No Things Being Equal

There’s a new ice cream store here in town.

Well, okay, it’s not exactly a store, it’s more like a grain silo-ish thing attached to a market, from which they now sell ice cream.

And that’s bad news.

It’s bad news because thanks to the conversion of said grain silo, my family and I now have four ice cream options in our vicinity from which to choose.

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Frankly, the tradeoffs are mind-boggling – one-third more so, given the new addition.

The problem is that each place, relative to the other three, offers its own unique combination of flavor selection, portion size, price, comfort, dog friendliness and distance from our house, to name just a few of the most salient variables.

If you thought the recently-ended Republican primary offered too many choices, imagine those people jammed into a waffle cone and doused in hot fudge and you’ll have some sense of what I’m dealing with over here.

In addition, and as a result of all this ice cream convolution, here in town, different people possess wildly different views regarding which ice cream place is “the best.”

Interestingly (and for all I know, not coincidentally), we also have four options for buying gasoline in town. Here, however, and given my long held belief that “gas is gas,” the choice is easy – I just pick the cheapest one.

So here’s my question for you and your professional service firm:

Are you a gas station … or are you an ice cream store?

Here’s why it matters…

The people who hire you would prefer that you were a gas station. Why? Because it’s easier to make a buying decision when all the choices are – or at least appear to be – the same.

Your prospective clients want to line you up, side by side with the other gas stations and pick the cheapest one (or get you to reduce your fee based on the fact that you’re not the cheapest one).

And why shouldn’t they? If “law firms are law firms,” or “recruiters are recruiters,” or “gas is gas,” all of us as buyers make a simple decision based on price.

You, however, want to be an ice cream store. You don’t want the comparison to be simple and you definitely don’t want the decision to be based on price.

Rather, you want prospective clients to see you as the only viable option for their unique bundle of needs and preferences. Either they hire you, or they get nothing – no reasonable alternatives exist.

In this scenario, side by side, apples to apples comparisons are meaningless; buying decisions based solely on price are impossible.

Three ideas then, for putting this into practice:

  1. Don’t be generic. If you describe yourself as simply “graphic artist” or “marketing consultant” or “law firm,” you are inviting prospects to use price as the differentiator.

    If, on the other hand, you are a “graphic artist who specializes in the Australian food service industry,” you muddy the waters, making side by side comparison more difficult.

  1. Don’t sell time. Charging by the hour is the service provider equivalent of pricing by the gallon. It suggests uniformity among choices and here as well, puts you in a neat little box for prospects to stack and sort.

    When you package your services, however – for a flat fee, with a distinctive name and with lots of elements mixed together – you create a unique offering whose elements are not easily pulled apart.

  1. Show some (authentic) style. If you look, dress, talk, write, behave and work in the same way as all the other professionals in your industry, I’m going to slap the “generic” label on you and ask what your hourly rate is.

    Create and/or highlight real differences between you and the competition. (Hint: Telling me your firm is made up of “experienced, trustworthy professionals” isn’t a real difference unless you can point out a competitor who claims to employ “unreliable morons.”)

    Can you implement a unique pricing scheme (e.g., all-you-can-eat accounting services)? Do you have an unusual/compelling back story (e.g., “Our founder speaks 12 languages.”)? Do you have a contrarian point of view (e.g., “I’m a financial planner who thinks 401k plans are bad.”).

    The point is, you want to uncover differences, not similarities.

Here’s the bottom line. As consumers – whether of gas, ice cream, or professional services – we are eager to pay the least amount of money for a given result.

As sellers, therefore, your job is to make your “given result” as unlike that of your competitors as possible.


17 thoughts on “No Things Being Equal

  1. Vaughn Hromiko

    I love Michael Katz . . . well, of course, in a professional business-like sort of way. His free Blue Penguin newsletter is great. I’ve also paid to attend one of Michael’s online workshops.

    Thanks for another useful message.

    1. Michael Katz Post author

      My pleasure, Vaughn! Right back at you (in an equally, professional sort of way!).

  2. Katherine

    Brilliant, Michael, as usual. Have I missed you lately (I have) or have you been slowing down your 2-week schedule? Anyway, we’re finally off to France, where I will attempt to induce French people to learn English from me, and to help them with their dogs. I will need you very soon. Thanks for another brilliant newsletter.

  3. Don

    Here, here regarding charging flat project fees vs quoting an hourly rate. I pretty much refuse to quote hourly rates any longer and have yet to have a client balk, at least to the point of not hiring me because of it. I earn $200+ an hour on my most profitable work because I can work really fast, but why should the client care how long it takes me? They get a great deliverable and great service at a fair price (or they wouldn’t hire me) which is all that should matter.

    1. Michael Katz Post author

      You’re singing my song, Don. Great to know it’s working so well for you. The great thing about flat fee is, not only do clients not mind if it’s done quickly, they prefer it, so they get their work sooner!

  4. Joan

    You’re a genius. As a bereavement minister (grief group facilitator) I see where your suggestions would work for church bulletin announcements to invite possible participants in need of support. My co-worker and I are thinking of going “public” into the secular world and offer seminars and grief support training to institutions (nursing home caregivers, human resource personel, school faculty members) and organizations (church memberships, medical staffs, etc) for a fee. Your three points are very motivating. Thanks I’ll keep in touch.

    1. Michael Katz Post author

      That sounds like a nice transition for you Joan. Keep me posted; I wish you both all the best.

  5. Jen @ Yellow Bird Blogs

    So true, Michael! I particularly like your point about “dog friendliness” as a factor in the ice cream destination decision – really highlights the fact that oftentimes the deciding factor for your customer may be something a bit outside your core business you never even thought of, so it’s important to think outside the box on both the *entire* service/product/experience you’re offering, as well as what may be important to those you serve.

    1. Michael Katz Post author

      Could be. I find it hard to change things with existing clients (especially the way we price).

      At the same time, “the market” isn’t a thing in itself so much as lots of people who fall into a particular category. Changing what you say about who you are, how you work, how you price, etc. is often easier than we think, as the people who are newly added to the mix (i.e., they weren’t aware of you before) have no memory of the “old company.” As with so much of this, I find it’s more about changing ourselves from the inside out!

  6. Joe Van Wyk

    I was absolutely GIDDY when I read this article:

    Well, maybe not giddy but intrigued. I think it fits your point perfectly, Michael.

    The article is about “showrooming” and I bet it drives these big boxes bananas!

    I recently heard about a solution to showrooming. My 85 year-old dad is just pitiful when it comes to technology. Regardless, he and my mom went to a Barnes & Noble and, as a result of the over-the-top service of another senior citizen, purchased a Nook. He told dad about the Saturday training classes, and even gave my dad his cell phone number!

    Now all we have to do is keep him from doing this:


    1. Michael Katz Post author

      Totally agree, Joe. It has to be about more than just the product and the price, or else people will pick the cheaper way. Great video post too!


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