Coppersmith
Senior Member
- Location
- Tampa, FL, USA
- Occupation
- Electrical Contractor
Every county in every state seems to have a different rate. What factors go into what people are willing to pay per hour I can only guess.
Number of companies
Number of available technicians
Weather conditions
Insurance costs
How rich the customers are
How old the housing stock is
Union market share
a dozen other things
Customers look for two things: price and quality. The higher your quality, the more you can charge. Quality costs money so you can't be high quality and be the low price leader. Quality includes a lot of things. Being on time, exact time appointments, neat uniforms, booties, well spoken techs, neat work, cleaning up after yourself, good quality materials, being fast and efficient, accepting credit cards, and lot more.
Some customers are only concerned with price and never ask about quality. (Hint: Stay away from these.)
Some customers never ask about the price and call you because you were recommended highly (Hint: You want these.)
If a customer calls and the first thing they say is "Do you offer free estimates?", they are probably going to be price shoppers.
Probably the correct solution to the problem is:
(1) Determine who your competitors are.
(2) Find out what they are charging.
(3) Figure out what quality benefits you offer that differentiates you from your competitors.
(4) Decide where on the spectrum of pricing you want to be: lowest, low, middle, high, highest. (Hint: middle is a good starting spot.)
Once you have a price and have used it for a while, how do you know if you are charging the right price? By seeing what percentage of estimates (small jobs) you give turn into jobs and how full your calendar is.
I shoot for a 80% conversion ratio. If you start getting 95% of the things you estimate, your pricing is probably too low. If you are only getting 40%, your pricing is probably too high. If you are booked out three weeks, your pricing may be too low. If you are booked out only two days, your pricing may be too high (or you need to work on getting referrals).
Number of companies
Number of available technicians
Weather conditions
Insurance costs
How rich the customers are
How old the housing stock is
Union market share
a dozen other things
Customers look for two things: price and quality. The higher your quality, the more you can charge. Quality costs money so you can't be high quality and be the low price leader. Quality includes a lot of things. Being on time, exact time appointments, neat uniforms, booties, well spoken techs, neat work, cleaning up after yourself, good quality materials, being fast and efficient, accepting credit cards, and lot more.
Some customers are only concerned with price and never ask about quality. (Hint: Stay away from these.)
Some customers never ask about the price and call you because you were recommended highly (Hint: You want these.)
If a customer calls and the first thing they say is "Do you offer free estimates?", they are probably going to be price shoppers.
Probably the correct solution to the problem is:
(1) Determine who your competitors are.
(2) Find out what they are charging.
(3) Figure out what quality benefits you offer that differentiates you from your competitors.
(4) Decide where on the spectrum of pricing you want to be: lowest, low, middle, high, highest. (Hint: middle is a good starting spot.)
Once you have a price and have used it for a while, how do you know if you are charging the right price? By seeing what percentage of estimates (small jobs) you give turn into jobs and how full your calendar is.
I shoot for a 80% conversion ratio. If you start getting 95% of the things you estimate, your pricing is probably too low. If you are only getting 40%, your pricing is probably too high. If you are booked out three weeks, your pricing may be too low. If you are booked out only two days, your pricing may be too high (or you need to work on getting referrals).