Lowballers are people that charge customers low prices and try to copy everyone else in the business and think they can build up a good business charging competitive prices. The fact is that these people know nothing about business and how business finance works. They have no idea how to differentiate their business from others or how to add value. In the end they always go out of business because they don’t make enough money to stay around for very long.
How many times do you do an estimate for people and they say “we used to have a gardener, but they have stopped coming”? Well, that’s because they were “lowballers” and went out of business because they couldn't work out how much to charge.
Just charging £10 an hour only cover someone’s basic wage, let alone, all their overheads like the cost of machinery, strimmer cable, mower blades, mower repairs, lost tools, leaflets, business cards, computer and printer, fuel for the mowers and strimmers, fuel for the van, the van HP, road tax, insurance, business insurance, vehicle repairs and servicing, advertising.
When you work all those costs then add a mark-up of 60%, you will find that you that you will need to be charging £30 an hour, plus.
Did you know that only 5% of customers decide on price? Most will decide on quality, reliability, qualifications, and most of all on the way you look and talk to them.
The 5% of customers that do decide on price will obviously get lumbered with a lowballer, which is good for businesses like ours, because we don't want or need those sort of customers.
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Hey Adrian, great 'general advice' as always. I've come to like your posts however blunt they may appear.
(note to self: try and be as blunt as Adrian :-> lol)
Cheers, Eugene
+1
Where are the statistics from ?
Hi Adrian,
you've basically said what ive told new customers dozens of times- How many times have we heard "the other guy used to charge £x, why is your quote so much higher"? We all know why, he was your stereotypical lowballer, in the game for 12 months until he realised he was better off stacking shelves at Asda! They do tend to lull customers into thinking that lowest price is best though, and i sometimes have to stop myself from attempting to justify my prices! If they dont want to pay a professional with experience and professional tools they will pay peanuts and get monkeys!
Here is a good way to offer prices, it's called Decoy pricing:-
This method of pricing where the seller offers three products, and where two of them have a similar or equal price. The two products with the similar prices should be the most expensive ones, and one of the two should be less attractive than the other. This strategy will make people compare the options with similar prices, and as a result sales of the most attractive choice will increase.
Could you please give an example as I don't quite understand.
Thanks
Well, lets say you are quoting for a lawn mowing job.
You have advertised that you do lawn mowing for £10,
When you give the quote you give three prices.
You would say "To have you lawn rough cut will cost £10, or to have it mulched will cost £20, or to have it striped with a roller will cost £20".
They will always pick the most expensive, but you have trapped them with an advert that was quoting £10.
http://hbr.org/product/customer-loyalty-collection-how-to-increase-...
Gary RK said:
Did you also know that you can use military style tactics to do your marketing, like the Sun Tzu's "The Art of War"?
Richard Gadsby said:
Whatever their source, I think what is vital they are tried and tested approaches.....
Adrian Noble said:
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