Helping a Business Owner Charge What They’re Worth

0:00Unternehmer/Gast All right. Commercial refrigeration. That sounds fun. >> Greatest businesses, man. >> Really? Commercial fridge? Yeah. I mean, there's probably like 10 of them and they can charge whatever they want. Yeah, that sounds interesting. >> My heck. What's up? >> Hey, Alex. >> Hi. What's revenue? What's holding you back? How can we help? >> Awesome. Revenue is about a million. Um, gross margins around 40%.

0:26>> Nice. Oh, gross. Gross. >> Yeah. Okay. >> Um, >> so 250 250 net >> 250 net. Yeah. >> Okay. Got it. 40% gross margins. Got it. Um, all right. Commercial refrigeration. Uh. Um. Got it. Okay. So, what's what's holding you back? >> Um, I think pricing. Um, I I think I said in the context text like uh qualified leads, sales team, and pricing. But since we're talking money models right now, let's go with pricing.

0:57Um, I sell a commodity. It's a $100,000 per ticket commodity, but um, it is in in the end like hard to differentiate like the value of a, you know, $50,000 walk-in cooler versus a $100,000 walk-in cooler, right? Um, >> and that's kind of I think where I'm struggling because I used I was at this workshop and gave me some great advice about referral bonuses, which I implemented. Um, got two new clients out of that. So, I went on the referral bonus, got a $100,000 client and a $50,000.

1:34>> So, you ROI wide the uh the day. Fantastic. >> I did. I did. And then the challenge was um that the client, one of the clients that I did pick up from that is really price sensitive. So, someone comes along with like um you know, an offer that's $5,000 less than ours. Yeah. and they'll go with that instead of ours even though we can provide >> Yeah.

1:57Alex >> I would perceive as more value because we actually have stronger communication which is very rare in the construction industry. >> Yeah, I heard. >> Um >> can can I cut you off because I because I I want to help you out because I'm pretty sure I know what you need to do. >> Please go ahead. >> Okay. So the thing is is that like for sure you're providing more value. They just don't know you're providing more value. So it's a communication issue. So we have to frame it. And so I I'll explain that differently. So number one, we have three vectors of value, right?

2:23We have risk, we have ease, and we have speed, right? So you want to win on one or more of those ideally in terms of your core deliverable. Now, for the business that you're in, I'm going to bet that speed and risk are going to be the maybe even actually you have vectors in all three. We need to basically calculate the cost that they have to incur over a longer period of time by using a competitor versus using you. And so when they factor that into the overall price, it should be a steal.

2:51Alex Does that make sense? >> I think so. But I would love an example. >> So let's say that because the communication is poor on like this is where industry averages and stat stats are super valuable from a selling perspective. I would say okay, it turns out the average commercial refrigerator breaks down once every, you know, nine months or every 18 months or whatever the number is, right? It says like now unfortunately every 18 months though it costs 30% of the average, you know, commercial refrigerator in terms of price to fix it or I don't know. Again, I don't know what the price is, right?

3:18And so, the thing is is that with the vast majority of other people, they're going to uh save you a dollar today and cost you $4 tomorrow. I'm going to charge you $2 today and save you $4 tomorrow. >> Good. >> And then that way you can you can price in the savings of the additional services and value that you provide. Yeah.