Prices lowered for the economy?

I got a call today, and fellow wanted my prices. I quoted my usual price. I can tell over the phone, the "uh, I'll call you back" routine. The price that I used to get, before. Not making any sales.
Should I lower my prices, and figure that a low price job is better than no job?
Christopher A. Young Learn more about Jesus www.lds.org .
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Keep your prices up there. You look like you could do without a meal or three for a few years.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Fri, 13 Apr 2012 12:51:02 -0400, "Stormin Mormon"

All I can say is, many people are, including me.
J.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Thanks. Reality check...
Christopher A. Young Learn more about Jesus www.lds.org .
All I can say is, many people are, including me.
J.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 4/13/2012 12:51 PM, Stormin Mormon wrote:

I wouldn't but do you price by the job or by the hour?
In my consulting, I price by the hour.
Whatever, best explain to customers why either gives them the better deal.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Typically trip charge plus parts plus labor. I'm getting the sense that most folks don't have much money.
Christopher A. Young Learn more about Jesus www.lds.org .
I wouldn't but do you price by the job or by the hour?
In my consulting, I price by the hour.
Whatever, best explain to customers why either gives them the better deal.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 4/13/2012 9:51 AM, Stormin Mormon wrote:

This is a very complex question that depends a LOT on your business model and financial condition. How many employees you've got standing around. What's in the warehouse depreciating.
Lowering prices is generally bad psychology.
All you have to do is read the stuff in your mailbox or watch TV.
It's not about price. It's about perceived value and creating a sense of urgency to purchase.
Car companies do it by bundling a bunch of high-margin features you probably wouldn't buy and telling you you're getting a bargain on the deluxe package.
Food stores do it with a coupon. Milk for $1.99/gal (with $10 purchase... not including booze, cigarettes...endless list of exceptions). Good Saturday only. Low price on something you want. Urgency. Collateral purchase.
With a service business, you have to make the phone ring. Once you have 'em on the line, you have options. People often buy from the last place they contact. If you've got equivalent pricing, you need urgency. "We've got a special this week. Free air filter with furnace service." 1-year additional labor warranty on high-efficiency furnaces. Giving away something that may cost you nothing, but has perceived value to the customer.
"I've got a truck in your area this afternoon. I can give you 10% off the trip charge if we can do it this afternoon."
I'm a low price doityourselfer/tightwad. The torsion spring on my garage door broke last weekend. I googled and discovered that you can't buy the springs any more. But you can use the conversion chart to get similar springs with no guarantee that they'll work. And there ain't much you can do to change the torque of the spring after it's wound. They're expensive and expensive to ship. And no guarantee that the door will balance well enough for my wimpy opener to manage the lift.
So, I grit my teeth and started thinking about having it done. I narrowed it down to four places. First place had a coupon for door spring replacement and the lowest price. Their address was local, but the phone was half a state away and long distance. I drove by the address...It was a residence. Took 'em a day to answer my email, but didn't answer ANY of my questions.
Third was out of business. Fourth wouldn't sell me springs and the installed cost was high.
I visited the second choice last because of the logistics of the trip. Springs of the converted size were a little more expensive than the cheapest I'd found online. They could do the job the next day. They guaranteed the door opener would work when they were done. So, I spent an extra $100 more than DIY for the peace of mind that it would work. People who know the tightness of my wallet would think I'd had a brain aneurysm.
Turns out that the door balance was a non-issue, but I didn't know that at the time.
There was some urgency, I wanted the garage door open. I didn't take the cheapest option. I bought from the last place I visited because they instilled confidence.
Cutting price without a long-term analysis is risky. Increasing perceived value is always good business. Coupons are used because they limit the damage and don't create long-term expectations of lower price.
I wouldn't count on the economy getting better any time soon. Discretionary spending is down. You'd best offer services that people MUST have at a price that will keep you in business. Sometimes you just need a new career. Hanging on to a failing business too long drains your resources to the point that you can't afford the startup of the new business. Merging with a similar business can benefit both.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Apr 13, 12:51pm, "Stormin Mormon"

sure, and next time you are at the gas station, super market, doctor, lawyer, or cable company, tell them you want to pay them less as well.
Mark
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 4/13/2012 7:52 PM, Mark wrote:

We bargain all the time with the cable company. Every time our low cost option expires we ask for the current one and threaten to switch to FIOS. We get what we want.
We recently got a letter from our development that a trash hauler that got a lot of customers here would do it at almost half what it was costing us. We called ours and told him and he dropped price to match.
Go to your doctor and tell him you will pay cash if he reduces his rate. Good chance he will.
Senior discounts, I get them all the time.
But, when I sell my consulting service, there is no bargaining. Flat hourly rate take it or leave it.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Fri, 13 Apr 2012 20:23:22 -0400, Frank
economy?:

