Associations
STANDARDS IN PRICING
By the South African Refrigeration and Air Conditioning Contractors Association ( SARACCA )
Competitive pricing has evolved . As more players enter the market , businesses are subjected to cost and time pressures in order to beat the competition .
In addition to the competitive environment , the economic fallout of a global pandemic includes sharp price drops , excess capacity , and heightened price sensitivity which ultimately destroys value . The risk now lies in becoming too aggressive in pricing , resulting in little returns compromised on the quality of installations .
How can you eliminate pricing risk and still maintain the competitive edge ? The answer is to give equal attention to quality , project management and pricing . While appearing to be a simplistic approach , businesses that offer reliable , quality service and good value are always in high demand . On the other hand , companies that offer cheap pricing but skimp on quality suffer from short-term profit and long-term decline .
It ’ s an age-old lesson that too many of us choose to ignore . Although sacrificing quality for pricing may grant you some quick profits , you ’ ll quickly run out of steam when clients fail to return . Favouring quality over pricing will increase your company ’ s reputation and product loyalty , which will keep your business sustainable .
WHAT IS THE SOLUTION TO THE RISK ? Become aware of regulations and remain steadfast in offering quality installations , even if this is at an increased price . Sacrificing installation quality merely to outbid your competitor is not only dangerous for your client but for your business reputation and sustainability .
SARACCA believes that the focus on quality is essential . It is up to the client and consulting engineer to select HVACR companies based on the scope of work required as opposed to costs alone .
WILL CLIENTS PAY MORE FOR BETTER QUALITY ? Absolutely yes , but the client needs to be made aware of the pricing shortfalls . Making the risks that are involved in working with high pressures and certain gases clear will discourage a client to choose cheapness over safety . Communication with your client is essential to ensure that they prioritise the quality of installation .
SARACCA membership selection is based on quality , reputation and value of work . Now is the time to focus on quality , while remaining realistically competitive . It is not worth the profit ( if any ) to work on projects where standards have been sidelined for cost .
Members of SARACCA are informed on a regular basis on quality standards , as well as new laws and regulations governing the industry . It is vital for all HVACR practitioners to be registered with SAQCC Gas , a benefit of SARACCA membership , and attend informative meetings .
Forbes Business Council recently posted their top 12 pricing strategies * recommended by a panel of experts made up of successful entrepreneurs and business leaders . One technique emphasised value-based pricing as opposed to cost-based as critically important for long-term success . Becoming skilled at quoting while remaining competitive is a tool all HVACR practitioners need to build their reputation and remain in business .
* More information on this complete report is available online . RACA
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www . hvacronline . co . za RACA Journal I April 2022 11