First, the proposed service needs to be evaluated by the service provider in order to assess whether the job can even be done and, if it can, what conditions and special circumstances may apply. Points of consideration include accessibility to the job; degree of soiling or contamination; scheduling issues; special equipment or supply needs that might apply; and labor and skill issues. Once it is determined that the job can be done, and is indeed something you want to do, use the information gathered in the initial assessment to arrive at a base price for the service.
Next, determine if there might be a reason or reasons to modify the base price. Things to consider here that might work to lower your asking price below the base include size and frequency of the job; potential for gaining additional work from the same client; publicity or marketing value of performing this particular job; and the opportunity to use the job to fill an otherwise blank spot in the schedule.
Things to consider that might work to raise your asking price above the base price include off hour scheduling that might cost you overtime pay; special “rush” requests that reduce your scheduling efficiency; a particularly difficult or cranky customer; or a request for delayed payment. While none of these things relate directly to how you complete the requested service, they certainly may affect the profitability of the job and therefore need to be considered.
Once you have arrived at the asking price, it is time to develop a proposal that presents your information in the most favorable light. Many companies make the mistake of just quoting the price in a take-it-or-leave-it format. I feel the most effective proposals begin by outlining all the factors that create value for the service being proposed.
Don’t think anything is obvious. Outline all the small, positive elements that are included in the price proposed. For every feature, be sure you list the corresponding benefit to the customer. In addition to the description of the actual services being proposed, include in your presentation any special qualifications or certifications that the technicians have earned; any specialized equipment you will use; your years of experience in the field; and any guarantee of workmanship you offer.
These factors are intended to take away the prospective clients fears and build confidence in your company. Industry studies have shown that factors such as reliability, dependability and convenience can be as important to the customer as price when selecting a company to provide services. By building value, you are working to answer the question of “What is it worth?” as opposed to “How much does it cost?” Most people are willing to pay a bit more for something as long as they can see the value being provided for that extra price.
Whenever possible, present the prospective client with options or choices. Packages such as good, better, best or budget, premium and custom show the potential client that while you could provide the most basic service at very attractive prices, there are better values for just a little more. Marketers say that when three options are presented, consumers tend to select the middle one more that any other.
Finally, once you have made your presentation, don’t forget to ask for the order. Often times the issue of convenient scheduling opportunities can be used to move the discussion forward. Give the client plenty of chances to ask questions and always remember to say “Thank you” for the opportunity to present your proposal.