When you
walk into a store, all you need to do is look at an item tag to learn how much
something costs. It’s simple, easy and most of the time, accurate. But when
you’re in a service industry, how much the job costs can depend on each
individual situation. It's difficult to have a set price tag for many jobs
since each situation has it's own set of unique factors. As such, being mindful
of price accuracy becomes an imperative facet of doing business. If you are in
the service business, asking yourself a few basic questions can help keep
pricing as correct as possible while still helping your business stand out from
the competition.Do you have to take into account unique situations?
Not every customer issue or job is the same, especially if your business provides repair services. There are a multitude of reasons an air conditioner, valve, electrical outlet or dishwasher could malfunction. The same problem in two different situations can have different prices depending on factors such as depth, access or complexity. The same concepts apply to landscapers, carpet installers, painters, etc. Every situation is unique in it's circumstance and the price can range significantly depending on many factors.
Time and material pricing is easy to count and add up but customers appreciate up-front pricing (so there are no surprises) which adds to the difficulty. Many factors come into play here especially considering the fact that one person's time may be more valuable or productive than another. The important thing is to ensure that your staff realizes the nuances of your work and tries to maintain consistency as much as possible. There is nothing more annoying to a customer than to find out that they have paid different amounts for what seems to be the same task. For this reason, properly describing the details of your work is imperative. This is done through an up-front agreement detailed by a trained technician who has received this specific instruction.
Employees need to understand that an endless range in pricing options stems from the existence of just as many combinations of customer issues and job complexities. As long as employees truly understand the importance of consistency, pricing can remain fair and competitive. Doing so positively impacts your business. We know that beauty is in the eye of the beholder right? The same concept applies to many repair jobs.
Are you performing supervised price verifications?
The best way to monitor pricing in service and repair businesses is to have managers and supervisors consistently reviewing and approving them. This way you narrow down the number of opinions to those with the most experience in monitoring prices.
Whether each task comes with its own price point or your services completely depend on the job's situation, having your employees verify pricing could mean the difference between a lost customer and a life-long advocate of your business.
Nobody wants to feel like they’re being ripped off. This is especially true if the end price is substantially higher than what the customer was originally quoted. All of this trouble can be avoided by giving up-front, flat-rate, bottom-line pricing approved by an experienced supervisor. Instilling the importance of price checking is one way to be sure your employees are being thorough and avoiding any misrepresentations. A simple, 5 minute phone call with a supervisor is all it takes to ensure that each price quote is accurate, approved and verified.
Are your prices competitive?
Finally, be sure to shop around as if you were the consumer. Price out your competition and keep your prices relative, or better. Be mindful of any advertising and marketing specials that are being run by your competitors. This becomes even more important if your competitor is offering first-time discounts, seasonal rates or rebates. By staying in the know, you’re giving yourself a head-start at remaining above the curve, especially if your industry has many competitors.
Although each situation may vary from job to job, remaining as precise as possible can make all the difference in customer satisfaction. By staying mindful of industry trends, pricing and understanding that your client situations are unique, charging customers accurately can be an easy and standardized process. When establishing your prices, know your costs and remember that your goal is to stay profitable while maintaining repeat business. If you are the cheapest in town and not making a profit, you cannot make it up in volume!
