Central Turf & Irrigation Supply

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Don't Be Afraid: Raising Your Prices Often Makes Sense

Some contractors think pricing is a game of trying to outguess the competition in order to submit a successful low bid.

While focusing on being lowest is an approach, it's not always the right thing in every situation.For example, if demand is high, both the low-priced and high-priced contractor will operate with a full schedule. You need to be paid fairly for the work you do!

So what are the times when you should always be looking to add an extra factor to your quotes?

When your schedule is filling fast. Why take work at low prices if you're already booked? The next jobs you add to your list should be full-price contracts with firm down payments. With customers opening their wallets at the start of a season, there's plenty of work around to keep everyone busy. If you're always too busy, raise your prices.

When you're working for a "tough customer". Working for an owner who thinks he knows how to do the job better than you? Or how about a general contractor who is slow pay? When your gut tells you this will be a "tough customer", you're right. Charge more. If they don't hire you, your competitor gets the grief, the employee motivation issues and the worn-out equipment. If they stay and pay the up-charge, you're compensated for the extra effort.

When the customer values your reputation. Isn't it interesting how the best contractors always charge the most? If you are a top-performer, your services will sell for a premium. Customers will pay extra for convenience, results, peace-of-mind and reputation. If you have four-star quality and white-glove customer care, you don't need bottom-line pricing. Be sure you do have a plan to explain and demonstrate your differences in your bid so potential buyers understand the difference they will experience.

When you're the expert. If you have unique specialties or knowledge not available elsewhere, promote them and charge extra for them. For example, if you're the only drainage contractor with a diagnostic camera to analyze networks of underground lines, charge extra for the camera service over-and-above your normal rate. Be careful, because you can get extra for special services when customers need them, but having them does not justify an upcharge to your normal services.

When the project seems risky. Anytime there are unknowns on a project: soil conditions, unusual material handling or delivery concerns, geographic distances, and specialized products, be sure to add a factor to your pricing. The riskiest projects are often the most profitable if you build it into the pricing structure from the start. Developing a reputation for handling tough projects like complex central controls, pumping systems, large diameter pipe, etc. is a great way to develop a steady stream of profitable referrals from general contractors, landscape architects and others who know you can get the work done correctly.

Aim higher than "being the lowest price" to receive a fair reward for your efforts this season!