458: Price or Features: What's Your Selling Point?
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What does it mean to sell on price vs selling on features? When we go to market our business, do we understand what our messaging is communicating? When we sell at our price, we’re trying to differentiate ourselves by how much we charge. Selling on our features is when we can lean into experiences, expertise, and our high quality. There is a time for each as we work to hone our messaging for our target audience and our stage of business. On this podcast episode, we break down how to implement each strategy in your business, and what to watch out for.
Main topics
What is selling price?
What is selling features?
How to implement them in your business
Making the right connection to your client
Main takeaway: You can also blend both strategies, offering competitive prices while highlighting unique features.
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
price, client, walk, pet, service, selling, pet sitters, dog, features, offer, discount, people, higher rates, booking, rate, provide, higher prices, company, business, premium
SPEAKERS
Meghan, Collin
Meghan 00:01
Hi, I'm Meghan. I'm Collin and we are the hosts of pet sitter confessional and open and honest discussion about life as a pet sitter. Thank you to our sponsor today, pet sitters associates and our Patreon supporters for helping to keep the show going.
Collin Funkhouser 00:14
If you'd like to learn more about that and see all of the features and things that you get from being a Patreon supporter, go to your pet search professional.com/support. As
Meghan 00:23
pet sitters and dog walkers, there are a lot of things that we can do to distinguish ourselves from others in our area. It could be you have different pricing, or offer different services or a different service area. But think about what distinguishes you what sets you apart from the next dog walker down the street. Do you focus on these prices? Are they higher? Are they lower? Do you talk about them at all? What do you focus on to bring in new clients when you go and talk to somebody about what you do? What are some of the tactics and words that you use and phrases that you say to help people know about you? There are two very common selling tactics. And the first one is talking a lot about price when you go to sell your services. The other one is talking about the features that you offer. Typically, businesses that sell on price aim to attract customers by offering lower prices compared to others. And that's a strategy that's often used in markets where services are relatively similar, and where price is a major decision factor for consumers. However, competing on price can sometimes lead to a race to the bottom where profit margins are continually squeezed. And nobody wants to be in that game. We don't want to be working an hour for $5. That's not something that's feasible, or financially sustainable in our businesses. And
Collin Funkhouser 01:38
compare this to if you sell on features. This involves highlighting your unique features benefits quality of service, rather than focusing on the price. This is when you differentiate your offerings by showcasing distinct characteristics innovative technology that you use, or superior quality or added value that you bring to the client. This is often used for services where differentiation is clear between the options that clients have, and it can be effectively communicated to a target market. And that is, that is essential here have it's not just that there is a differentiation, but that the differentiation itself can be effectively communicated to the target market that you're after.
Meghan 02:16
So implementing these looks a little bit different between the various tactics you are selling on price. If your Facebook posts include how affordable your services are, you may not use the word cheap, but you may say affordable alternative to x. Well, that means you're selling on price. If you are saying you regularly offer steep discounts to keep clients coming back in or to get new clients, you are talking about price. So some practical examples of how a dog walking company can effectively sell on price. The first one is group walk discounts. If you create a schedule where multiple dogs are walked together at a discounted rate per dog, that's very appealing to customers because they are looking for more affordable options. When we are doing the one for one dog walks, it is very costly to go to a client's home even if they are close together five or 10 minutes apart, it's still costly to walk one dog for 30 minutes. When you scale that you know economies of scale, it allows you to serve more clients in the same amount of time potentially increasing that overall revenue despite lowering the per dog rate. It also provides that socialization aspect for the dogs, which can be a real selling point for owners who love to see pictures of their dogs playing with others.
Collin Funkhouser 03:30
This is hard to achieve at first because if you do offer a group walk discount where you're offering a walk for six dogs, and that's, you know, it's half the price as a solo walk well, you have to reach a certain number of dogs before that starts paying off back into your pocket. So it can be a long game to build to that. But just realizing in the beginning, you're going to be taking quite a bit of a loss. If you only have one or two dogs in that group, you really do need a lot more dogs in there to make that work for you.
Meghan 04:01
If you want to achieve this, you may need to go to a high rise apartment building where there's a lot of dogs that you could walk at the same time. Another way to sell on price is through subscription based pricing. What you could offer various tiers of basic or premium with different numbers of walks per month, the monthly rate would be lower than the cost of booking the same number of walks individually. Now this approach encourages long term commitments from clients ensuring that consistent income that a lot of us really want it can also be more convenient for clients. They know okay, I every month this is how much money is taken out of my account for this number of walks and it's kind of a set it and forget it kind of thing. It simplifies that booking and the billing process.
