Competing with Utilities, by John Barba
"Theutility just did it to me again" he groaned. "They're buyin' boilers bythe truckload and just givin' 'em away to my customers. I can't take itanymore." His head was pointed down, but his eyes were rolled up towardme. Those eyes told the sad, sad story… "I quit."
"TheSOBs came in with a price so cheap, there was nothing I could do. Thecustomer was nice enough about it, but he said the gas company deal wasjust too good to pass up. Hell, it was lower than my cost!"
"What in hell am I gonna do?"
Guesswhat gang -- this is the new reality. As we speak, giant utilities areforming huge conglomerates to not only provide natural gas andelectricity, but to also do plumbing, heating and cooling service andinstallations. And they're in a gobbling up mode.
HomeCenters are doing the same thing. Agent Orange and their friends areleveraging their strong brand identity in the home improvement game andoffering soup to nuts installations – bathrooms, kitchens and heatingand cooling systems.
Due to shear size their cost ofdoing business takes on an economy of scale, and they're buyingequipment at bargain basement prices. These savings are clearly beingpassed on to the consumer. The undeniable fact is that the utilitiesand home centers are here, they're players and they're not going away.
So deal with it.
How can you compete?
Firstof all, there is one customer group you're never going to get from theutilities or home centers: the price buyer. This guy is going to buy onprice. He was going to buy on price before these guys were doinginstallations; he's going to buy on price now, and he's going to buy onprice in the future.
This is somehow a surprise?
Youknow price buyers. They want a deal and they want it now. When it'stime to pay they'll make you dance the hula in drag for your money, andthen won't pay you all of it. They'll monopolize your time, telleveryone else how cheap they got it from you, and annoy you withendless callbacks, promising they'll pay you once it's taken care of.
In short, they'll lie to you and they'll steal from you.
And you're worried about losing these guys?
If price buyers want to buy their heating systems from the utilities or a home center, let them!
Now for the good news. If the price buyers are going to be seduced and carried away by low prices, who's left?
Simple -- everyone else!
Therereally aren't that many price buyers out there, you know. I mean peoplewho buy strictly on price. Lots of people say they do and act like theydo, but they really don't. If people really did buy on price, obviouslythere'd be more Yugos on the road, more Vermont-American tools in yourtoolbox and we'd all be laughing at Starbucks and its three-dollarhoity-toity coffee instead of lining up to buy one. Nope, when it'stime to whip out the ol' wallet and dig deep for the cash, most folksworry about paying too little, not too much.
Yep, you read that right. Too little.
It'sespecially true with unique, big-ticket items. You can get a smokin'deal on a name-brand laptop computer on the Internet. You can get aneven better deal on an off-brand laptop. Which is the better seller?
The name brand, of course.
Peoplebasically believe that higher price indicates higher quality, betterservice and a solid reputation. It's a better, safer choice. And youknow what? Even with the smokin' prices on the internet, people stillbuy computers at stores. Where they buy from people. Where they can goif there's a problem. You know, just like in the old days.
Understandthis, the very thing that makes the utilities and the home centers veryformidable competitors — their size — is also their Achilles heal.You're a number to huge organizations like that. It's hard to get warm,personal service from a monolith. All-powerful monopolies don't know,or care, who you are, what you do for a living or how your AuntMartha's feeling. Omnipotence creates distance.
Way backin the 70's Bob Seger's "Night Moves" album had an anthem for themodern man. It was called, "Feel Like A Number." With his considerableblue-eyed soul, Seger sings of losing identity in an increasinglyimpersonal, computerized world. True in the 70's, even more true in the00's. Think of all the numbers that identify you – social securitynumber, driver's license number, PIN number, credit number, frequentflier number, employee number, customer number.
Thinkabout calling a utility for customer service. After an eternity onperma-hold, you'll get some sort of automated answering system…for newaccount information, press or say '1…for existing account information,press or say '2'…if your house is on fire, press or say '3'…
When(…if) you get to a real person, they don't know you, never heard of youand don't really care about your problem (that's why it's known as yourproblem). When can a service man come by? Tomorrow afternoon? Nosooner? Any specific time tomorrow afternoon? Why are you laughing atme? What? You too…
Think you can do a little better thanthat? Does a real person answer your phone? Does that person care aboutthe caller's problem? Can you promptly help that person?
Ina world where people are feeling increasingly isolated, a little humantouch goes a long, long way. And whether you're competing against amonolith like the local utility, Agent Orange or the low-ball guy downthe street, it's the human factor, the personal service andrelationship with people that will be your trump card. Don't be afraidto play it.
(John Barba is the training guru at Taco.)