We recently received this email from a reader of the Commusoft Business Blog:
" I am constantly looking for a way to add value to our service work and therefore offer a ‘premium service’. I realise that this may increase what we charge, but my experience tells me that there are always customers who will want the top premium level of service.
Commusoft is becoming more important to our businesses and really helps. I need to show people we are the best. How can we add that next level of service? ”
We're going to tackle this question in a series of four posts. If you prefer listening over reading, we have a podcast version of this post. You can either listen to it right here on this page, or download it to listen to on the device of your choice. Listen now!
How do I become a premium business?
Here are the steps to attracting high-end customers and charging more for your field services.
- Know what "premium" means to you.
- Figure out if your market will support a high-end business.
- Be prepared to lose old customers—and gain demanding new ones.
- Start offering top-of-the-line products and services.
- Offer beyond-exceptional customer service.
- Rebrand your business to reflect your premium status.
- Raise your prices the right way.
We'll go into detail on the steps in this post and the upcoming posts in this series.
1. Know what "premium" means to you.
When you think about becoming a high-end business, what do you envision? Yes, gobs of cash of course. But how much would you like your business to be earning? Exactly what kinds of customers would you like to be serving? Do you dream of working for fewer, but better-paying, customers?
If you're the customer of any premium businesses yourself, think about what you like about the products and services you get from them. (While you're at it, think about what you don't like, too.) This will help you put together an idea of what you want your premium business to look like.
2. Figure out if your market will support a high-end business.
If you live in a region full of low-income households or barely-making-it businesses, you'll have a hard time getting people to pay premium prices for your products and services. Take a look at the stats for your area to find out if it can support high prices; for example, the Office for National Statistics offers a report on gross disposable household income by region.
If you're not located in an area that can handle premium prices, it's okay. Instead, you can niche down into a unique offering that customers all over the country will be swamping your phone lines for—and they'll pay enough that you won't mind the travel.
That's what Justin Dring, Senior Consultant at Perfect Sense Energy in Manchester, did in an earlier business: He went from a general electrical company that would take on any kind of job, to one that specialised in soundproofing. 'It got us all over the country doing sports halls, gyms, schools, universities, and a couple of TV recording studios,' he recalls. 'We fell into it by accident but we really quite enjoyed it.' Our upcoming posts will talk more about finding your premium niche.
3. Be prepared to lose old customers—and gain demanding new ones.
When you raise your prices you'll probably lose some customers...but it could be worth it. 'I probably lost 20 to 30 percent of my existing clients,' says Dring. 'But I found that the Pareto Principle really does kick in. Suddenly, you're working 80% less time because you're not working with the smaller tiny, high turnover jobs.' The important point here is that not only are you working less, but you're earning the same as (or more than) you were before!
Of course there is a trade-off: High-end customers are less easy-going than the ones that want to pay bargain prices. Upscale commercial customers tend to know exactly what they want and be very deadline-oriented—which is a good thing for your business, really.
Upscale residential customers, on the other hand, may be more finicky and demanding. Are you ready have an engineer run across town to replace a customer's HVAC filter (which they could have done themselves in 20 seconds), or to change a fuse that blows out five years after you installed an appliance for a customer?
The answer may be yes! Just know what you're in for before you make your premium plan.
MORE READING: Premium!: How Experts Just Like You Are Charging Premium Rates For What They Know And You Can Too! by Rob Cuesta. (The book is meant for people selling their expertise, like consultants, but is good advice for any field.)
4. Start offering top-of-the-line products and services.
No one wants to pay high prices for the same-old-same-old boiler maintenance, light installation, or alarm system they can get from anyone else. If you want to go premium, you'll need to rethink the value, exclusivity, quality, and image of every product and service you offer.
To select premium products that make your business seem more luxe, Melina Palmer, founder of The Brainy Business and The Brainy Business Podcast, suggests checking out upscale architecture and home design magazines to see what's hot in terms of lighting, appliances liks cookers, and bathroom fixtures. (Here's a list of the top 50 interior design magazines in the UK.)
Even if you don't sell those particular products, you can get an idea of what colours and materials are considered desirable with more sophisticated consumers.
Offering top-of-the-line products is pretty straightforward, but services are another thing altogether. It's hard to make, say, fire alarm maintenance or a boiler repair seem special. But what is special is that you can offer service and maintenance packages that go beyond the usual service agreement. We'll be talking talk more about selecting products and services, and developing packages, in the next post.
5. Offer beyond-exceptional customer service.
Higher prices demand a higher level of service. It's often about the little things:
- When you install a thermostat system in an office building, show the customer how to use it.
- When you bring a heavy appliance into a customer's home, lay out a carpet on their hardwood floors so they don't get scuffed.
- Have your engineers offer actual white glove service by wearing, well, white work gloves.
- Leave a small gift for the customer after a job.
- Follow up.
We'll delve more into these and other ideas in post #3 in this series. In the meantime, you're probably freaking out a little about how hard it is to find skilled engineers, much less engineers who are customer service pros. Here are some creative ways to hire great engineers—and don't forget that when you're charging more, you'll be better able to compete for skilled workers.
6. Rebrand your business to reflect your premium status.
The colours, fonts, and writing styles your business uses impact how customers see your business. For example, blue, brown, gray, gold, and black are colours that make your business look more luxurious, serious, and sophisticated, according to 99designs.
However, Palmer says that if you commit to it, you can make any colour seem premium. As an example, check out Virgin Atlantic's red logo. Red is a colour we normally associate with low-cost leaders, not quality brands, but Virgin makes it work.
If your branding doesn't look luxe, you may need to have a new, more sophisticated look and feel designed for your:
- Service vans. (Here's our post on service van design.)
- Business cards.
- Invoices, purchase orders, service reminders and other customer communications.
- Polo shirts. (Yes, you'll probably want your engineers to wear branded company shirts!)
Premium branding also means having a professional outgoing voicemail message, using the top tech tools for your business, and having quality writing on your website, in your brochures, and even on your business card. We'll have more on how to create premium branding for your business in the fourth post in this series, so be sure to check back.
At this point you're probably wondering where all the cash is coming from to overhaul your business. That leads to the final step...
7. Raise your prices the right way.
This may be the hardest part of taking your business to the next level: You're about to start charging premium prices, and you're suddenly flooded with doubts. Will we lose all our customers? Will anyone pay these prices? Who are we to charge that much, anyway?
Here's a mini manifesto that will inspire you to raise your prices as high as you need them to be:
If higher rates helps you do your best work, then you're doing your customers a favour when you raise your prices. When you're worried about your near-empty business bank account, you have less energy to focus on your customer, you hire less-skilled engineers, and you may even be tempted to cut corners to cram in more jobs. So consider a price increase a gift to your customers.
In the final post in this series, we'll share expert tips on:
- How to decide your new pricing.
- How to get over the mindset that your prices are "too high".
- Why you need to give price quotes like you're telling someone the weather.
- Whether you should include your prices on your website.
- How to raise your prices in a way that won't turn off your (good) current customers.
We don't want to leave you with a bunch of teasers and no actionable tips, so here's some advice to chew on until our final post of the series: Dring suggests you actually start raising your prices during the process of revamping your business to become more high-end. That way you have the cash on hand to redo your branding, offer a higher level of service, and the rest.
Download the MP3 file here for your computer or mobile device!
Need help? These simple tutorials will show you how to add the MP3 to your iOS or Google devices.