Your Customers Want Certainty – Part 2: Price Certainty
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If you’d rather read the transcript it’s here below.
Certainty # 2: Pricing Certainty.
I said before, customers like certainty, it makes making a decision for them easier and less risky and we don’t like risk particularly when we’re making decisions. So the less risk there is in a decision, the easier it is. You need to give certainty in your marketing and in your sales.
Today I’m talking price certainty. I’m Jon of course from Small Fish Business Coaching. I run the Tradies Toolbox Coaching Program. It’s for trades business owners who want to grow and scale, and part of growing and scaling of course is making it easy for your customers to make that decision…either to approach you or to book a job and buy your services.
Now lots of tradies price like this:
- Hours and materials with a margin on top
- Create the price for the job
- When someone calls this is how much to do this thing
If all you say is ‘I don’t know’, you leave them with an uncertain cost and that’s fine as far as it goes. You all know that’s what your costs are and tying what you charge to what you cost is kind of the way it’s always been done.
And this is partly why people always ask you for a quote because they want some certainty about how much it’s going to cost them and of course the danger in that is you would go out and measure out and do a quote which is where you don’t get paid for.
What I’m proposing to you?
Build a fixed price schedule for some of the more common jobs that you do so you can give people some certainty without having to pay the price of going to their site, measuring up and doing the proper quote.
When someone calls and makes an enquiry, you can give them a price and you’ve taken that uncertainty away from them and in some ways you’ve kind of absorbed it onto yourself, didn’t you?
Now, before you say, “that’s not going to work for my business Jon,” (which I can hear you saying), it does work and it can work for most of you. It really works well. This approach I’m going to talk about works well for jobbing trades, those who do smaller jobs rather than larger projects.
I know builders and many project-based trades will do a fixed price after a proper quote and maybe if a job is big enough, it’s worth doing a quote. A whole different discussion. So if you’re a builder or you do large projects like pools you might wish to switch off now.
So if you’re a jobbing trade (you do maintenance, you do toilet seats and tap washers, and you replace fans and electricity junction boxes, etc) then you’ve got some jobs and those jobs often cost you and take you the same amount of time and the similar amount of materials within a certain bit of wriggle room every time.
So you can give a fixed price knowing you’re probably not going to be too far wrong. So some certainty is possible to give without you taking on too much risk. You don’t have to take on all this risk. I know it feels scary now, it’s not.
So there’s two things you need to do:
- You need to let go a bit of that link between how long it takes and how much stuff you buy and what you charge the customer because they’re not really necessarily tight.
- And you need to accept some managed risk in your pricing. It’s probably small and I’m going to say I think it’s worth it.
So let me explain…
Who says that the price for something needs to be tied closely to how long it takes you and how much stuff you had to buy?
We don’t do that in a cafe. I’ve never sat in a cafe and watch the barista take 30 seconds to pour my coffee and thought, “one shot of coffees about 30 cents, dollop of milk is about another 20 cents, 30 seconds of his time at 30 bucks an hour say you know that is about 15 cents, duh $4!!!
That’s outrageous! I just go coffee, 4 bucks, thank you very much, it’s delicious. I don’t make a link.
I know this is normal in the trade world but I I don’t think it has to be. I think it’s just convention.
So if somebody says how much to fix my cupboard? And you say 500 bucks and they say okay, who cares how long it takes? Who cares if it takes you one hour or two hours or three or four hours and whatever? So within certain parameters of risk, this is very doable and a fixed price list is a very doable thing to do. I’ve helped some of my customers do it and it’s changed their business significantly so I’m going to suggest that you give it a try.
Now here’s a couple of things…
One thing it does for you is that you could book the job straight away because you’ve given your customer some certainty. If you’ve got your price list right and you can do it in a reasonably measured way, you’re not taking big risks and you can book the jobs in and they don’t go away and look at somebody else and you don’t have to wait till tomorrow until you’ve gone out there and measured up to give them a quote so you can book the job in when they need the work done. You can make friends and get its certainty for you as well and you’re going to be close enough so your risk is very small.
Most trades I know, when they’re asked to give a ballpark price for a job, you get a big pretty close. You experienced, capable people who’ve done this many times. You’re not just pulling numbers out of your ass and having a guess – you know how long it’s going to take and how much stuff is going to be used.
So even if you can’t give absolute certainty with a fixed price, I bet you can give people some certainty and perhaps enough certainty to book a job on the spot which is where the real win comes. And you win more work more quickly if you do this I promise you – I guarantee it.
Does it sound too good to be true? Of course it does but it’s not.
Like I said I’ve done it for real people and it worked for them and it’s saved them time and they’ve won more business more quickly.
If you want me to help you do it, you have to join my program I’m afraid. You have to book a 10 minute chat and we’ll go through the process of assessing whether the coaching is the right thing for you.
I’m happy to to share some of my knowledge just on pricing if you don’t want coaching, but I certainly want to be able to sit with you and help you build a fixed price, list in ten minutes.
So if you’d like to find out more, book a ten minute session I’ll talk to you then.