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The Cadillac vs. Honda Approach to Sales

Honda Cadillac Offer

Let’s face it: Small business owners are CHEAP. Getting them to open up their wallets for just about anything, let alone a piece of technology that they don’t understand and that might not have an obvious and immediate impact on their bottom line, is no small feat. However, that doesn’t mean you should give up and resort to selling inexpensive and low margin technology solutions.

I’ve worked with thousands of Partners over the years, mostly in the breakfix computer repair or managed services verticals. Most owners or managers of these businesses are technicians at heart. I’m no different. Folks like us like to have options. Unfortunately, a menu of options is NOT what your small business customers are looking for when it comes to technology purchases. Regardless of the technology service you are selling (virus protection, backup, managed services), you should NEVER have more than three different offers. In fact, I’d keep it to just two if possible. Resist your natural instinct to have an infinitely customizable offer at all costs. Believe it or not, the more flexibility you have, the more likely you are to lose the sale. Providing the customer a menu of options forces them to put too much thought into their purchasing decision. They end up saying, “Let me think about it.” We all know what that means: You’ll never hear from them again.

Simplifying your offers has the added benefit of simplifying your life, or at least your life as it pertains to your business. Fewer offers means fewer sales sheets, fewer SKUs and fewer things you need to know how to sell. Instead, you can focus on a handful of well-crafted offers that your customers can easily digest and you can effectively position. Less, in this case, is definitely more.

Here’s is my tried and true offer building process that can be applied to just about any service offering:

Step 1) Identify the services you currently offer or would like to offer. I like to think of each service as its own silo. Together these silos comprise the entirety of your services business. Some example service silos might be backup, virus protection, managed service/support, voice services, etc. Don’t be afraid to get rid of the ones that haven’t been performing well. Remember, simplifying your offers simplifies your life. It is within each of these silos that we will build our offers. You want to end up with no more than three offers per silo, but preferably you have just two.

Step 2) Next, for each silo, build what I like to call your “Cadillac offer”. Take the most basic form of the service you are looking to offer and think about what features and services you can put in place to add value from the customer’s perspective. To stick with the automotive theme, we aren’t looking to sell a useless underbody coating here. We want to bring additional value to the customer and higher margins to you. Don’t just offer virus software. Offer a virus protection service with monthly updates. Don’t just offer backup software. Offer a backup service with monthly test restores. You get the picture.

Step 3) Next, build what I call your “Honda offer”. Strip down your Cadillac offer to its most basic components. Just enough to get the job done and no more. It might not turn a lot of heads, but it’s dependable and will deliver what your customer is looking for. When it comes to pricing, be careful not to undercut your Cadillac offer too much. Making your Honda offer too inexpensive makes it difficult to sell the Cadillac. My general rule of thumb is a 30-40% differential between the two offers.

To see how I apply these basic principles to build out a simple managed backup offer that many of our partners use, check out the video on our website by clicking the button below.

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