Given all the time you spend here, I'll bet a lot leave it.
--
Work is the curse of the drinking class.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

I'm retired, probably with too much time on my hands. My consulting is only a few days a month and most for one client. Actually when I explain my charges, they usually take it and don't try to reduce it. I have probably turned down more jobs than I accepted all for reasons other than money. I also quit dealing with intermediaries as customer would end up paying double and I'd waste more time dealing with those that would not hire the agency.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 4/14/2012 11:21 AM, Frank wrote:

I do all sorts of work and the thing most folks can't get through their heads is the fact that I don't sell parts, I sell my time. The price of my time is based on the number of years and the cost of me gaining the skills and knowledge I possess. People who complain about the cost of labor for a job are the same people who will pay a lawyer $250.00 for a few sheets of paper without batting an eye. I tell them, you pay an attorney $250.00 for 10 cents worth of paper and you're complaining about paying me $250.00 for an electric motor and the time it took me to remove/install and obtain said motor for you plus coming to you? Do you have brain damage or something? I do fire customers on a regular basis if they're the constant complaining type. I'm never nasty to them, I simply tell them that I can no longer help them, please call someone else. Call Monstrous Repair Service with 150 service techs and you'll find out why it is they all drive shiny new trucks. ^_^
TDD
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
I have also fired customers, all were totally unreasonable......
I never regretted my decision on any of them.
Its a select small group:)
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
I can think of two, who were really notable. One was a car dealer who was continously verbally abusive. He was orally abusive, too. Second was a company that wanted me to rekey locks at a business, using a master key chart generated by another locksmith. I figured out that keys to one area would fit another area. They just said hope no one finds out. Oh, I remember the third, I let him go after a couple of his checks bounced.
Christopher A. Young Learn more about Jesus www.lds.org .
I have also fired customers, all were totally unreasonable......
I never regretted my decision on any of them.
Its a select small group:)
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 4/30/2012 5:18 PM, Stormin Mormon wrote:

One of the things you learn when you work for yourself, is that sometimes you will not get paid. I've been stiffed by three people, one of which was a lawyer. Now, when in doubt, I get money up front. I also charge lawyers double my normal fee and only work on a retainer.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
I've heard that argument. Today, I got a call that probably could have been "some" money. The question of course, several. Cheapskates tend to also be PIA and not want to pay, and so on.
Christopher A. Young Learn more about Jesus www.lds.org .
sure, and next time you are at the gas station, super market, doctor, lawyer, or cable company, tell them you want to pay them less as well.
Mark
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 4/13/2012 12:51 PM, Stormin Mormon wrote:

I dunno if my post will help you or confuse you but never underestimate the power of word of mouth.
We purchased a furnace this year, a 96% Afue with variable speed ECM blower, single stage.
I shopped for 3 quotes but I went with the 40 year old guy who spent 2 hours trying to isolate and solve what he could with the 14 year old furnace. (partially running control board that was gonna cost $600 to fix)
I wanted him to lower his price by $500 for the new furance and all the related plenum and installation and modifications and he wasn't really happy with my request (could just tell by his voice) but we agreed to go $250 off. He gave us a really competitive quote to begin with so he was annoyed I asked for more, but we agreed in the end.
The reason he was willing to go lower with me was I told him he did a thorough inspection of the old unit and did his best to see if it was worth keeping it and that we appreciated that effort. He waived his initial repair visit charge to us.
Installation took him 90 minutes longer than he hoped, his wife was calling him at our house to come to dinner, but I told him he could use us as a reference if need be and he thanked us for that and I offered to keep his sign on our lawn till air conditioning season, which he seemed grateful. Free advertising and free word of mouth, that's what we offered him back.
I hope his young business grows.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Not sure what others charge. I should make some calls.
Christopher A. Young Learn more about Jesus www.lds.org .
What does the competition charge? I think unless you have a good reason to be above them, you need to be competitive to stay busy. I don't think you can afford to be too much below them neither for decent profit and reputation of quality / legitimacy. Then I guess all this goes out the window if your finances are so bad you need the work like yesterday. You have to make the final call.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

You could always raise your prices and either tell them that you are so busy they'd have to pay for "priority" or that you had to raise your prices because you were spending so much time repairing your competitors work
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Site Timeline

Related Threads

HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.