This post is the first post in a series of posts on marketing for architects entitled “Learning From Las Vegas”. To get article updates, subscribe by clicking the ‘subscribe' link to the left.
I recently returned from a week with my partners in Las Vegas teaching members of the Architects Marketing Academy more about marketing and persuasion.
Architect marketing coach Richard Petrie, led the sessions. Throughout the week, he shared marketing lessons ‘learned from Las Vegas'. Here he writes about ‘How Good Architecture Firms Can Charge More'.
Take it away Richard:
I'm tired and lacking tact when I turn to the Air New Zealand executive sitting beside me and ask…
“How on earth do you get away with charging one person $69 and another $269 for two seats side by side?”.
We're on the final leg between Auckland and Wellington. He doesn't really like my question.
Can you deliver the same service to two clients and charge one 400% more?
Air New Zealand can, and I'll explain HOW in just a moment.
Price pressure was the big challenge for many of the 32 attendees at our workshop in Vegas last week.
US Architects feel they're fighting a losing war because they believe their service is rapidly becoming seen as a commodity.
Students are being churned out of design schools while computers are making the work faster.
One architect, Marcus, told me he can produce the drawings for a skyscraper alone in three months – a job that used to take 20 people to finish.
Architects aren't the only ones being told they are losing deals because someone else is cheaper.
Accountants, lawyers, builders, bakers and candle stick makers are hurting too.
Yet some companies – selling genuine commodity products and services, can charge silly fees and not be price-shopped like you.
Is there a secret?
Do they they know something you don't?
Yes! Of course.
Let's consider cell phone companies, banks and airlines.
400 minutes a month from cellular network providers Vodafone and Spark is the same.
A $300,000 loan from Bank A or Bank B is still $300,000.
Two airline seats side by side arrive at the same time.
So surely all these items can be price-shopped?
Well, it's not always that easy because sellers make direct price comparison really hard. How?
The answer is they NEVER offer their service in a way that can be compared.
What? I'm 100% serious.
If money is money then how come banks can charge different interest rates?
The answer is they try not to sell money but their ‘package' – they even call it a ‘product'.
These sneaky devils package up products and services into a unique bundled solution.
Each “product” may include different terms, service levels, conditions and access to a private banker.
Kiwi banks (my turf) are usually cheaper but don't get 100% of the business.
A quick look at bank ‘packages' tells us that loans can be:
- Fixed
- Floating
- Flexible
- Combination
- Or each with different conditions
Some loans can be paid off faster, others offer discounts on fees for other accounts.
Cell phone companies do the same thing.
Vodafone offers many of the regular features like minutes, data and text messaging, but also offers:
- Free weekend calling
- Unlimited text messaging
- Fantastic Fridays
Since the competition doesn't offer these extra features the product is ‘unique'.
Theresa Gatung from Telecom admitted that cell phone companies bundle packages to confuse customers and make price comparison difficult.
If they didn't then they'd have to compete solely on price.
Air New Zealand bundles up a ‘package' too.
- a seat
- seat + bag
- seat + bag + ‘flexitime'
- seat + bag + ‘flexiplus'
If you're competing on price, it's because your package is too easy to compare with the competition.
Use your imagination. Create something different so comparisons can't be made. Then put your price up to match a fair value for the services you provide.
We're well into 2015; there's no reason this can't be the best year in business you have ever had.
But you'll have to use smarter strategies.
It sure is good to be back in New Zealand.
To get the rest of the architect marketing series on “Learning From Las Vegas”, subscribe for article updates by clicking the ‘subscribe' link in the left sidebar of this page.
And leave your comment below. Will this change the way you perceive and present your services?
Addendum:
Architect Rand Soellner had the following to say when he saw Richard's story:
Hello ArCHmembers,
Below, please see Richard Petrie’s latest vital things to know about architectural marketing, which he already knows, but was pressed home to him at his expensive Las Vegas marketing symposium.
He spent thousands of dollars attending this worldwide marketing convention so that he could share his knowledge with Architects everywhere. However, most of us are too busy looking for new work, or busily trying to knock out commodity-priced work, to listen to him. Isn’t that odd? Here’s a guy that is the reigning champion of Architectural Marketing on the planet and yet we, whom he does this research for, don’t make the time to listen to him! Hmmm.
Well, I am listening. So much so, that we are going to make the primary subject of next Wednesday’s ArCH ExComm [editor's note: click here to read more about ArCH].
Richard has advised that architects not make it easy to compare your prices with others. Instead: BUNDLE. And bundle what you do in a UNIQUE way, so that no one else will be offering it quite the way that you do. And before you cry foul, and think this isn’t a good way to do business: have you ever seen what many GCs (General Contractors) do?
Exactly the same thing: GC “A” includes some things that GC “B” doesn’t, and GC “C” offers less things than GC “B”, but more than GC “A.” They may not be comparing their notes, but there appears to be a focused effort to make it hard to compare apples to apples. And that may very well be intentional.
Why: they refuse to become a commodity.
Commodity = all things are the same except price. Note to self: don’t cast yourself as a commodity.
2 Responses
enjoyed the post great insight I am Marketing at moment for Lawrence Craig Architecture a very small one person firm
I am sure to that i will forward this and watch the you tube video thanks
Enjoyed the post. I think that a successful architectural firm has to present proposals that are unique compared to the the masses and offer something that can’t be found elsewhere. Creating some intrigue will usually get a return call and generate an opportunity to further sell your services.