THE BALLPARK”.

The 4-step program

When it comes to marketing strategy, any marketing course beyond high school will break it down into four parts: segmenting, targeting, positioning, and the value proposition. Does any of this apply to your water systems business, or is it just academic jargon? I think it applies, and here’s why.

Let’s start with segmenting. My version of this is “a customer is not just any customer”. You probably do this all the time. You know intuitively that the water system needs of an expensive lake home are different from those of farming operations which are still different from those of a municipality.

Segmenting leads to targeting, which is simply identifying which of these segments you feel are the most profitable and make the most sense for your business. As a water systems contractor, you may decide to target everybody that needs water, or just certain segments, such as agriculture.

Once you’ve identified your target market, the strategy moves to positioning. This answers the question, “Where do my products and services fit versus the competition?” Are you the low-cost leader? Are you the expert on variable-speed constant pressure products? Or, is your company somewhat of a generalist, providing a variety of water services?

Finally, after you’ve segmented your potential customers, targeted which ones you’re going after, and decided how you’re going to position your business within that target market comes the value proposition, also sometimes called the unique selling proposition. A couple of fancy names, but this is the meat of a marketing strategy and the essence of your business. It’s also the hardest part. Your value proposition encompasses your advertising, your brand, your competitive advantage, how you do business, and even your logo. It says, “Here’s why you should buy from me.” The list of choices can be long: I am the most convenient (24 hour service); I am the most experienced and reputable; and I am the most affordable, are just a few examples.

The reason the value proposition is so important is that the alternative is to try to be all things to all people. That rarely works because it just confuses the customer. What makes finding the right value proposition difficult is that it has to match the capabilities of your business to what will resonate with your target market. For example, if it doesn’t make financial sense for your business to be the low-cost leader (and it rarely does), you shouldn’t go there.

As a water systems contractor and business owner, you’re probably already going through this exercise, maybe even unconsciously. Nevertheless, you’ll never regret taking a step back from time to time to think the steps through. You just might find a better (and more profitable) value proposition.

Why you?

Unless it’s selling a pure commodity, every successful business has figured out a way to differentiate itself from its competition. That is, it has answered the question of, “how is my product or service different and therefore better, than everyone else’s and here’s why should you buy from me.” Much of the time, a business’s differentiation strategy is very direct: Wal-Mart differentiates itself with low prices and that’s about it. In other cases, the differentiation is more subtle: “Chevy Runs Deep” is meant to invoke a sense of history and tradition versus its competition. 

Here’s an excellent example of differentiation close to our industry. This plumbing business has established itself as the expert (see last week’s post, Be the expert) on older homes. Now, my guess is that most experienced plumbing contractors can handle the challenges of an older home just fine. But, as a consumer, I may not know that. What makes this tactic even more effective is that this contractor is not located in a newly constructed suburb, but in an area where there are many older, classic homes. He’s matching his marketing to the market. As a consumer, if I need a plumbing contractor and I have an older home, I’d better call them. After all, I need an expert, not just any plumber. 

As a water systems contractor, how are you differentiating yourself from your competition? The list of ways to do it is long. But, as a business owner, if you don’t, you’re just like everyone else.

We’re not selling pumps

Pay attention to any commercial or look at any advertisement, and you can quickly discern what they are really selling. You also quickly realize that hardly anyone is actually trying to sell that product itself. They are really selling something else, and their product is the way to get it. Examples are countless:

  • Cadillac doesn’t sell cars or even transportation. They sell luxury and prestige.
  • Most fitness clubs don’t sell any kind of strenuous exercise. They sell “how good you’re going to look if you just come in and join.”
  • Dentists don’t sell cleaning or tooth restoration. They sell smiles.
  • McDonald’s doesn’t sell food. They sell fuel to get you through your day.
  • 7-Eleven stores don’t sell soft drinks or candy bars or cans of motor oil. They sell convenience and location.
  • Infomercials sell how much better your life is going to be if you would just pick up that phone and order this product.
  • And finally, Apple doesn’t sell devices. They sell “up-to-date and cool.”

The list is endless, and it’s a great starting point to help us think about our own industry in these terms. What does our industry sell? What is our real product?

We sell something very real and tangible and needed, but it’s not pumps or pressure tanks or even the drilling service itself. Very simply, we provide water. People count on us for the reliable delivery of water to their homes, farms, schools, and businesses. They count on us every time they turn on a tap, take a shower, water their lawns, cool their machinery, and wash down their work surfaces. And we give it to them, using the highest quality products, with expert installation and maintenance. Our industry doesn’t sell pumps. We provide much, much more.

Next time you’re in front of your customer, don’t forget what you’re really selling.

Set yourself apart

There’s a lot of talk in our industry about becoming certified, and there are lots of different options: state certifications, sales certifications, industry certifications, even company certifications. While some of these may be necessary for doing business in a particular area, most are optional. With all you’ve got to juggle in your business, why bother with all this certification ballyhoo? Can it really make a difference?

I think it can. 

As a groundwater contractor, you do work that most people don’t think about. The general public doesn’t have an understanding of what you do from day to day, or what makes you good at it. In fact, most people probably don’t care until they’re out of water and need a service call. At that point, they probably head to the Yellow Pages and start dialing.

If you’ve got certification credentials, advertise them. Put them in your Yellow Pages listing. Have them printed on your business cards. Emblazon them on your service vehicles. Why? Because they make you different from everyone else; they help you stand out among your competitors. If the general public doesn’t know much about the water systems business, any additional information you give them to help make a decision about whom to call will be much appreciated. Continue reading