Thursday, January 12, 2006

how to add value to your business

By Jordan Behan

Some companies have had tremendous success with adding value to their products and services. The language is a bit fuzzy here, so let me make this statement a little clearer: With the right marketing, some companies have been able to get away with charging WAY more for their product or service, by creating the illusion of value. Telling a good story, and getting a contingent of people to play along.

Case in point: Designer clothes. Sorry to disappoint, but Louis Vuitton doesn't hand-stitch those $800 purses himself. And here I go playing spoilers: The Porsche Cayenne and the Volkwagen Touraeg are practically the exact same car, with a difference in price of almost $40 K. How do they get away with it? Their customers believe the story they've been telling, and they'll pay the premium to be associated with that product. I'm guilty of this too so I'm not judging, just making a point; a point that has been made before, by Seth Godin and many others, no doubt.

But what if the margins in your business are locked down, either by law or an industry standard? A gas station would have very little success trying to justify doubling their price on fuel because their full serve gas jockeys are more efficient and thorough. And what about a realtor, who's commission has to be extremely consistent with the status quo; raising it would be career suicide, if he/she were the only one who did.

In the case of the realtor, only the number (and selling price!!) of the listings they get can differ, depending on one's positioning. So back to the question I asked in the headline for the post: How do you add value to something with a fixed cost in order to distance yourself from your competition? Answer: with service. With positioning. With terrific referrals from your past customers. (The backbone of most realtors' business)

"But Jordan," you say, "Whatever do you mean by service and positioning? And how can one guarantee that they've done the job well enough that an existing customer will tell ten friends?" (I've been waiting to use that in a post)

Well, I have an answer for that, too. If you don't already have the benefit of a reputation, build one. Recently I had this same discussion with a certain realtor who I know well, who is in this very predicament. He's seen some success, but he wants to keep the momentum and see even more success this year. It's January and times are slow, and he's smart enough to know that now's the time to start a great campaign, before his dance card is full again. (Gratuitous plug: If you live in the Vancouver/Lower Mainland area, and you're buying or selling...visit his site or his new blog and drop him a line)

He's already plugged into the various real estate listings, and distributes goodies like notepads, calendars, fridge magnets and the like. Now he's looking for "out of the box" ideas that other realtors haven't picked up on. So, some ideas I gave him:
  • Start a blog. Predictable, coming from me perhaps, but there is definitely value in the idea. Plus he might just be the first in this neighborhood to do it. He jots down a few stats about current market conditions, "how-to's" about listing and buying (and a lot of "what NOT to do's") and poof! He's an instant "expert." Who wouldn't want to list with the expert they've been reading about. (I've already started one for him, see it here)
  • Write a book. This sounds like a massive undertaking, but it doesn't have to be. My idea was to create a short but comprehensive e-book about how to stage your home when it's for sale, for open houses, etc. (Many realtor's he's encountered clearly don't take the time to share this insight with their customer's, so there is definitely a market there) Same as with the blog, an "author" of such a book is clearly heads and shoulders above the rest, and worthy of your business. It makes a nice gift when it's time to hand over the listing package to a new client as well.
  • Start a PR campaign. In Vancouver, real estate has been one of the hot topics, with prices soaring and record turnover of properties. It makes news all the time and realtors are the best sources to comment on the action. A regular press release sent to the neighborhood semi-weekly paper citing some unique statistics (the record number of townhouses sold in one neighborhood, for eg.) would likely be enough to warrant some free ink for the realtor who it came from.
  • Network. This one is obviously not an original idea, by any means. I told him before, that he would never have to worry if he could just get his business card into three brand new hands, everyday. He walked away from our meeting with some new ideas about crowds he can put himself in to accomplish that goal.
Okay, that about sums up my thoughts for the day...apologies for the fact that the post is so epic, but I wanted to get all of this out while it was still fresh. One thing that I wanted to point out: The ideas I shared here have low (some have NO) cost associated with them. The require a bit of time and preparation, but nothing more. And they are all concepts that might encourage people to help spread your message. At the risk of sounding like a broken record: Word of mouth is the best marketing there is, so work on telling a story with your business that will get people talking.

Hey, maybe they'll tell ten friends. (Wow I did it again!)

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