Earlier today I heard a wonderful exchange between Mark Stiving and Reed Holden (of Pricing with Confidence fame) on Mark’s Impact Pricing podacst
I’ve lifted the following [short] transcript, of part of their conversation, straight from Mark’s website (with all credit to Mark)
Reed Holden: It would be fair to say that dirt is a commodity. Yeah. What David did is he went out and had a conversation with the customer. So David asked a couple of questions. He said you know, what do you really need from us? And he goes, well, Geez, you know, we spent a lot of time waiting for you guys to fill up the trucks. Well, why is that important as well? Because it’s costing me a hundred bucks an hour to get through your facility. Well, how would it be valuable? Who cut it in half? So sure it would save me 45 bucks an hour, 45 bucks an hour, a 16-ton truck works out to about 253 bucks a ton. And what they did is they implemented a, what I’ll call a flanking gate strategy and when you want it to the quarries that were two gates. At gate B, there was a line of trucks. At gate a, there was no line of trucks and there was a d five dozer sitting in there ready to load up the trucks. And so a sales guy would go in and have a conversation with, you know, a cement contractor or an asphalt contractor who were the primary customers. Think about it. Cement and asphalt contractors all have to bid in order to win the business. So it’s a very price-oriented business and the sales guy would go in. Then the contract will say how much, how much is your dirt today? And the sales guy would say it’s gonna cost you 11 bucks a ton. And the guy would come in said, well you have a competitor in here at 10 50 the sales coach, oh are we can meet 10 50 in fact we can meet 10 25 but you have to go through gate B and the quarry and the contracts, what’s gate B? It just not services fast. And the contract will quickly calculate that they would save money by paying a little bit more for the dirt. And you know it’s, we use it as, I mean we’ve extended that to professional services. In fact, we’ve done a lot of global work and extremely high-value professional services and both consulting and financial, the legal business. But you know, the commodity story tells it all because it, if it works in commodity, I guarantee you it works in the high-value stuff. But hit it with a simple conversation.
to which Mark replies:
Mark Stiving: Dirt. You’d think we’re selling dirt. But in truth, we’re not selling dirt. We’re selling a solution to a problem which includes using the truck as efficiently as possible as we’re delivering dirt to our customers.
So my question to you is this: ‘Is your law firm selling dirt, and if it is, what’s your solution that goes with it?’
As always, interested in your thoughts/views/feedback, but whatever you do listen to the whole episode here.