Get a Firm Grip on Competitive Pricing Using These 4 Questions

Vince DiCecco is a dynamic and sought-after seminar speaker and author, with particular interest in business management/development and marketing subjects. With over 20 years experience in sales, marketing and training, he is presently an independent consultant to businesses looking to sharpen their competitive edge. Vince addresses a wide range of topics focused on nurturing customer loyalty while improving profitability. He may be reached via email at vince@ypbt.com.

Chances are if a customer will readily look down the block to save a few bucks, they may never fully appreciate all you could do for them or what you “bring to the dance.” However, if you find that you continue to lose a significant number of jobs to the competition because of a lower price, I suggest you do some soul searching. Here are four questions you should consider:

  1. Did I take the time to listen and fully understand the level of quality, service and delivery the customer was looking for before I quoted the price?
  2. Did I over-engineer the proposal—i.e. plan to use higher quality materials than the customer needed or include some other aspect of service that the customer never asked for?
  3. Are my costs for the specified job excessive, either in cost of raw materials or labor?
  4. Did you adequately explain the plan and process—all the things that you would be doing for the customer—in filling the order along with communicating the price?

Once you are convinced your costs of goods sold are in line with the industry average for your geographic area, hold firm on the prices you need to charge to be profitable and remain in business.

—Vince DiCecco, Your Personal Business Partner