If you are finding it hard to raise prices to a reasonable level to give yourself a reasonable income, then this may be of some help to you in planing future advertising campaigns.
Before any customer will hire your services there must be some sort of benefit that the customer will enjoy by employing you. This benefit can be several things, but the main benefit is not having to do the work themselves, in other words, they either can't do the work, don't want to do the work, or haven't got the machinery to carry out the work. So what they want is the freedom from pain of having to do the work themselves. The more pain relief they get from not having to do the work, the higher the benefit is.
High benefit low price offers will be snapped up by by people on low incomes that can't afford to pay a higher price. If the price is raised then the benefit they receive declines, so there has to be a balance between the benefit they receive and the price paid.
High Benefit high price offers have to be targeted to people that require the service, need the benefits of it, and can afford to pay the asking price. For example if a Brain Surgeon on £500,000 pa needed the freedom from doing gardening work he/she would be happy to pay much more to have a good job done, then would someone on a low income.
So when you advertise your services it is best to stress the benefits the customer will get from your services and not the features you offer. The features of your service are secondary to the customer benefits.
Managing the price of your services depends on the market segment you are going to serve. If you are going to advertise your services to everybody that has a garden, you will need to offer high benefits with lowish prices. If you offer your services to a targeted segment of the population, you need to offer high benefits with a price that will suit that segment.
If your customers get a low benefit or even no benefit from your service, then they will more than likely cancel it.
If you decide to offer your services only to a higher paying segment of the local population, then your profits will be higher too.
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So what would you see yourself of the key benefits you offer, When thinking of a price increase. Are you saying you should emphasise this on the letter of the price increase. ?
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Hi John.
I agree with you to a certain degree. But surely the main benefit the customer is obtaining is that they are not having to do the gardening themselves, which gives them time to do something else that would prefer to do. Perhaps to go free fall parachuting, or just get the freedom of having to look after the garden while they watch TV, or maybe going on a cruise???
Try and watch TV ads to get some idea of how they attract people to their product/service, by not talking directly about their product/service.
Hi Chris
No. What I am saying is that you should emphasise the benefits the customer would get when you advertise your services.
So many people in this type of business advertise lawn Mowing, Hedge Trimming, etc etc. The potential customer isn't really in the features of your service, they are more interested what they don't have to do if they employ you.
If you look at an advert on TV for P&O shipping (who own many ships), they don't advertise their ships, they advertise what a wonderful holiday (the benefits) you will have if you book with them.
If you hired a painter to paint all your house, the main benefit would be that you would have time do something else other than watch paint dry. You could be in Spain having a knees up.
There is a book called Instant Advertising which is well worth a read and can tell you a lot more about advertising than I can tell you about on here.
I am constantly reminded by reading this forum that I am a novice ..... only been trading for 6 months... sorry 7 now :) But here's one of the ways I try to offer that added value, to help justify a higher rate than many locally.
I try to keep "time poor" people in touch with their gardens... so after each visit I will concoct a small email, hopefully with a couple of pictures of what I have done for them that visit - and what I plan to do the next.
The email also has a running "ToDo list", which contains anything I think of as a rainy day project, or the client has mentioned to me, and in the summer a "Things to do (for them) list" - like water those baskets / new bedding, spray weedkiller on the patio etc etc.
For instance on the list with my first client was building some proper compost bins, its been there since May last year, yesterday with the ground completely frozen the compost bins were started :).
There is also on the same list some larger projects, but the cash was not available for them to give the go ahead on those.... but I can relax in that I had work yesterday and next week with the compost bins !
They value the updates - and it generates a bank of potential work per client.
Any chance of emailing me some examples of some of the mails you send with the To do lists etc I really like that idea. I suppose you have to be a bit careful, i.e. If the weather is bad and you haven't done what's on tge list. I was thinking of sending once a month attached to the invoice somehow. Hope you have s good season ahead Chris
blades303@btinternet.com
It's very hard to increase the price of your services to existing customers, so if they are unprofitable then consider replacing them with new customer that are willing to pay a higher price right from the start.
Phasing in price increases whilst staying in control
http://landscapejuicenetwork.com/BOG/phasing-in-price-increases-whi...
I was talking to our local machinery dealer a few weeks ago and he told me this little story:
If the contractor had worked out the figures of what the mower was going to cost him, along with all the other costs like petrol, servicing etc. he would have found that by only charging £9.00 per hour he was in fact paying his customers to work for them.
The tractor mower fuel costs are £8.00 an hour, plus he has to transport the mower to the customer, plus transport time, plus mowing time. He should have been charging about £40 just to cover his costs, then add a profit margin and tax, his hourly rate should be around £120 an hour.
But instead of charging by the hour, he could have charged by the size of the area to be cut and increased his profit margin to a higher level.
Take a look at this.<br />
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Can't add link in this comment I'll add in a minute!
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