7 Counter-Intuitive Ways To Use Flat Rate Pricing

BY: Joe Crisara

Good Money After Bad

Pricing jobs by parts and hours of labor is like throwing money out the window.

The cost of most parts in the plumbing, electrical and HVAC worlds are astonishingly low compared to the reliability, safety and health you provide to your customers. Many of your field service techs often get major repairs or replacements done relatively quickly, often within a couple or few hours. Compared to the immense utility and benefit being given, your company collects very little revenue.

You cannot just make up the discrepancy by stating an incredibly high hourly rate, as customers have a ballpark idea of what people charge out there. When your plumbing business charges the same hourly rate as a corporate attorney or top tier computer systems programmer, customers are going to walk away, be resentful or write horrible reviews on Yelp. You need to have a pricing method that makes good sense to the customer and reinforces to them (and to yourself) the considerable value proposition that you offer.

The pricing method that will bring in the revenues and profits you deserve is called flat rate pricing. However, when instituting a flat fee policy, it is easy to stumble on the various pitfalls that exist which will seriously harm your bottom line. The following guidelines are essential to maximizing your pricing policy to run a successful service business. Continue reading “7 Counter-Intuitive Ways To Use Flat Rate Pricing”

Ten Ways to Avoid Price Objections

BY: Joe Crisara

The concept of value-added selling has been a popular one for a number of years. In fact, in today’s contracting world you are left with two choices.

1.       Provide excessive value for the price that you charge.

2.       Charge a cheaper price for the low value you provide.

That’s right, the natural laws come into place here. In the world today the buyer will either force you to either provide more value to get the price you need. Or they will force you to lower your price if you refuse to raise your value.

There is no doubt

Without value-added components, any product or service can be driven down to the most bottom line – price.

What is the problem with that?

When you are only selling price, you’ll never be able to make high margin sales where profitability, long term growth and sales success reside. Let’s take a look at 10 ways how you can add value to your product or service, no matter brand of equipment you sell.

Some salespeople might argue by saying, “You don’t understand, my product is different,” or “My service is different.” The truth is that every product or service can have value added to it. Let’s take a look at 10 specific ways that you can do this:

1. Providing expert advice and a high level of professionalism. Lots of professionals are paid a tidy sum for the level of advice that they provide. However, for you as a home comfort sales professional, in order for you to be able to provide value, you need to understand that you have to provide a level of advice that is significantly higher, more sophisticated and more valuable than that of your competition. Plus, you have to be able to communicate this to your prospect in a meaningful way. What this means communicating to your prospect a higher level of sophistication, wisdom and understanding about what it is you do. In a nutshell, why are you different and better than your competition? Odds are you have already purchased things like IAQ monitors, Infiltrometers, duct blasters and heat exchanger cameras. Now know when to use them. By all means, do use them.

2. Bundling and packaging. I’m not only talking here about the way your product or service actually looks. I’m also talking about desirable packages, purchasing levels and a series of added benefits that are significant in value and are, themselves, a whole lot more valuable than simply the product is by itself. Clean air packages, Silent system packages etc. Continue reading “Ten Ways to Avoid Price Objections”

Avoid Creating Your Own Personal Recession

BY: Joe Crisara

 

Let’s be honest– completely separate from how you run your contracting company, there is a thing out there called the economy. I’m talking specifically about the macro economy. Macro means big and that means the economy on a regional, state wide or national level. There are many factors that go into the condition of the macro economy- the cumulative effects of millions of decisions by consumers, producers and investors- but you yourself are unable to have almost any effect on it.

It is what it is, and like a boat floating on the waves of the ocean, your best bet is to keep an eye on what kind of weather is coming, so you can adjust your sails accordingly. There are things you can do to protect the financial viability of your home contracting business in tough times. Just as, conversely, there are things you can do to accelerate a downward spiral as cooler economic times approach. The idea is to cultivate the former while eliminating the latter.

GO TO THOSE YOU KNOW

Especially in an economic chill, go to your existing (which includes previous) customer base. They will provide a very worthwhile foundation from which to gain jobs and increase revenue. In the home contracting industry we often think that all of our next client interactions and paid work contracts need to be brand new people we’ve never seen before.

But so often, a good former customer can become a return or repeat customer. Sometimes it just takes reaching out with a check-in and an offer of a home inspection, or the suggestion of replacing old wiring and outlets or pipes and washers on the verge of cracking.

Your overhead will stay pretty much the same regardless of how the economy is doing. So you may as well go back to your existing customer base and see what they need- leaving no stone un-turned and really maxing out your interactive customer service.

But what about when you’ve tapped everyone you know?

IT’S A PEOPLE GAME Continue reading “Avoid Creating Your Own Personal Recession”