In blog 1 of this series we talked about increasing the value of your existing service.
Today is more about getting the right value for your service than just arbitrarily adding more to the price.
Very often we start a business and give away a lot for free to attract our first customers, however as business costs increase we need to be mindful of what we should be charging for and what we use to attract customers to us, versus the competition.
By following the previous process and breaking down what we can easily eliminate if not needed, we can then begin to build an appropriate price for the level of service we offer, furthermore, we can allow the customer to choose that level and pay more for anything above the core service – if they want it.
There are two main ways to increasing the price of a service.
- Charge more for what you offer
- Charge in a different way, which results in you charging more for what you offer
Both are very valid here and can be implemented quite simply without impacting the success of you winning business.
This is not only increasing the ticket price of a service but includes removing parts of the service that have a cost and/or charging more for the elements of your service the customer really wants.
Here is how it works in practice.
EICR or Fixed Wire Testing Service Example
In this example our service of Fixed Wire Testing includes a number of services that we always deliver;
|Provision of electronic schedule of Works||Provision of DBS checked Engineers|
|Send RISK Assessment & Method Statements (RAMS) – Generic||Provision of PDF Electrical Installation Condition Report (EICR)|
|Included minor remedials||Works to downgrade all C1 defects|
|Client Branded Uniforms (client supplied)||Load testing of SupplyVerification of EICR by Qualified Supervisor|
|Provision of speciality PPE – (e.g. live environments)||Basic line drawings*|
|Provision of board stickers / RCD labels / Mixed Colour wiring labels||Electronic Circuit Chart|
|Voltage Stickers||Laminated circuit charts (sent afterwards by post)|
|Accessory Stickers (Dyno Labels)||Pre-start meetings (critical systems, Q&As)|
|Provision of supplementary Thermal Imaging||Weekly updates via email (week previous work, proposed next week)|
The circuit rate we charge for this service is £7.50 per circuit, which very often gets discounted to £7.00. Therefore the average circuit rate in the business is £7.10.
Now as before, we divide this list into the CORE service elements, which we either must deliver as part of the service or are not easily separated or costed individually.
We then set a price for all of the additional service options.
|CORE SERVICE (Cannot Be Removed)|
|Electronic schedule of Works|
|Send Generic RAMS|
|Board stickers / RCD labels / Mixed Colour wiring labels|
|Basic line drawings|
|Works to downgrade C1 defects|
|Electronic Circuit Chart|
|DBS checked Engineers only|
|OPTIONS (Can Be Removed)||UNIT PRICE|
|Load testing of Supply||£0.05|
|Included minor remedials||£0.25|
|Client Branded Uniforms (client supplied)||£0.30|
|Laminated circuit charts (sent afterwards by post)||£0.88|
|Accessory Stickers (Dyno Labels)||£1.00|
|Supplementary Thermal Imaging||£0.50|
|Send Client Specific RAMS||£0.25|
|Pre-start meeting with client||£0.10|
|Weekly updates via email||£0.05|
As you can see, by following this process we have increased the circuit rate from £7.50 to £10.88. Plus it is very unlikely a discount will ever be applied because the client has created their own bespoke service with you – a service you would have delivered in full anyway!
Another very valid approach for increasing the price is to change the WAY in which you charge. As an example, you may currently charge on a day rate of £300 per day (which again you typically discount down to £280 per day.
You invariably get a lot done in a day because you good at what you do, and this works because you are getting paid for the hours you work. However, you are also very conscientious and on many occasions you will stay a bit later to complete a job, or start earlier to finish a previous job before going to the next job which you know will take a full day – so you’ll be staying late – sound familiar!?
An alternative approach is to look back over your jobs and identify a per fitting or per item price. For instance you may typically test 40-60 circuits in a day and be happy to charge £280 per day. However if you were to charge £7.00 per circuit, you would still get £280 for 40 circuits, however you’d get £350 for 50 and £420 for 60, which more than covers staying late or popping back the next day. In addition, if you use the managed service approach you could get a lot more for your service.
This can be applied to any service where you charge a day rate rather than a per item fee.
Tomorrow we’ll cover enhancing your service so you can realise significant growth. Stay tuned!