6 reasons why you need to raise your prices now
Hopefully, you may have increased your prices over the past couple of years to keep up with your cost trends. Even so, you’ll probably have to breed them again. And if you haven’t raised prices, you definitely need to raise them. Here are six reasons why.
1. Your costs have increased
Uh. Of course, your costs have increased. Everyone pays more for everything. You also. Unless you increase your prices to cover the increases you experience, you are subsidizing your customers. Do they need your grant?
In addition, your costs will increase further. Once the elections are over, the drawdown of the Strategic Petroleum Reserve will stop and gasoline prices will resume their ascent, leading to increases in the price of anything that uses petroleum or is transported by gasoline- or gasoline-powered vehicles. diesel, which is about all. More inflation is coming. Price ahead, so when it arrives, you’re not behind the curve playing catch-up.
2. You’re probably not charging enough
Most plumbers weren’t charging enough when inflation was below 2%. Now that inflation is between 8% and 9% (or more according to the ShadowStats.com website), underpricing is probably a much more common phenomenon. You need to raise your prices at the rate of inflation just to stay level. If you look at inflation as it was measured before 1990, prices must jump about 17%.
3. The greatest price resistance is between your ears
Consumers expect to pay more for everything today. Most have no idea of the initial cost of plumbing work. If they think you’re expensive, they’ll object. If they think you’re a good deal, they’ll shut up. So you probably hear about it when someone thinks you’re charging too much, but never hear about it when you’re charging too little. The tendency in these circumstances is to extrapolate complaints to your entire customer base and think that everyone thinks you are expensive. It’s your fear that speaks, not reality. Raise your prices and the number of complaints will likely stay the same.
Don’t be afraid of the occasional price complaint. Be afraid of their absence. Unless you get a complaint or two about the price, you’re charging too little.
4. You add value
Some customers just can’t do what you do. You make their homes and businesses more hygienic, more useful and more livable. It is an added value. People will pay for it. If they call you, they expect to pay for it.
Other customers are able to do basic plumbing repairs but choose not to, just as some people pay others to mow their lawns. The reasons vary. Some value their time more than they value the money they pay you. Some don’t like the work enough to pay someone else to do it. Whatever the reason, you always add value.
5. Your team deserves a higher salary
Your team does not live in a cocoon. Their expenses are increasing and they need salary increases to maintain their standard of living. If you don’t give it to them, someone else will. To increase their salary without taking money out of your pocket, you need to raise prices.
Frankly, it’s a good idea to raise wages and prices in tandem. Help link higher prices with higher compensation for your team. This reduces their reluctance to stand up when presenting the cost of a repair. It also makes them more willing to offer higher priced options instead of just offering the cheapest solution.
6. You deserve a higher return
Your business is probably your greatest personal asset. You put your capital at risk every day you exploit it. This is the difference between a business owner and an employee. You are putting capital to good use and risking its loss. For that, you deserve a solid return on your investment. Unless you earn this return, you cannot reinvest in your business or invest in your employees or the community.
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