Pricing Awareness | HVAC Pricing Series Part 1

Knowing the Right Price to use when you set a price for a job is difficult to determine. Will you be too high, or too low? Will you make any money? Will you be fair to your customers? Will you be fair to your company, your employees and yourself? Will you get the job? Will your competitors be higher or lower than you? Do you need the job to pay your bills?

And perhaps you always wonder about your pricing after you get the job. Could you have sold this job for more? Should you have added more profit to the job? Will there be ANY profit on this job? Will you even know if you made a profit? Will there be unforeseen problems on the job that will cause you to lose money? Will you get paid on time, or paid at all?

If you have asked yourself any of these questions, then you know there is really not any one perfect answer to know if your price is the “right price”. So, here are some situations to consider that could help you be more “price aware”.

Your pricing may be too low if:

  1. Your sales are steady or growing and your profit is dropping
  2. Very few people discuss or complain about your prices.
  3. You are popular with shoppers who are driven by price
  4. Many of your sales come from Yellow Page or mass marketing leads

Your pricing may be too high if:

  1. More than 20% of your customers/prospects discuss or complain about your prices being too high
  2. Your sales are flat or dropping
  3. Selling a job is getting harder to do
  4. People who buy on quality are asking you to justify your price
Pricing awareness can help you feel more comfortable with the prices you set for your jobs. If you find yourself in some of these situations, you can consider raising or lowering your prices to better fit your market at that time. However, as you will read in future articles, you should actually set your Right Price based on the financial constraints of your company. And you should use a repeatable mathematical formula to figure your correct Right Price on every job you bid.  Part 2 of the series, “What is the Right Price?,” will cover the 5 basic factors required for setting the Right Price.
Cal Berry
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