This past year my wife Karen and I took a trip to Iceland to celebrate our 40thanniversary. We drove four-wheelers, ate overpriced chocolate, and truly had the time of our lives.  Of course, when you travel to Iceland you have to take a dip in one the of infamous hot pools all over the country.  So, we ventured to The Blue Lagoon.  They sell one thing and one thing only, a dip in a huge, and I mean huge geothermal pool which is run off water from a geothermal plant and they sell it with a menu.  Look at the packages and remember they have hot water in a big pool made to look like a volcanic hot tub.

Standard – $50 – Entrance to The Blue Lagoon and a silica mask.  (So, a dip in hot water and some mud for your face – the mud is everywhere so it’s “free” anyway.)

Comfort Package – $65 – Entrance to The Blue Lagoon, silica mask, use of towel, first drink of your choice, and an algae mask.  (So, you get the dip, the mud, use of a towel, and get this “first drink” …which means you get the chance to buy more.)  One particular night I bought a cocktail in Iceland for $22.00 USD.  Oh, but you also get the mud upgrade to a seaweed mask. Think about it.  How many ways can you sell your service?  It’s ‘just’ a capacitor but throw some mud on it baby!

Premium Package – $80 – All of the above, listed individually on their menu, plus use of a bathrobe and slippers (oh yeah let’s act like Brad and Angelina while we’re here). You also get a reserved table at the “Lava Restaurant” which means, you get a chance to order a $50 cheeseburger or something way more expensive and you get a glass of sparkling wine.

The Luxury Package – $195 – All of the above listed individually again plus a Spa Journey Product Set (saves you from buying a coffee cup at the airport right?) and an entrance to the exclusive lounge.

So which one did I buy?  Well, since I was there for 9 days and didn’t plan ahead, I was only able to get in for 3 hours.  I ended up buying two ‘Comfort Packages’ so we could at least get that first drink at the swim up bar for free…it saved me $22 each.  But, since I bought only two days in advance the $65 became $70 each.  And, we decided to bring our own towels and bathrobes so we could pretend we were Brad and Angelina…or maybe Elvis and Priscilla.  Only $140 for a dip and a drink, what a deal! Right?

My point is if you take what you have to sell and find a way to make the same thing more valuable, your customers will pay more by buying a higher “package”. I was taught for years that it was all about putting all your cost and profit into each task and demanding that the customer pay for that and then we would make more money by add-ons.   But add-ons are just a bunch of things the customer did not order, so it causes sales resistance right?  Anybody feel that?  Your customer does not buy that way…unless, he is in Best Buy.   When in McDonalds, he is offered a slab of hamburger, then a better slab, and a much better slab, and then a better better slab.   Don’t get sidetracked by the fries and coke, just think about making your burger better or your capacitor more desirable.

So here is an example using Don Risher’s term, “Electronic Starting Assist.” Instead of a capacitor. 

GoodElectronic Start Assist – Customer thinks: “Cool it assists my AC to start that must be good, no wonder it wouldn’t start before.”

BetterQuiet Boost Electronic Start Assist – Customer thinks: “Ooh I like that helping my ac unit to start without a bunch of screaming.”

BestPremium Energy Select Starting Assist Renovation – Customer thinks: “Wow that must be really good.”

Now I was sitting in my ‘luxury’ hotel room in Iceland just pulling these off the top of my head because I have studied menu pricing for 9 years now.   But some of you may be saying, that’s a crock, a bunch of stupidity, a bunch of gibberish and of course my customers are so smart they will see right through that.  Besides, I’m not a crook, that would be stealing!  Remember the song.  “Before you accuse me!”  You are the expert.  You should take a look at your assets and add them selectively to each package above.  Example:  Can you add more of any of the following to one or more of the packages above:

  • Expertise
  • Knowledge
  • Wisdom
  • Experience
  • Better Warranties
  • Tender loving care
  • Technical processes
  • Cleaning or Restoration Process.

This is where you add value so it is not stealing, its selling a truly better burger.

click here for more-01Have you been giving all of this away while trying to cover your costs?  Find a way to offer the customer a buying process like the ones he has been accustomed to for more than 20 years. Retire rich for goodness sake.  I heard somebody say one time, “contractors are damned determined to go broke.”  That used to be me, until I quit thinking like a wholesale house and started looking at the businesses that actually made retirement level money.

Think about it, I was sitting with mud on my face in power plant runoff holding a watered-down drink with a stupid grin on my face at The Blue Lagoon.  You wanted more ammo.  Take a few rounds from me.

Rodney Koop/ Founder of The New Flat Rate