The public sometimes has difficulty understanding the value of your services.
How often have you encountered a customer who balks a little at your pricing on a job, especially something like a drain clog that takes 30 minutes to clear? You know you’re offering a fair rate when you consider your expertise and overhead costs like equipment and employee salaries. But all the customer sees is something that appeared to be fairly easy to do accompanied by what they view as a high price tag. They feel a little ripped off.
Armando Ramos, whose company is featured in this issue, actually got into the industry off this dichotomy between drain cleaning and public perceived value. While working in maintenance at an apartment complex, he took note of the prices being charged by the drain cleaning techs who would come in.
“They would take maybe 30 or 40 minutes to unclog a drain and then charge $250, which seemed like a lot of money to me. It opened my eyes to the opportunities,” Ramos says.
That’s what prompted him to charge only $50 per cleaning as he got started in the business. It helped him gain some market share in the beginning, but in time Ramos realized that it was unsustainable.
“I went really low with my prices to be competitive,” he says. “I was proud of telling people that I did the same thing as other contractors, but for a much cheaper price. But then we had a hard time paying the bills. Charging people too little for your services is one of the biggest mistakes a business owner can make.”
Know your worth. You provide a valuable service to people, and you deserve to be compensated appropriately for it. It can be tempting to fall into the cost-cutting trap in a competitive business environment, but that approach only worsens the public’s perception of the value of your services and hurts the larger industry. Plus, any company with that mindset likely won’t be able to stay in business for long as they struggle to provide quality service on slim profit margins.
Of course, knowing your worth is only half the battle. You have to also be able to express it to your customers so that they understand the value they’re getting for their money. Then they won’t blink at whatever price you’re charging. Easier said than done. The Better Business feature in this month’s issue by Anthony Pacilla covers that topic some, highlighting things you can do to make sure customers feel that they’re getting their money’s worth.
There may still be a disconnect on pricing with some customers no matter how exemplary the service you provide is or what you do to educate them. There are people who simply get stuck on what they think a certain thing should cost. Just be sure you don’t accidentally get caught up in that same mindset. Remember, it’s OK to charge the proper value your services are worth.
Enjoy this month’s issue.
