Hardware Reference
In-Depth Information
You simply will not be able to remain in business if you charge too little to cover your ex-
penses.
You will come to understand what your parts will actually cost—so you should then look at
the competition for advice and see how they are pricing similar services and repairs. Also
find the competitors that you feel are doing a good job and that seem to be successful (see
chapter 10 for more about assessing the competition). One good indicator is to see how
long your competition has been in business—nothing communicates success like longev-
ity!
Your pricing strategy can be completed in one of several ways, but bear these ideas in mind:
Competitive Prices
Since your business is new, has no longevity, no customer base, no good reviews, no word
of mouth, you may just have to be priced in such a way as to attract customers. There is
nothing wrong with this approach, other than you make less money with each transaction
and therefore it will take you longer to reach your financial goals. The good side of being
competitive is that you will gain customers, which will give you a chance to get reviews
and good word-of-mouth advertising—and you can always raise your prices when you're
ready.
If you're going to price yourself below your competition, it's a good idea to also work on
your vendors and negotiate the best pricing on your parts and really shop around for great
deals on products that you will use to regain some of that lost margin.
Prestige Prices
You can take the opposite approach and if you have a good location or can offer some sort
of upscale service that demands a higher price, you can justify being more expensive than
your competition. If you guarantee same-day turnaround, offer a warranty that the other
guys don't, or carry certifications or experience that can be great marketing material, then
there's a possibility that you can be a white-glove service that can legitimately charge more
for services.
Psychological Prices
You can use a bit of psychology to determine your prices as a way to allow your customers
to perceive your pricing as fair by offering specials, deals, and value-added services that
boost your service without incurring costs.
Another common method is odd-pricing figures that end in 5, 7, or 9. It is believed that
consumers tend to round down a price of $9.95 to $9, rather than up $10.
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