Pricing Your Products and Services

As I have stated before, the old-school saying, “There are only two reasons businesses fail—either not enough income or too many expenses,” still holds true today. One of the main considerations to achieving your profit goals is the pricing of your products and services.

Let’s look at products first. It is unrealistic to believe that, in most cases, what you are selling is NOT available through other sources. One of those sources is the internet, and often the products you are trying to sell will be available there at a lower price. Assuming you have a webpage, I strongly recommend that you DO NOT use the manufacturers’ product numbers on your website. Instead, assign the products unique numbers and use those numbers on your site. Doing so can greatly reduce the likelihood of a potential customer purchasing elsewhere. Another pitfall in setting your prices is trying to match or beat a competitor’s price. Why? Because you don’t know how they came up with their price and have no idea if their pricing is profitable. Set your product pricing to meet your revenue goals, and then provide the services and support that retain existing customers and attract new ones.

Pricing services is another critical task to keep your business viable. Services create substantial revenues and, in many cases, generate profits equal to or even greater than those from product sales. Annual and/or multi-year service agreements offer good value to customers and should be offered to ALL customers during the quoting process. When pricing service calls, make sure you take into consideration technician compensation, travel time, and expenses such as fuel, tolls, and vehicle maintenance. Depending on your service area, setting a two- or three-hour minimum service charge is strongly recommended.

Keep reading our blog, or if you want to Wright Your Business immediately, book a 15-minute Google-Meet meeting to explore the possibilities.