Can you price to High?

A

Al Patterson

Member
I did a job today on a small box ranch near my home and I gave the quote of my basic minimum of 150.00 to clean his home, he was very pleased with the price and I was washing within minutes.
He stay outside and watched my technics and results, we started talking and he told me he had couple of estimates ..... one was 250.00 and one was well over 1,000.00, the guy that quoted well over 1,000. said that 2 facial boards needed to be replaced. After the house was cleaned he saw the boards was not rotted but just needed a fresh coat of paint.
His real estate agent told him don't pay over 175.00 and he said I was the only one under. His next statement was he was going to pay me 175.00 instead of the 150.00 I quoted, I often get customers that tip or pay more than I charge, it happens more when they are watching me work.
I realize that people may charge more and I am by no means a low baller but I don't like to over charge my customers either. I know what I have to charge to make money and in my area I know what is overcharging, Its hard to find a honest contractor in any field and I know whats it like to be overcharge and I like to treat my customers the way I would like to be treated
 
Al,
Your charge should be exactly that. Your charge. You know what you need to operate your business. Too many times we worry about what others charge. This is not good business. I know what my comeptitors charge, but it has nothing to do with what we charge. Our cost are based on our expenses. The guy down the street doesn't have the same equipment and vehicles, cost of labor, taxes, etc. we have. If someone charges $1,000. and we charge $150. so be it. As long as you get your price, you'll be a winner.
 
Al,
I'm with you. I charge a fair price for the work I do. It isn't unusual that I'm paid 50 or $75 dollors more than my bill ask for. Then again, sometimes I'm told my prices are too high. That's life I guess.
 
Always a nice feeling when someone takes care of you with a bit of a tip! Its a great motivation to keep doing what you do best!
 
I have learned the whole "not worry about your competitons price" I charge what I think is fair and reasonable. AND you know what....you can't make everyone happy when it comes to prices. Some people want something for nothing. People in general are a trip.
 
There is no such thing as "overcharging"

However, there IS such a thing as undercharging. There is a point of break-even. Below it is undercharging and above it is PROFIT. The goal is to be profitable.

Lets talk about it next year.
 
FCPWLLC said:
There is no such thing as "overcharging"

However, there IS such a thing as undercharging. There is a point of break-even. Below it is undercharging and above it is PROFIT. The goal is to be profitable.

Lets talk about it next year.
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Does this only go for our industry or does it go for the mechanics, plumbers or other contractors that we might hire that can set their own profit margarine?
 
Al, I charge people the same way. I try to be fair with them and explain about materials being used and the process. That in itself will lead to them not being so surprised by the end result.(price). As long as they feel they are getting their $$'s worth for the service they will normally agree and pay it. Building value into the proposal and being fair with pricing along with under promising and over delivering will in most cases always lead to a tip. The most I've ever recieved was $100.00 tip. Normally it will be $10.00-$20.00 and in this day and age every bit helps!:)
 
If you use gas as an example, you can price things as high as you want, and people will still pay for it.
 
BUNN said:
If you use gas as an example, you can price things as high as you want, and people will still pay for it.
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Just keep in mind that they also use gas and may not have as much in their budget as they normally wood.....Catch 22 in some cases!
 
Very few people will tip an owner unless they feel like they were undercharged to begin with. You can take it for what its worth but look at tips for what they are, a subsidy for underpayment. That's why we tip waitresses.. they make $3 per hour.

So many guys think that offering value means giving a good price. Good value is offering a professional service and doing what you say you are going to do in a timely manner. Having the insurance and the experience to back you up is what makes a real company. Those expenses cost money and they have to be passed along. When you price a project you have to figure on that same project being done by employees. If you don't do that, your business will fold if you get hurt. If you don't leave an extra 10%-20% over and above your salary your company will be cash poor. Business is not personal. You don't fund it with your wallet. It needs to be self sustaining. You can and should offer personalized service, but the pricing for that service is totally independant of your emotion. I would rather be respected as a top notch company that delivers excellence than worry about someone liking me for my price. I don't want to go to someone's barbecues or be invited for Xmas egg nog. Business is not about buying friendship, its about being savvy enough so you'll be around next year to service that customer. Most people would rather pay more for convenience. We as business owners owe it to our customers to charge enough to stay interested and be business next year. If your requirements to stay in business are owning a $30,000/yr job pressure washing, one that is so fragile that a single personal injury puts your company down for the count while you heal, then charge the lower price. If your ego demands you get more yes's than no's, charge the lower price. That's the beauty of being the captain of your ship.. steer it the way you want.

As far as charging too high.. depends upon what you base that upon. The $1000 guy was offering more service so you cannot really say that was what he was charging for a housewash. Was he a con man trying to upsell an uneeded service? Perhaps.

Al, don't take this the wrong way but if you sold a job that low and were washing on the spot, you aren't busy and your phone is not ringing enough. Now this guy will refer you to all of his friends, so there is your good will. Problem is, all of his referrals will want the same low price. Soon you'll be very busy doing $150-$200 house washes. How many of them can you do per week? How many can you get without advertising? 6? 8? So you are grossing $1600 per week, that's good right? More than you were making working for the man. The problem is that business dictates that an owner's salary should be about 30% of the gross at most. That means you get paid $480 per week. You'll be busy and you will be broke. I know that upsets a lot of guys and you may be thinking "how dare you" but business is not emotion. Its based upon numbers and those numbers cannot be bargained with, cannot be negotiated and they don't exist in a sea of denial. It just is what it is.
 
