“It’s just not done in our industry”
“What happens if my competition sees it?”
“All our pricing is custom, nothing is standard”
“We always done it this way, why change now?”
All of these are answers that management company executives have given for why they choose not to post their prices publicly on their websites. In fact, here at TOPS, we used the very same excuses for why we also did not publicly publish our own pricing (until now!).
Every business owner knows their product is valuable. You deliver a service, and you know that service is top notch, so you charge what the service is worth. However, putting your prices out there for everyone to see before they have had an opportunity to talk to you about it, or before you have had a chance to make your value proposition may seem like putting the cart in front of the horse.
Why We Hide: A Vicious Pricing Cycle
Community association boards are notorious about looking for a lowest cost solution, even to the detriment of their community. The simple truth is homeowners don't want to pay any more to the association than they absolutely have to, and boards know raising assessments is an unpopular decision that could get them voted out of office. So many communities simply don't have the budget to pay a premium for quality management services.
Many management companies cater to this mentality by charging rock bottom prices that are not sustainable to their costs. To make up the difference, these management companies wind up having to bill for every little extra, or bring on other high profit centers to bring in additional revenues. These extra charges hurt the community in the long run because they weren't budgeted, so they go looking for a new, cheaper management company, and the whole vicious cycle continues.
If you are caught in this cycle, it's easy to get discouraged. It may seem that there is no solution, no end in sight, no way to get off the merry-go-round. If you want clients, you have to lower your prices, and if you lower your prices you cannot afford to provide the services you offer. But what's really happened is you have DEVALUED your services in the eyes of the client.
One way to bring back that value? Be open, up front and unapologetic about pricing the services you offer.
Some smart management companies have stepped off the merry-go-round and chosen a new route. Open pricing that accurately reflects the labor involved, and trusts that the boards and the homeowners are smart enough to recognize that difference. I mean, let's be honest, if a client is willing to leave you over a few cents on the per door price, were they ever really that good of a client in the first place?
Own the Price Conversation
Consumers have been trained from a very early age to look at price to determine value. That restaurant that lists the price on the menu for lobster at Market Price? Must mean the lobster tastes amazing! That rock bottom priced used car? Must be something wrong with it. Regardless of how true either of those theories might be, the buyer's perception is what matters here.
According to the Harvard Business Review (https://hbr.org/2015/03/making-the-consensus-sale), "customers are, on average, 37% of the way through a purchase process by the time they reach the solution-definition stage, and 57% of the way through the process before they engage with supplier sales reps."
If your potential clients are already half-way through the decision making process before they even engage, you need to insure that your company is in the running early. Every buyer is trained to search for price as part of their purchasing decision. And they'll continue searching until they find a price. And if it’s not on your site, you're not part of the price conversation. That means your competitor is setting the expectations and presenting their value over yours. If there's a price discussion going on anyway, you need to be a part of it. It's up to you to own the price conversation.
Make Your Value Proposition
Now, we're not advocating just putting your prices out there and letting them speak for themselves! You've got to prove to the buyer the value that your prices represent. You've got to provide CONTEXT. Remember that the price is just one factor in the buying decision. Even if your price is higher than your competitor's, only you can provide the context in the buyer's mind as to why it's better for them in the long run to choose your offering.
A common saying in sales and marketing is, 'People don't buy products, they buy better versions of themselves.' it's used to illustrate the value to the consumer of selling the benefits of a thing, rather than just the features. Think about the services you offer. Let's say you attend board meetings. If you put that feature on a list of services you provide, your potential client will gloss over it.
Why? Because everyone else is saying the exact same thing. That's why you have a seat at the table in the first place, because you provide the basic services.
So how can you show that your company does it better - that there is a higher value when your people attend board meetings than when your competitor does it. Do your managers take the minutes? Are your people trained in parliamentary process? Those are your features. Next, you need to turn them into the value proposition by tying them to what it does for the potential client. Maybe, because your team is trained in parliamentary process, board meetings are, on average, 20% shorter than the average meeting because you are able to insure everyone stays on task - that's a benefit the board can get behind. Everyone wants more time and shorter meetings!
Here's a little exercise to help get you started:
Brainstorm with your team (or simply ask your existing clients) what problems you solve for your clients. Why were they looking in the first place? What challenges were they facing? What was causing them pain? Write down at the top of a piece of paper or whiteboard: "We help community associations who..." then add each pain point in a bullet point below. Take that intel and turn it into a few well-crafted sentences that show your prospects the benefits they will gain from choosing you over your competitor. The resulting paragraph goes on your website along with your pricing.
Give Social Proof
Instead of simply listing your price, use it as an opportunity to address anticipated buyer reactions like sticker shock, turning their early research into an opportunity to address their concerns.
Nothing shows value more clearly than someone else talking about the benefits they achieved from your service. We humans are social creatures who crave affirmation that we are making the right decisions. That's why it's important to provide social proof as to why your prospect would be making a good decision to go with you.
Social proof can be presented in many different ways - testimonials, logos of your other clients, case studies, even reviews. Try to show actual results. A before and after example of how a community has reduced meeting times or improved delinquency levels is a much more concrete and powerful testimonial than one that just says we love our management company.
Change the Status Quo
As mom used to say, "If everyone jumped off a bridge, would you?" Doing any action just because everyone else is doing it does not mean it is the most successful way to do that action. The true disruptors, the innovators, the people and the companies who have gone down in history for their success did it because they bucked the system. They dared to be different.
Posting prices may not seem like a revolutionary act, but if doing so can help to change the attitudes of community association boards to recognize the valuable services community management companies provide, it is absolutely essential to the future success of our industry.
In truth, there is no right answer for everyone. If you're finding more and more that the conversation you're having is less about what the value of your service is, and more about "just tell us your prices," maybe it's time to consider public pricing! Don't be afraid of going against the status quo and trying a new method to foster progress.