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How Do You Know If Your Prices Are Too Low?

Your prices are too low if you never get a call from clients stating that the service bill is too high. If you never get this kind of a call, then it means that your prices are too freakin’ low (like 1950’s low) and you should raise them! I view it as a good sign when people call up and question the bill.

We give them an honest answer about how much it cost to pay a tech, gas prices, cost of labor, health insurance, warranties, workers comp, 401K, office support, plus our phones are always answered live. Once they hear this they usually cool down. I always see people coming back for more, and even get referrals from people who question the bill.

Peddler

Peddler

We are not AFRAID to bill accordingly because we deliver great service, and have outstanding follow up. If your “SERVICE & DELIVERY” sucks, then you can’t charge higher prices, it’s that easy. But if you provide exceptional service and delivery, and you’re planning on growing your security business, you’ll NEVER do so by being the cheapest price. You can’t be cheap with yourself because if you are pricing your products and services too inexpensively, there’s no money left over to hire a tech, purchase a new van, follow up with prospects and clients, invest in a direct marketing campaign, and so on.

Another sign that your prices are too low is if a client of yours says “David, go and do the install, cuz I trust you.” What he means by that is he knows your prices are dirt friggin’ cheap and he doesn’t have to look elsewhere for pricing because he knows that you don’t charge enough for your services and, therefore, he won’t be shocked when he gets your bill.

Instead you want to be viewed like this: “David, I want you to do the install, but can you give me an idea as to what this is gonna cost me?” This is what I call a healthy respect for you and your pricing. Next up is this one. If a client says that you are “FAIR” what he/she means is that, again, you are dirt-friggin’ cheap. When someone says that they want something for a “FAIR” price, it means that they want to pay next to nothing for it. Do you want to be doing an install for next to nothing? I sure as heck don’t! You should take it as an insult if someone calls you “FAIR” because you’re leaving a heck of a lot of money on the table.

One last thing, if someone will wait 8 weeks for you to do the install, more than likely they have gone out for bids and yours is the lowest around, so they’re willing to wait it out for you and save some money in the meantime.
I surely hope this helps you think differently and feel differently about pricing your products and services. If you are not consistently raising your rates with the times, then you’re losing money. I know for some of you this goes against the grain of everything you’ve ever heard about pricing, but it’s the God’s honest truth!

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