BUSINESSNEWS
‘ understanding and setting price expectations is the key both to winning the job and completing it profitably ’
EXPECTING THE RIGHT PRICE
Virtually everybody has an expectation about the quality of the work that will be done , but they also have an idea of how much they expect to pay . Everybody hates being surprised by the price , so it is critical that you get your customer already thinking in the right ballpark before they receive your quote .
Asking them how much they expect to pay and expressing strong scepticism if they are way out is one way to do this . It ’ s been done to me . If you don ’ t do this , your customer can angrily reject your proposal . Then they can then inexplicably go with a more expensive competitor simply because you didn ’ t meet their expectations .
So , understanding and setting price expectations is the key both to winning the job and completing it profitably .
The problem is that the first approach makes you poor immediately along with problems with staff turnover . The second makes you both miserable and poor . That ’ s because you will never get recommendations . You will also get disgruntled customers some of whom won ’ t pay . Others will hassle you with complaints and demands for remediation . After disappearing under a mountain of unpaid bills and visits from trading standards , most people see that this approach doesn ’ t work .
Instead , competing on value is not only about doing a quality job , it ’ s about convincing the client that this is what you will do . Around 90 % of customers will want the job done properly rather than done the cheapest . Matthew Stevenson of Bespoke Outdoor Spaces says : “ I always tell customers that we won ’ t be the cheapest , but we will be the best value ”. Mark Goodchild of Electriccall . net agrees : “ The aim is always to do a quality job and be highly responsive to the customer . In the last 12 months we haven ’ t received a single complaint . However , don ’ t try to compete on price as you can ’ t do that at the same time as providing a great service ”.
It ’ s a fact . You can charge more if you do a quality job . Just keep in mind that every interaction that the customers has with you and your business will convince them more or less that your quality will be great . Uniforms , smart vans , tidy appearance and being totally professional will help . So will great looking quotes produced very quickly . Rusty old vans will do the opposite .
Membership of your trade association , information on experience and qualifications plus customer testimonials backed up by pictures of previous work all helps . Bespoke Outdoor Spaces web site at bespokeoutdoorspaces . com is an example of how to create a great impression .
If you give a more specialised service then this also provides a reason for premium pricing . It ’ s also a more efficient way of attracting new customers . One installation business I know attends emergency call outs within one hour , whatever the job is . This establishes a fantastic bond with these customers who immediately trust them . It ’ s their marketing approach for recruiting new customers . And it works . With trust already established , they don ’ t have to compete with others for the next piece of work .
Some companies even take such a strong line on avoiding price competition that they won ’ t quote if they are in competition .
AVOID THE PRICE-OBSESSED
Price-obsessed customers are often the most difficult . If they always want a “ deal ” they are frequently unreasonable about other things . As they say , they see the price of everything but the value of nothing . They probably drive a Dacia Sanderos . It ’ s better that you let your competitors service them .
A PROFITABLE BUSINESS
Have you ever completed a job where your customer would have been happy to pay more ? That ’ s called leaving money on the table . That ’ s where you haven ’ t got your fair share of the value of your work . Hopefully , there are some ideas here to help you avoid this fate .
Alongside doing great work , pricing correctly is the key to growing a business and maximising profits . All the best in your endeavours .
About the author Benjamin Dyer is CEO and co-founder of Powered Now . Powered Now ’ s mobile field service management software takes the pain out of admin and paperwork for installers and other trade businesses .
www . powerednow . com
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