Competing on Price, Quality, and Service: Can You Have Your Cake and Eat it Too?

John Tabita

In my last article, Price, Quality, or Service: Pick Two, I said that that no business can successfully or consistently provide the best service and the highest quality at the lowest price. Companies must choose which two on which to compete. I also hazarded a guess that most of us here have chosen quality and service—whether unconsciously or by deliberate choice.

What I’m about to suggest is controversial. But suppose, in addition to targeting relational buyers with quality and service, you could also target transactional buyers by removing either quality or service from your sales process and competing on price? Here are a couple of thoughts.

Competing on Quality and Price

Much of the expense in web development is the time it takes to meet with the client, spec out their requirements, wait for the content, and revise the content. Suppose you stripped that out of the sales process by automating this process with a do-it-yourself questionnaire the client completes on his own time. There would be no on-site meetings. Updates and changes are charged extra.

The challenge here is to completely automate the service process and not get sucked into any consultation. Getting caught into a consultative sales process with price-driven clients is a losing proposition, so your questionnaire must be thorough and include FAQ’s and so forth. Communication and support would be limited to email. You may also consider offering templates rather than a custom design, so long as your customer is aware of this.

This could work well with clients who are looking for a basic, entry-level site, for whom the consultative sales process would be overkill. This may appeal to those concerned with getting a quality product at a good price and are willing to sacrifice the personal attention generally associated with a service like web design and development.

I found myself in this position on more than one occasion—usually with someone who was recommended to me but didn’t have the budget or the need for my typical custom-built site. Rather than lose the deal, I’d offer a lower-priced, template site that didn’t require significant up-front consultation.

Keep in mind that these clients, if satisfied, can turn into a higher-end client in a few years as their needs evolve. You also have the opportunity to “drip market” to them through your newsletter or blog, educating then on what else is possible beyond having a basic website, and how you can provide these services when they’re ready to take the next step.

Competing on Service and Price

Do-it-yourself online website builders have become the bane of the modern web professional. If you haven’t lost a potential client to one of these services, don’t worry … you will.

These companies compete on service and price. What suffers is the quality—because the client, not you the professional, is the one creating the site. (Don’t get me started on the code the software writes.)

What these companies do excel at is customer service. The few I’ve dealt with have courteous, professional customer service reps willing and able to walk you through any problem you encounter. This appeals to the type of transactional buyer who’s willing to sacrifice his time in order to get the best possible price. That’s because he doesn’t consider the time spent building the site himself as part of the overall purchase price.

I seriously considered adding this to my offering at one point. As I pointed out in a previous article, you will often get inquiries from people who have no clue what’s involved in web development and assume a website should cost “around $300.” I think it’s perfectly okay to pass on these types of prospects. But suppose you could bring them into the fold and make them a customer, with a minimum amount of effort on your part? Why turn them over to a build-it-yourself website company when you could be that company? (Can you say “residual income”?)

There are plenty of companies that provide private label website builders that you can re-brand with your look and your domain. Imagine having 50 or 100 of these customers at $6 a month.

Keep in mind that, if you choose to do either or both of these, you’ll be somewhat of a commodity in the markets you’re targeting. If your quality or service is merely equal to that of your competitors’, your customers’ primary buying criteria will be price. The challenge is, how can you set yourself apart by providing superior service or quality? The good news is, you’re probably already doing so now, with the clients you already have.

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  • johans

    All these options are plausible but lead you into the fatal trap of loss of focus and so I think contradict your previous article/advice – choose 2 and focus. To make either of price-sensitive options deliver the volume they require to make them worthwhile will need focus:

    Want to use templates and forms to gather input – to do it well will take focus what information to gather and attention to designing the forms.

    Want to use site builder and customer service – to do it well will take a good SAAS solution and focus on 24×7 customer support.

    • http://smallbusinessmarketingsucks.blogspot.com/ John Tabita

      You make a good point about focus (which is probably why I never went the online site-builder route).

      I wasn’t necessarily advocating you try all three approaches, but it’s not much of a step to provide high-end custom sites (quality and service) and still offer entry-level template sites with minimum consultation (quality and price) without losing focus, IMO.

      If I had considered the site-builder option when I still had my 2 partners in business with me, I think we could have pulled it off. But going it alone would’ve presented more of a challenge.