Collin Funkhouser 04:43
A third option for selling on price is to look at having a loyalty program or a referral incentive. So after a set number of walks offer a free or heavily discounted walk. Alternatively, you could provide increasing discounts over time for continuous services use again you're rewarding mean people who come to you over and over and over, you can also look into offering a free walk or discount to existing customers for each new person that they refer. And that ends up booking a service. Doing this not only encourages repeat business and client loyalty, but also leverages existing customers to attract new ones, reducing your marketing costs and getting you into friend groups and other circles where you may have the same clients that want to use you. If you
Meghan 05:26
aren't selling on price you are typically selling on features. This could mean personalized updates the value that you bring, what do you provide these tailored updates to pet owners like pictures and videos, they add that little bit of personal touch and they showcase your attentive service. If you are selling on features, you could also be talking about your certifications and training, highlighting that special pet CPR and first aid that you have or the behavior training course that you went through or your experience with exotic pets or you've done this for 150 years and you know exactly what you're doing. If you offer a pet taxi services or supply runs, you can talk up your convenience services. Adding in the additional, you don't have to worry about the stress because I provide this when you are communicating the value and the features that you have within your business. talk also about the community engagement events that you have if you host one or participate in something. Demonstrate your involvement and your commitment to animal welfare and being the best and providing the best you are selling on features. If your social media posts discuss feelings and emotions of clients and solving problems and sharing stories, even if you are posting or sharing about the trainings and certifications and experiences that make you different, this is the value that you are communicating to clients. So how is this displayed in practical ways for a dog walking company. The first example is your specialized care and customization. So when you offer these tailored services that cater to the geriatric patients, or the puppies or these walks for senior dogs or high energy exercise sessions for active pets, talk about these things. Talk about how you do this, how you conduct detailed consultations with pet owners to understand the pet's unique requirements and preferences that you're going to tailor your visits to them specifically, not not one size fits all, but you're going to develop a customized walking plan based on these insights that you gather from the meet and greet when you use this approach. When you talk about your specialized care. It's going to highlight you and your business that you are personalized, you are attentive, you are appealing to owners who prioritize their pet specific needs and well being. A second way you can talk about your features is with your enhanced experience and your added services, which can include enrichment activities during walks or basic training or agility exercises, or additional services like pet photography. When you integrate these activities into the walking sessions or additional services, it offers a more enriching and engaging experience so that your service stands out. It's the value that you provide. They say the client says Wow, it's not just a basic walk. But it's a whole package, you really cater to owners who want a more comprehensive and fulfilling experience for their pets. Because many of our companies are so technologically advanced these days, you can offer that as a convenience and peace of mind to pet owners, whether it's GPS tracking of walks, online booking and payment systems, or even a live video feed. If you offer boarding or daycare, or you want that extra enhancement on the walk, they can see where their pet is going in real time. These features can really provide reassurance to pet owners and make the logistics of scheduling and payment more convenient. No more headaches of is this person gonna show up? Did I schedule this right thing? No, they can go in and they can see this is exactly when I booked they're going to be there, they're going to show up. And it really appeals to the tech savvy clientele that values that transparency and ease of use. If they want to know exactly where their dog was walked, you will be able to tell them whether you are selling on price or selling on features, you can really blend both of these strategies, offering competitive prices while also highlighting the unique features that your company has. So for example, if you provide a standard dog walking service at a competitive rate, and you also offer a premium service that includes additional features like extended walks or pet updates, have a longer visit report with more pictures and videos or a GPS tract walk, you can really incorporate both of these into your business.
Collin Funkhouser 09:18
And what's important here is that when many of us think of offering a basic package and a more premium package, we think that our goal is to upsell the client from a basic to a premium. But what actuality what can happen is is that means you can be servicing to different clientele markets. There have two different avatars you can serve the client who wants a more affordable option with the basic one. And then you can serve as the ones who want more experiences for their pets through the premium service. And what that does is that actually broadens your market reach as your company is able to serve people in a bespoke and unique way for their particular needs. And that all takes place as you begin to understand that who your client is? We say that a lot. But understand it's not just who you want to talk to. It's who is using each one of your services. We all have people on our client list that are more budget focused, that are more service focus that are more experiential focused, are the services that they are booking? Are those services tailored to those exact needs? Are they actually fulfilling them? Or are there tweaks and things that we can do to the services to meet those better, and then are we communicating those specificities, in our marketing messages?
