Pricing Advice to … Everyone
A reader named David asked: “I’ve enjoyed learning more about pricing from reading your articles. Any thoughts about pricing for house painters?”
YES! And the advice is for everyone. Before reading this blog, think about what advice you would give David. Maybe it’s better than mine. Feel free to share it.
Here are my thoughts:
First, think about how your buyers make decisions. When they decide to have their houses painted, do they just call you or do they call several companies for bids? My guess is there is a sampling of both.
We just had the outside of our house painted. Our neighbors went first and said they really liked the person they hired. We hired the same person, and we didn’t go out for competitive bids. My first piece of advice: Add 10% to your bid when you’ve been referred. Every bid is custom, so nobody would know anyway.
For those customers who ask for multiple bids, how do they make the decision? They don’t want the cheapest one because they are afraid of poor quality. Most will buy the second one, unless there is a clear reason to spend even more.
People often think pricing is only about capturing value, but once you understand pricing, the real trick is creating more value. Talk to buyers about how they made their decisions. Can you create proof points that you are high quality or faster or cleaner or whatever buyers care about? If you’re just an average painter, like all the rest of them, you will never win at premium prices. Be better, prove it, and win at higher prices.
The two fundamental pieces of advice I just gave to David and would give to everyone who wants to earn more:
- Identify when there is no competition and charge a little bit more.
- Be better and find ways to prove it, so you can charge a little bit more.
I probably should have called this blog “How to Charge a Little Bit More.” Good luck, David, and everyone else.
Looking for the latest in product management news, articles, webinars, podcasts and more?