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Why competing on price could kill your business

Why competing on price could kill your business

Standing out in conveyancing can be incredibly difficult, so it can be tempting to compete on price. Donna Fuchs Conveyancing has managed to build a solid reputation through quality customer service, cost transparency and business efficiency. This is how Donna and her team did it – and how you can too.

As in any competitive field, conveyancing businesses face significant temptation to lower prices to the detriment of service. However, it’s all too easy to find yourself in a race to the bottom. Donna Fuchs Conveyancing has shown that businesses who avoid a price-cutting strategy and instead focus on delivering customer value can end up head and shoulders above the competition.

Donna Fuchs founded Donna Fuchs Conveyancing four years ago, after more than 20 years’ experience in conveyancing. What was initially a one-person operation has now grown to four staff and larger premises. Donna started her firm with a pledge to focus first on delivering a premium service in order to avoid competing on price. But even though she had more than two decades’ worth of industry experience, she faced significant competition from a market that was keen on racing to the bottom. “You pay peanuts, you get monkeys,” she says.

Put it all on the table

Donna prides herself on being transparent with her customers around price. She sets herself apart from many other conveyancers with her approach to giving quotes. When Donna first branched out on her own, one of the first challenges she faced was that many consumers felt short-changed. Their experience with other conveyancers, who at first quoted a low price but kept adding extras to the total price, meant they were hesitant. Donna took a risk by quoting her entire price structure up-front. “When I first opened, I was tempted to cut my prices because I was worried that if I didn’t, the next client wouldn’t come along. But I’ve learned that you don’t need to cut prices if you provide a good service," she says. “Sometimes it scares the customers off, but others who have been burnt in the past are happy to know everything up-front."

Go above and beyond

Donna says she also aimed to differentiate herself by providing service beyond what competitors were willing to give. She uses technology to help her with this. "I have had a few clients watch their settlement take place on the SettleMe app. They can watch the settlement process take place online. Settlement money is distributed immediately and it's no longer necessary to wait for cheques to be manually banked and cleared," she explains. "It's great because everything happens quickly." But the biggest complaint she hears is that conveyancers her clients have previously worked with were too hard to get a hold of. In response to this, she started giving out her mobile number to clients and invited them to call whenever they had a question – even on weekends or when looking at other properties. “Most of the other places I worked for often chipped me because they complained I did too much for the client, and we weren’t getting paid for it… but I offer my mobile number to my clients for after hours enquiries, so if they’re looking to buy a property, I can answer their questions and review an electronic copy of the contract to make sure there's nothing nasty before they sign.” “A little bit of reassurance goes a long way. I treat customers like they’re my best friend, and I want to make sure they’re happy. A happy client is going to tell everyone about your service.”

Cut costs, not prices

Finally, Donna's firm has always focused on business efficiency. She started out by setting her prices, then focusing hard on finding cost-saving measures so she could avoid passing cost increases on to her customers. This means her prices have remained the same for four years, but her margin has grown. Focusing on greater efficiencies through digital transformation is a big help, she says. “Electronic settlements have been great, and it just cuts down time.We could be on hold to the banks for an hour and a half… whereas with PEXA we can send a message and they get back to us fairly quickly.”

Put quality service first

It’s not easy to set prices higher than the competition. But Donna says businesses need to avoid racing to the bottom, and instead, push themselves to go beyond the call of duty. “If they’re cutting their prices, they’re making nothing of it. And if they have to cut prices that much – are they providing a quality service?”

Interview with Donna Fuchs 

Author: Patrick Stafford

Patrick Stafford is a copywriter and journalist from Melbourne, Australia. His business, Stafford Content, provides premium copywriting services to business clients of all sizes, including sole traders and entrepreneurs, across a huge range of industries. 

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