Meghan 10:32
To do a pro con list of each strategy for selling on price some pros are it really attracts price sensitive customers, it can lead to increased volume, a lot of people at the top of your funnel going into your business, and it's good for competitive markets, some cons are you potentially will have a lower profit margin or risk of a price war again, we talked about the race to the bottom, not really good. And then there is a potential perception of a lower quality because of the cheaper price. If your volume is increased if you do a group box of 10, or 12. So two is your workload. But our industry is already labor intensive. Now walking one dog is not the same as walking 12. But it's still labor intensive. If you want to offer a discount, or a cheaper service, make sure that you check your budget, that is the crucial thing if you're going to sell on price, because if you're offering a discount, but at the end of the day, you're going to be losing money because you either have to pay other people or you have wasted a lot of time and money and gas, then it's ultimately not worth it you have to do a budget if you're going to be selling on price, when we
Collin Funkhouser 11:36
look at selling on features some some some positives to this or it allows for differentiation from you and it can target premium customers and allows you to have higher profit margins again, as long as you keep your costs associated with that more premium service and check some cons is that it sometimes requires justifying those higher prices to people who contact you, it might also limit your customer base. So as Megan said, that top of the funnel is a lot more narrow, so we as the business owners have to be okay with a slower client acquisition rate. And then this needs continuous innovation because we have to find the right language to communicate exactly where the value is exactly to that target client is it has to be a lot more directed and focused. Then if you're selling on price,
Meghan 12:21
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Collin Funkhouser 12:58
It talks about what this looks like in the adult walking and pet sitting world. But we also want to give some examples of some very successful businesses outside of our industry that have implemented these strategies and have done very well at it. For the selling on price marketing. I think one that comes to mind here is just Walmart, right? It's known for its strategy for offering products at lower prices than any competitor. It's the low price guarantee that they have. And they do this through these economies of scale scale, large scale purchasing, efficient supply chain management and abroad logistics network. Again, they're going big, broad, encountering a lot of different things, all of their commercials, their language is totally developed around low prices, more bang for your buck, more value. And this has positioned Walmart as a go to destination for millions and millions and millions of customers budget conscious or not leading to its status as one of the largest retailers in the world.
Meghan 13:53
So again, think of that funnel at the top you have like us that millions of people that are all going to Walmart because they are the cheapest. If you are going to choose this route, you need to make sure that you are able to scale maybe not just yourself but others on your team as well because you're going to be serving a lot of clients. And because there are so many hours in the day, you can only replicate yourself so much you cannot be doing 40 dog walks in a day. But if you have a team you can. So if you want to sell on price, you want to be competitive, you want to be affordable than others in the area. If you want to be the Walmart of dog walking in your area, then you are likely going to need to build a team it's not going to be only reliant on you because you can't do everything. A company
Collin Funkhouser 14:34
that sells on its features. Apple, Apple is a prime example of a company that sells on features and brand experience rather than competing on price. They don't even really think about that there's nothing cheap on the Apple website. They focus on their design, their high quality materials, their unique operating system, a cohesive ecosystem of products and services, the problems that they solve the pain relief that they give to potential customers that Apple has called activated a loyal client base willing to pay these premium prices for their products by emphasizing the quality and their innovation to them and getting people to buy into that vision that they have for themselves.
Meghan 15:11
If you choose to model after Apple, you're going to have a smaller funnel at the top, not as many people are coming into your business, but they're going to meet quality people that see the value of the higher prices and what they get from your company.
Collin Funkhouser 15:24
In a lot of our discussions and even seeing online comments and people's perceptions of their companies. We most of us want to be selling on features. We want to be problem solvers. We want to be tying into our clients emotions and their feelings and those experiences. But are we right? Can we be subconsciously selling on price? And when and here when we talk about selling? All we're talking about here is are we marketing on price? Are we talking about it on a Facebook post? Or when people contact us? Is the conversation about price? Do we pitch ourselves to potential clients? Or do we talk about to our existing clients about how price is so important, you may be selling on price if you find yourself offering frequent discounts or sales. By regularly doing this, you can shift the focus to price rather and actually away from the quality or uniqueness of your services. And by doing the frequent discounts, customers are going to start to expect these lower prices, and actually overlook the value of the features that you offer. Because you yourself are discounting those values, discounting those features. So the conversation, the perception moves away from features and onto price
Meghan 16:34
well, and when you do want to raise your prices for whatever reason, gas goes up, you can no longer afford to have the prices that you were or you need to grow and have a team and hire people, it's potentially going to be harder for you to convert your existing clients over because they are so price conscious that they may not take that journey with you.