I agree with Ken and Mike ... I try to push my customers as far a possible . . . In economics this is called the point of diminishing return. You can push as far as this point think of it as a shape of the St. Louis Arch . . . towards the up wards part there is your break even point then their is the point of diminishing return which is the peak or apex once past this point you are loosing money . . . i try to push my customers so that when they talk to thier friend the complain and say man DJ is outrageous but does such a good job that its worth every penny . . . This ties back into what mike and ken have taught me about who you are marketing too. The guy that buys a Porsche is like " Man its expensive" and his buddy says "Ya, but its a Porsche!" Thats were i want my company to be i want them to KNOW they are gonna pay top dollar before they ever call but its okay because they KNOW they are getting a Porsche not a Neon!
 
Scrappy said:
I agree with Ken and Mike ... I try to push my customers as far a possible . . . In economics this is called the point of diminishing return. You can push as far as this point think of it as a shape of the St. Louis Arch . . . towards the up wards part there is your break even point then their is the point of diminishing return which is the peak or apex once past this point you are loosing money . . . i try to push my customers so that when they talk to thier friend the complain and say man DJ is outrageous but does such a good job that its worth every penny . . . This ties back into what mike and ken have taught me about who you are marketing too. The guy that buys a Porsche is like " Man its expensive" and his buddy says "Ya, but its a Porsche!" Thats were i want my company to be i want them to KNOW they are gonna pay top dollar before they ever call but its okay because they KNOW they are getting a Porsche not a Neon!
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Amen to that..
 
Larry Millette said:
Just keep in mind that they also use gas and may not have as much in their budget as they normally wood.....Catch 22 in some cases!
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I was just being sarcastic. That was really an "apples to oranges" kind of comparison.
 
Al Patterson said:
I did a job today on a small box ranch near my home and I gave the quote of my basic minimum of 150.00 to clean his home, he was very pleased with the price and I was washing within minutes.
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How many sq.ft was the house? Did it have any garage(s)?
 
Scrappy said:
I agree with Ken and Mike ... I try to push my customers as far a possible . . . In economics this is called the point of diminishing return. You can push as far as this point think of it as a shape of the St. Louis Arch . . . towards the up wards part there is your break even point then their is the point of diminishing return which is the peak or apex once past this point you are loosing money . . . i try to push my customers so that when they talk to their friend the complain and say man DJ is outrageous but does such a good job that its worth every penny . . . This ties back into what mike and ken have taught me about who you are marketing too. The guy that buys a Porsche is like " Man its expensive" and his buddy says "Ya, but its a Porsche!" That's were i want my company to be i want them to KNOW they are gonna pay top dollar before they ever call but its okay because they KNOW they are getting a Porsche not a Neon!
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Your analogy of a Porsche and a Nean, might apply if it was true low baller that charged cheap prices and done low quality work.
However I or this scenario does not fall in that category.
Being in business full time since 1999, there is no doubt I can compare my work or equipment with the best of them and I expect all of my customers not ever settle less than 100% satisfaction on my work.
Most Pw can clean a home, it just might take some longer than others depending on experience and equipment, but to set me apart from my competitors for about 3 years now I send all my customers to the movies after completion of job. They know they got a Porsche at a "FAIR PRICE"
Ron mentioned what a customer cost in one of his posts and at the rt we attended, whats a customer worth to you? Everyone has to make their on decision on that.
 
Al Patterson said:
Your analogy of a Porsche and a Nean, might apply if it was true low baller that charged cheap prices and done low quality work.
However I or this scenario does not fall in that category.
Being in business full time since 1999, there is no doubt I can compare my work or equipment with the best of them and I expect all of my customers not ever settle less than 100% satisfaction on my work.
Most Pw can clean a home, it just might take some longer than others depending on experience and equipment, but to set me apart from my competitors for about 3 years now I send all my customers to the movies after completion of job. They know they got a Porsche at a "FAIR PRICE"
Ron mentioned what a customer cost in one of his posts and at the rt we attended, whats a customer worth to you? Everyone has to make their on decision on that.
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Al,

Not trying to pick a fight but YOU HAVE TO GET OUT OF THAT "FAIR PRICE" MIND SET!!! You say you have been in biz since 99 thats almost ten years . . . ken has been in biz (correct me if im wrong) around 5 . . . These guys know what they are talking about... you have been in biz for 10 and you are still washing (personally) and can do it johnny on the spot where as Ken has been in it for 5 and has a couple of crews and is booked way out. . . If you don't raise your prices you are writing your fate already my ten year goal for my companies is to be completely out of the field. i don't want you ride a mower, pull a string, squeeze a gun, or fill a roof mix tank. Is this i high gaol to set? YES but with the will i have and the understanding that there is a difference in a biz and a job i BELIEVE its feasible!

Point im trying to make is bro after 10 years you ought to be sitting in a wing armed chair countin your paper! Raise your prices and just see the difference it can make!!!!
 
DJ, not that it matters but I run 3 full time 2-man crews and a 4th one-man that handles maintenance cleanings/stainings. I pay an operations manager a very good annual salary and I make a comfortable living (not what I would consider great but enough to make the company worth keeping and growing). I am in a good area so I know not everyone can grow as quickly as I have been able to but I also work hard at making that happen. One thing I am anal about is analyzing numbers and tracking results. I am turning down new customers with anything less than $450 house washes and $750 decks. I also measure the lifetime value of a customer but offering them a cheap price has nothing to do with the equation. They call us back because we do consistent work and take care of problems. I am 100% honest with people. Where in God's name does someone have the high falootin' BS attitude that because I know enough to charge more that somehow makes me dishonest? I want the Amercian dream and have just as much of a right to it as the doctors, lawyers and professionals for whom we perform work.
 
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