Mule,
Forgive me if I'm a bit repetitive, I didn't have time to read all the posts.
The original post wasn't clear exactly what you heard or why you have a hunch that you should lower your prices, but I would offer the following:
If you have annual sales of $1,000,000 and are taking home $150,000 in profits, when you lower your prices 15% you will have zero profit.
In your situation, I would arrange a meeting with the client (the new management) and tell them that you have built a successful business by being responsive to customer needs. I would ask them what their plans are for the next 12 months and ask them what your company can do to facilitate them meeting those goals. I would start off by asking questions about ,quality, scheduling, responsiveness, and finally cash flow management...not price. This should get a dialogue going that may lead to you having a better understanding of what their needs are. The end result may be that they ask for lower prices, but I have had this exact conversation with a client where it turned out that what they really needed was different terms. I also had a client tell me in a similar conversation (this is one that still bothers me) that they were dissatisfied with our service and had been talking with other ECs. I had been telling my guys to do the minimum work necessary on service calls for this client because I perceived that they were a little anxious about prior bills. I was trying to keep the billing lower. It turns out that what they really wanted was for us to suggest longer-term solutions that would allow them to budget for repairs on their properties and make their cash flow predictable. I think we would have lost the client if we hadn't had the conversation. It can be really difficult to guess what a client needs. Sometimes we overlook the obvious which is to just ask them. If it turns out that the new managment has an electrician they have worked for or is someone's Brother in Law, you can't do much about that anyway.:grin:
I apreciate your comments, in fact they are very creative, and Im thinking I'll try your idea..... I dont make a million bucks nor $150 grand.......remember ! that 15% was the extreem side of my suggested so called sale, it would most probably be 10-12%..
While I just started contracting this year, and this is my FIRST winter, and the slow economy to boot, I may be over reacting and not having enough faith as others have mentioned.
This particular customer has been my "ace in the hole" since fall, as they contract me 2 days a week. Taking this "gig" was a tough choice, as I've had to turn away a number of jobs since I started. Not a bad thing, as I've been turning work to a buddy contractor that has been slow and needs it.
Anyway this particular customer now has brand new management and they are now wanting to start competitive bidding, hence screwing up my nice T/M gig
.....Meanwhile my client contact is trying to talk them out of the bidding war, as there are so many variables, particularly job interuptions.
So I was thinking I would drop my price a bit to encourage them to keep the T/M, and to get me through the remainder of the winter, as the work is expected to end by then anyway.....So other than this customer, we've had alot of really good jobs, and I've been working 6 days a week to try to make it all work, but its been a nightmare, as I do everything and take out the trash. ..........
I guess Im a bit unexperienced at the contracting, but believe me, Im learning fast haha
Thanks to all of you, for your ideas and comments