Collin Funkhouser 16:53
Additionally, if your marketing materials, predominantly discuss prices, or compare your rates with competitors, it's going to give the impression that price is the main advantage to your service and the only thing that differentiates you at all, if you use language that emphasizes affordability, cost savings, things like most affordable rates in town or get more walks for your money. This again inadvertently shifts the focus to price. And all of this is really hard because we all know that as economies slow down as people's wallets and pocket books get tighter, we want to shift this conversation to price, we have to be careful with how far we lean into that. Because if people just buy into price when the price changes, or if the price is no longer an option for them, they're going to bail, we've got to do what we have to do to keep customers coming in and finding ways to connect with them. Pricing versus features is also in our mindset and our reaction. So if you look at somebody in your town, who is also doing dog walking and pet sitting services, they offer the same things as you do, and they lower their prices. If your first reaction is to also lower your prices, or also offer a discount to undercut them. It suggests that you view price as your only primary competitive tool, your only advantage. Instead of differentiating based off of the features or your service quality, you know things that make you different than that other person, you need to lean into those and not just simply rely on a pricing difference.
Meghan 18:24
So why we talked about selling at a lower price? What about marketing your price, if you are higher than most other dog walkers and pet sitters marketing at a higher rate versus a lower rate can have a big difference in the impact largely depends on the perceived value and the target market that's
Collin Funkhouser 18:40
really important here of that while we talk about pricing and high or low or feature set or not feature set, it really depends on the clients receiving that information, how you present your company should be done to connect with a very particular kind of audience. And many times as business owners, we get frustrated when we put out a marketing message. And it's not connecting with people or they they think they're hearing something different, or we're not getting the kind of people that we thought we wanted. It comes down to are we talking to the people that we expect to be talking to? are we sending them the right message? Or are we not or is it being received as it has been sent?
Meghan 19:21
When you market at a higher rate, the higher prices can create a perception of higher quality or exclusivity or premium service they're getting a lot for what they're paying for. Customers might assume that if they are paying more, they are receiving a service that is superior in some way. And again, when you target that premium client you are setting your higher rates and then attracting a clientele that is less price sensitive and more focused on the quality that you are offering and the range of services that you provide. You're also going to have increased profit margins higher rates can lead to better profit per client, which allows a more sustainable business model even if you have a smaller client base.
Collin Funkhouser 19:58
We talked about that top of funnel Well, is it really big? Or is it really narrow one benefit about selling on features and having that higher price is that you don't need a large funnel to have a sustainable business because the profit margins per service are much higher.
Meghan 20:14
When higher prices do come up in the conversation, you are potentially going to need to educate clients about why your rates are higher than everybody else or higher than some other people down the street. It's through your exceptional service your unique features that added value that is not easily found in others. The key here is to balance price with the value that you provide. If you charge higher rates, ensure that your service quality, the value, your customer experience in the proposition that you are setting up for your business are clearly superior. If you opt for those lower rates, then you're going to need to focus on efficiency and volume and maintaining a highest standard of service that disproves any perception of the lower quality people think cheap prices, lower quality of service, you're going to need to buck that trend. And make sure again, if you offer discounts it is in your budget that you can do that. It's important to understand your target client and their willingness to pay for the service you offer. If you want to go after the community aspect to the I am for everyone, then you are likely going to need to be more affordable than others who are trying to offer a premium service. Do your market research, get that client feedback and understand that the competitive landscape will help in determining the best pricing strategy for your dog walking and pet sitting business. But ultimately, you have the most say you are the CEO you get to make the decisions you get to call the shots. Whatever you want for your business you can do we'd love to know how you've implemented these or your thoughts on how they will work. You can email us at feedback at petsitter confessional.com. Thank you very much for listening to this today. We hope that it has provided some value to you. And thank you also to pet sitters associates for sponsoring today's episode. We will talk with you next time. Bye
