- Features | April 5, 2016
How to Provide Value
I have been hearing Ted Garrison's [construction consultant and contributing columnist for Insights] mantra for many years now that bringing value is the key to doing business. I have to agree with that premise one thousand times over. People want value for their investment. If something is of value, people are willing to pay for it. Granted, some of it is perceived value, but nonetheless, it is value to them.
Being a consultant and recruiter myself, I have a strong grasp of this concept. In the past, many contractors would call me and discuss how I could help them in their firms. I used to quote really large sums of money and, more often than not, I blew the prospect out of the water. Why do you think? The reason that I blew them out of the water was that I had not first established the value that I was bringing to the table. So, really, any amount of money seems high if you do not establish some value on the front end.
For example, let’s say that you are attracted to hiring a certain business developer who you think highly of in your marketplace. You interview them confidentially, and when you ask what salary they want they share $200,000 as a base salary. Most contracting firms would balk at that figure, and it would end the fantasy about the hire, right?
But, let’s say instead that the business developer laid out a simple and clear annual plan of how to bring $2 million in gross profits to your bottom line on top of what you are already doing. Would it be so arrogant to request 10% of that profit as a base salary and as a reward for the growth earned? It would not be arrogant. Now the $200,000 base salary looks fair and reasonable. After all, you will be a millionaire and your business will have some breathing room. It is only a matter of perceived value and its impact on you.
It is the same with your clients. It is necessary – and very important – to establish value on the front end of every relationship, transaction, and communication. This cannot be overstated.
Here are some ideas of how you can bring that value through ideas that have been tried and true in our industry.
SOLVE THEIR CHALLENGE
Regardless of what your product or service is, your client has a need for it and there has been challenges in their past with the fulfillment of it. Therefore, it behooves you to uncover what their true needs and business goals are. Once this has been uncovered, you can apply your product/service to meeting that challenge in part or in whole. Using your expertise, it is important to express how you can – over the competition – save them time or money. If you can minimize their liability, hassle, pain, and discomfort, your contribution is golden. Taking experience from one of your markets and applying it to another could provide creative solutions that your competitors can’t offer. By showcasing what makes you unique and a perfect fit for the project, you will win a loyal client who will also let others know what you did to serve their needs.
DESIGN IS IMPORTANT
Having worked in various roles and capacities in the contracting industry, I have learned that one of the most important ways to bring value is through the design of a product, service, or project. It is on the front end, when the preliminary concepts and needs are being discussed, where the largest strides and gains can be made. Many contractors use the term value engineering. That term is important, but if you are not locked into a specific design, you may find that you can influence the overall design or subsets of it to bring tremendous value to your client.
One realm where this is obvious – not as obvious 10 years ago – is the area of sustainability. Construction has a life cycle and the initial cost turn out to be about 10% of the costs over the life of the pro