Your quality prices should reflect quality products. You wouldn't cheat your customers, so why cheat a wonderful product that will keep homes and businesses comfortable for years?
Your customers get what they pay for, but what if you're short-circuiting a quality product and thus, sacrificing its perceived value? Too-discounted prices could hurt your business and here's why:
So many companies go into bankruptcy because they fail to evaluate their profit line. No matter how much you sell, it's the price you sell it at that's going to make all the difference. Follow this formula when pricing:
(All installation costs) + (desired gross profit) = selling price
Most people recognize gross profit as sales minus cost of sales, but gross profit also equals overhead costs plus desired net profit. The key to successful pricing is to recover overhead and then plan for profit in the selling price. Profits provide the capital needed for growth.
Price-conscious customers need an extra push that doesn't necessarily have to do with the price tag, but has more to do with value. Offer extras such as:
- Preferred customer hours
- Emergency service
- Free one-time maintenance or a discounted agreement
- Free estimates or whole-home evaluations
Don't be tempted by a competitor's seemingly popular low price - it'll produce great dividends for you once they can't produce such a flashy offer.