I started my moving business (Your Local Movers) in 2007 with a loan from my brother and an idea of what great service was. We entered the industry and competed at the low end of the market for the first two years. In those 2 years, we grew by nearly double every year and pretty quickly. I was in the office full time and working on the business rather than in it.
Gradually, we formalised our marketing a bit more and made our USP’s more structured. At the same time, we started advertising on comparison websites. You know the ones where you get five quotes and try and pick the company that sounds the least dodgy.
They sent more leads than we had ever had, but we had an issue. All the clients were booking with the cheaper companies. We couldn’t understand it, we had a professional looking and sounding business, better phone service, unique selling points when our competition had nothing in comparison.
Then something strange happened, we hired a new salesperson and she accidentally quoted a client 30% more than we had previously been charging. The client booked straight away. Then she did it again and again. So we upped our prices. Miraculously our conversion rates doubled. I was baffled, why would we be booking so much more work than the other companies when we were charging more?
I sat on the idea for a few days and after pondering this for a while, I decided to directly ask a customer. Their response was “We were happy to pay a bit more for professionals”. People didn’t believe we could offer so much more for exactly the same price. We realised our clients were and still are to this day, happy to pay for the peace of mind. Strangely the increase of price made us authentic to them.
It’s been a long time since we used a comparison website, but we still use this principle across all of our business and any new products. It has made the business more profitable and allowed us to introduce better service and guarantees. We test the theory from time to time and always come back with the same results; the right clients want the right service and are happy to pay us for it.
In hindsight, we probably would have stopped growing at that point if we had continued to compete with the same lower end companies for the same clients. We have a saying at Your Local Movers “The right clients, treated right”. We now know if they don’t want to pay a slightly higher rate, they don’t want the quality and level of service that make us different. So we aim our marketing, sales and delivery processes at getting these clients, giving them what they want and charging them the right price to do it.
