Your Service Pricing: Get Ready For the Recovery

How to price service during recovery

How to price service during recovery

Are you trying to survive the recession by lowering your prices, adding free stuff, and bending over backwards to please the customer so you can keep them? You are not alone. Let me ask you this. When will it stop? How will you stop it? Have you been planting the seeds so that you can stop giving away your time, energy, and expertise? Does your services price list even have your “desired” prices on it?

Take these steps to get ready to raise your service pricing as the economy improves, and prepare your clients so they’ll value you more and happily stick with you.

1.  Make a list of all your current services and your ideal services price list. Give each item a specific service price. This list of service prices is NOT to be given to customers; this is your own secret pricing of services you believe you should be charging. Call this list “Primary Service Prices List”. Use the prices for services you should be charging, not the discounts you are currently giving due to recession, fear of losing the business, self doubt or whatever makes you undercut your own service price list. Think of this list as what your service pricing would be if you were not afraid to lose the business.

2.  On a separate sheet list those services you have been doing for clients but doing for free. Call this list “Additional Service Prices.” Keep adding any services that clients ask for, but don’t charge because you “don’t want to nickel and dime” your client. Also include items you routinely do but have never specifically priced.

For example, one of my commercial cleaning clients is frequently asked to:
Change light bulbs
Put up window screens
Dust air ducts
Dust plants
Put away holiday decorations
Clean up after parties
Initial ‘extra’ cleaning to bring rooms up to standard

On this Additional Service Prices List, start adding the prices for services you think should be charged. Again, this is your own private pricing of services, so don’t worry about how to price services in the best way just yet. Just keep adding distinct services to the list and assigning them a price. If it helps, estimate the amount of time for each item.

3.  Change your proposals.  Be specific in your prices, services, and delivery specifications. Build a clear checklist of what each primary service entails. You’ll then be able to point out when the client has asked you for an extra service. That’s because that service won’t be on your delivery list and will be on your Additional Service Prices List.

4.  Begin believing that this recessionary era of “free” will soon be over. This is a change in your thinking. Look for evidence of it. You’ll find it. Remember, what you think the service is worth (and ask for) is what clients think it is worth.

5.  When a client asks you to do something on your Additional Service Prices List, your response should always be positive. Say, “I’ll be happy to do that for you Sally. Our price for that is $75. Would you like me to add that today or schedule that for Tuesday when we work with you next time?” If you don’t have the courage just yet, say something like, “Normally we charge $75 for that but since you are such a good customer, I’ll add it this time.” You’ve now begun establishing the value of your services. Listen for feedback.

6.  Tell your clients when you are giving them something free. Put those items in your invoice with their new normal service prices, but begin listing them as “no charge”. You’ve been giving them something of value; you want them to see it.

7.  Now start adding an end point to all these free and cheap service prices. When providing a free service, add “30-days free” or “6-months free” after each item. That way, you’ve started to tell the clients what the end date is.

8.  Practice adding in those new service prices and charging for those items on the Additional Service Prices List. Add these service prices to your proposals, and in your response to client requests. Further, begin suggesting these services as you see your clients need for them. You will be adding value and making helpful suggestions. Don’t wait until all your competitors have raised their prices or started adding these services. While you may be afraid to be first, be more afraid to be last.

Notice how changing your service prices are a lot about the way you are thinking? So don’t give up at the first sign of resistance.  Tell me what you’ve been giving away for free in your comments.

Now stop reading about how to price your service and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at 888-920-2030 or by email at merralee@captureprofits.com.