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Here’s A Race You’ll Want To Lose (And Why It Matters For Your Business)

When you think of a race, most people think of trying to win. But there have been times when my HVACR competitors wanted to challenge me to a race, and it was a race I did not want to win; in fact, I’d go out of my way to avoid participating. And if you want to run a successful, thriving HVACR business, then you’ll want to lose this race too.

I’m talking about the race to the bottom.

It works like this: Several established HVACR companies enjoy the healthy competition in a market. Everyone’s serving their customers, and all is well. Then, one of those companies, or perhaps a young startup company that wants to gain rapid market share, swoops in and offers an amazing discount.

Suddenly, everyone sits up and takes notice, or they realize that their customers are leaving their company and going to the discount company. So, those established competitors try to offer a slightly better discount.

And then a slightly better one.

And then a slightly better one.

So, it continues until each company becomes focused on slicing costs and squeezing their payroll and their vendors in order to afford to offer the most aggressive discounts in the market.

It’s a race to the bottom because you can only go so low until you run out of money.

Unfortunately, I see it happening too often in the HVACR industry.

But most owners reading this will ask, “What other choice do we have? Our competitors are stealing our customers with their rock-bottom prices. If we want those customers back, we need to offer even bigger discounts.”

And I always respond by asking, “Are disloyal, discount-seeking customers the customers you want to have for your business?”

If you want to compete against aggressive discounters in your market, the best way is to not get involved in that race to the bottom at all. Instead, do these four things:

1. Attract a better customer –

 Create an “avatar” (that’s a marketing term for a description of your very best customer that you wish all your customers were like). And if you don’t want a disloyal, discount-seeking customer, then don’t make that your avatar.

Instead, create an avatar of a highly loyal, price-insensitive customer who loves your company. You may need to change things about your offer or even your company. Then figure out how to market to this avatar: Where do they live? Where do they work? What hobbies do they have? Figure out who your best customer is.

Continue reading the full article HERE.

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