How to Avoid Emotional Pricing

I have read that one of the most common reasons that a business fails is “emotional pricing”.  This is the art of basing prices for a good or service based on a feeling or mood rather than good solid information.

So, how can this be avoided?  We all have that inner feeling at times about what price would be accepted by customers.  I am not saying that we should avoid or ignore that inner intuition all together.  Rather, empower yourself by grounding your pricing practices in some  set of facts or information.

There are books that have been published that we sell and that are available elsewhere that encourage window cleaners to base their bidding on some sort of formula or factor.  The formula is based on the most common varieties of windows and job site challenges that you see on your jobs.  Things like how many windows for store front, how many second story windows for residential, how many obstacles that you will face inside of the job for commercial small buildings, and how many drops that you feel a job will take for high rise work.   You can start building your formula with basic information that you know about your business like how long will it take you to do a particular set of windows on the job and how much you need to make to be profitable for your business.  From there, begin plugging in different factors or different characteristics of the job and work towards your price.

While the formula that you come up with will never be 100% for every job, it should get you consistently closer to where you want to be in terms of profit per job, money per man hour, or actual profit on the job. But face it, two of the worst thing that window cleaners have told me that happens on jobs is when you finish and you know you did not make what you needed to on the job OR you provide the estimate and the client says “That’s it! The last window cleaner was more than double that!”

Either way, pick what your profitable pricing is and try hard to get as close to that as you can for every job you do.

Talk to you soon!

Mike

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