September 10, 2008
Actual Cost Versus Perceived Value
One of the biggest issues many LCO’s face is trying to figure out how to charge for their services. Some experts suggest a percentage over cost. Other recommend an hourly fee plus some charges for overhead. Well, I’ll leave the actual how-to pricing strategies to the experts but one thing I will say is the ONLY thing that really matters is the VALUE.
That’s right, it doesn’t matter what the price is as long as the perceived value, in the minds of your customers, is equal to or greater than the price they’re paying for your services. So even if a job only costs you $5 in hard costs (labor, supplies, time, etc.) but to your customers is worth $100, then by all means charge $95-100.
So stop looking at your services as a cost-price equation and start looking at it as a price-value equation. Find out what your customers expect in terms of value and start pricing your services accordingly.
Filed under Lawn Care Marketing, Marketing Costs by Chestin
