Am I Priced Right for COVID-19?
Ever find yourself wondering, “Am I priced right?”
As my attorneys like to say about everything that I ask them, “Well, that depends,” as I roll my eyes and say, “Will somebody give me a straight answer please?”
The CEO of Ferrari was once asked how many of a certain type of model he was going to produce. His response? “Exactly one less than the market will want.” Now, isn’t that interesting? We all know Ferrari is a high-end luxury racing beauty, and yet they price based on what their market will bear. And they know exactly what their market will bear.
What will your market bear, and is COVID-19 changing how you are priced?
Are your customers questioning their bill?
Our team has been running service calls in the field all across the United States over the past few months, and when presented with a menu of options, homeowners are still buying the level of service they want…and let me tell you, to no one’s surprise, COVID-19 is not turning these homeowners into cheaper buyers.
We are finding that now is the perfect time to continue on providing great service to your customers, presenting your prices with options, and when applicable, even offering new services such as air sanitization and fogging throughout homes and businesses.
On a resume I reviewed earlier this week, I was amused by the candidate’s creative liberty, as they stated, “Here are my accomplishments pre and post COVID-19.” I hit a hard stop; there was a lot of truth in that. How many of us, if not all of us, have been forced to change and change for the better? Have your processes in the home changed? How about how you greet your customer? That has certainly changed.
Have you adjusted your prices to meet the demands of your customer’s current health and safety needs?
Your company is most likely now using more products in the field for cleaning, sanitizing, and safety and many materials and parts have been much harder to get your hands on. So, have your costs gone up? Maybe to question with more emphasis, HAVEN’T your costs gone up?
We change our prices for what the market will bear; we do not price gouge, but our costs as an industry are currently much higher. Running a business is expensive, and we are in business to serve our customers while turning a profit. So, it’s important to recognize the costs that are happening; don’t ignore them.
I’m ready to extend my neck on the guillotine, so might as well jump all in with this one:
Pre-COVID-19 vs. Post-COVID-19
Our circumstances have changed, and our field presentations have changed. But if we aren’t raising our prices to match the costs and needs of the business, are we at least watching our closing rates?
A low closing rate cancels out all the good you could possibly do. Service should close over 95% of every opportunity you run. If your closing rates are low, especially when customers are stuck at home and noticing all the problems in their homes and they have time to fix them, something about your presentation is communicating that your expertise isn’t worth it; something about your presentation is presenting your company as a commodity instead of as a solution.
We have been hearing lately that some technicians are nervous about giving options to the customers because they know times are hard and don’t want to make anyone uncomfortable.
It’s important to listen to your techs and listen to your team and course-correct accordingly. But don’t believe for one second that people aren’t spending money—Amazon would beg to differ; it’s their super bowl right now with everyone sitting at home. Online shopping is no longer the new rage. It has even bypassed the new norm and has become a new family member. People are buying, and they’re even buying more because they WANT health and safety – if you don’t offer it, they can’t buy it!
If they’ll spend money on new paintbrushes and paint at The Home Depot for a DIY home project, they’ll invest in having their systems working properly. And if they’ll spend $8 for a bottle of hand sanitizer right now, they’ll look at pricing options and swing what they can do. No, we don’t want to overcharge; that’s never been the idea. We just want your customers to be given the option to buy. Really, on every call, you give your customer an option whether you mean to or not: Buy from you or buy from your competitor. So, you might as well give them some options to choose the service they want, so they are more likely to remain your customer.
Don’t prejudge your customers and decide for them how this pandemic has affected them. For you, it might be your wallet affected, but for them, it might be a family member. Let them decide what’s important to them and spend accordingly. In a time where we have lost so much of our power, let your customer have the power to purchase.
Written by Danielle Putnam, President of The New Flat Rate and Immediate Past President of Women in HVACR
Service Roundtable is dedicated to growing your bottom line and helping your business maximize its full potential. These groups of contractors work together to assist you with marketing, sales, business, and so much more. Twice a month, seminars around the United States and Canada are held to network and further assist your business. Visit Service Roundtable.com to see if there are Success Days in your area!
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