Knowledge Has Its Price, Too!
Harry was in the ready-mix concrete business. With lots of construction and developments underway, concrete was a good business. Like his competitors, Harry ran a busy Harga Beton Ready Mix Jakarta
yard lined with trucks loading sand, gravel and cement for construction sites.
To customers, unfortunately, concrete was concrete — an undifferentiated product called a commodity. Harry noticed the first thing contractors asked on the phone was “What’s your price on a yard of concrete today?” Then they called three or four other ready-mix places to find the lowest price that day.
It was easy to be caught in a “race to the bottom”: low prices, skimping on the mix of materials, paying the lowest wages, using poorly maintained equipment, giving poor service — and ultimately getting little or no profit.
Harry decided he didn’t want to race to the bottom. He had to do something to rise above the pack. After we analyzed the problem, I worked with Harry to develop a script. He began by asking contractors questions that showed his expertise about the applications of concrete.
First he asked, “Before I tell you my price, tell me what you’re going to use it for?” If it was for footings or for sidewalks, curb and gutter or for wellhead seals, his next questions was, “What municipality are you pouring in?” Because he knew the zoning differences, Harry would remind them that the city and county had different requirements.” Harry even offering bidding advice, telling contractors, “When you get quotes from the other guys, remember to ask for 6 sacks of cement per yard as opposed to 5 sacks, or you’ll wind up jack hammering it up and redoing it.” Then he’d remind them about additives for surface texture or hardening speed. He even alerted contractors that some suppliers of concrete had a “standby charge” if the trucks had to wait to unload–which he did not.
Immediately, contractors were listening closely to Harry’s questions.
By the use of scripts and questions that demonstrated his knowledge of construction requirements, he was able to differentiate his offering. He was not just in the concrete business; he was also in the concrete applications and the “I’ll keep you out of trouble” business.