Brian Smith | Crain's Washington D.C.

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Brian Smith

Background:  

Carroll Water is a commercial and residential water treatment and well drilling company that serves customers in Northern Virginia and Central Maryland. Family owned and operated since 1983, Carroll Water recently acquired Meadow Brook Water Service and G Edgar Harr Sons’ Corporation, the region’s leading well drilling and water pump provider.

The Mistake:

Years ago we made the assumption for the customer that they want the cheapest product for the cheapest price. People don’t always want that — they want to buy the best product for a fair price.

There’s one story that we always go back to that my father experienced. About 20 years ago, there was a customer who we’d done other service work for at their home. The customer was interested in a water softener, and my father gave him a quote. A couple weeks later, my father came back and talked to the guy. The customer told him, “I bought something from somewhere else.” My father asked him why, and the customer said, “Well, the guy came out and went into great detail about the product, and the benefits, and how it would be installed. It was more money, but I had him install it.” And my father said, “Hey, we could have installed the same thing for a cheaper price,” but the customer elected not to do that.

The other company came out and built the most value around their product. The customer wanted value instead of the best price.

The customer wanted value instead of the best price.

The Lesson:

It wasn’t about just installing a commodity for a certain price — that’s something we’ve gotten away from in the last 20 years. Everyone wants to try to advertise that they have the lowest price and they’re the cheapest, and we learned that’s not what customers want. They want quality and they want value.

We’ve gone to a different model. We became an EcoWater dealer because they’re the largest residential water treatment manufacturer in the world and they’re a top-of-the-line piece of equipment. That really differentiated us from our competitors. Now we sell top-of-the-line equipment and can build more value and separation between the standard water treatment. Not everybody can sell this equipment — we’re the only company in Northern Virginia and Central Maryland.

We’re able to send someone specifically out to test a customer’s water, do a comprehensive analysis of their water and system, and recommend what is needed. We have dedicated people for that. Instead of just sending the people servicing the equipment and leaving a price, now we have specifically trained people who are educated to go out, do a needs analysis and propose the best solution.

Since becoming an EcoWater dealer, we were able to absorb that approach and be more profitable at it. Business has increased dramatically; when we made the decision to become an EcoWater dealer we employed five or six people, and now we employ 45 people.

I used to get discouraged when I would walk around the home improvement shows and see all the other water treatment companies selling the same thing that we were selling. We wanted that differentiator. With EcoWater, we now had that huge differentiator. We could sell what the other companies were selling, but no one could sell what we’re selling.

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