5 ways to increase revenue

5 ways to increase revenues for your electrical contractor business: Day 1

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Increasing the value of your existing service

1 of 5

Having spent nearly 20 years working with various companies to assist them in increasing revenues, profits, clients, or market share I have been lucky enough to discover a few methods for successfully achieving these goals. Back in 2017-18 this included working with an Electrical Contractor where in only 12 months, my new strategy enabled a 56% growth in revenue and a 79% increase in profit. This blog series will cover how this was achieved, broken into five broad areas delivered each day of the week

  1. Increasing the value of your existing service
  2. Increasing the price of your existing service 
  3. Enhancing your existing service
  4. Improving the efficiency of your business
  5. Increasing the enterprise value of your business

Increasing the value of your existing service
This is the core of your business and may not have changed for many years, which can be the source of some of your challenges. You, most likely, have a pricelist and even a specific process for discounting. However, it is common for such processes to be abused overtime or not followed at all. Or to just set a price that feels right at the time and depends on how well you know the customer! This leads to a devaluing of your service due to inconsistency and the habit of providing discounts even when you really did not need to. It is also common not to have a formal agreement for the delivery of your service. This may not be a challenge for smaller ad-hoc jobs, but when commitments to resources are high, along with expenditure for fittings, materials, access, and waste disposal, this can expose your business to a high degree of risk. Now accepting risk is fine, but you need to be protected either financially or through some form of an agreement(even if it is a well-worded Quotation with good Terms &Conditions). Then there is the market itself. If there are a lot of competing companies offering the same service, it is common for the price the customer is willing to pay to fall, because they can always get it cheaper somewhere else. This has happened with PAT testing already, where it’s common to find a company willing to complete a PAT job for 50p a PAT–madness! EICRs are now going the same way. So it is vital you differentiate yourself and charge a fair price for your service. But how? 

 

Standing out from the crowd by breaking down the service offered into two sections we can identify where potential increases in value may lay.

  1. Elements of service which can easily be removed if not required
  2. Elements of service which are core to your service and cannot be removed

Cannot Be Removed
If an element of service cannot be easily removed, then this must be SOLD as a value-added component and ideally used as a Unique Selling Point (USP) or differentiator. This will increase the perceived value of what is already delivered.

Can Be Removed
If an element CAN be removed, then this should be priced and offered as a chargeable extra to the new core service, which is made up of what cannot be removed.

In this way, your customer can tailor their own service, thus you can significantly increase the “value” of your service, whilst holding back some of the components for the next part of the strategy … increasing the price. Which the customer will be happy to pay for, as they added to the core service.

I have included a working example of how this can be achieved for the EICR service, (but this can be applied to any service you offer). It not only explains how this happens but provides a new commercial model designed specifically to increase the average order value of an EICR job and drive value-based selling to counteract the commoditization of the market for the purchase of EICRs.

Check out day 2 of this blog – ‘Increasing the price of your existing service’ to see the example.

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