Gas Work Pricing

[Ray Stafford]

I charge £50 for a service mainly because if i went higher i probably wouldn't get much work due to the fact nigh on most around here charge around £50.

I was thinking about this today.

The problem with a gas boiler service, is that it has become a commodity. No one differentiates between a good service, and an ordinary service. Or a convenient service vs an inconvenient service. Believe it or not, but there are dozens of books on pricing strategies that help solve problems like this.

In reality, hammers will be half right, and half wrong. Sure, there will be people out there who are very price sensitive, but not all. Others will be sensitive to quality (so long as they understand what quality means in this context) or to convenience or to other things. We all know that some people are very sensitive to "reputation of service provider" - hence using BG.

I don't know enough about the job to define this exactly, but I am guessing that there is a difference between the bare legal minimum and what most responsible engineers would consider "best practice" ?

So create three products:

Basic Service (bare minimum)
Service Plus (best practice)
Deluxe service (best practice, plus some items that are not necessary, but might be useful, or put customers minds at rest)

Given the choice of 3 options, SO LONG AS THEY CAN SEE SOME VALUE DIFFERENCE, most people will take the middle option.

Then price in convenience:

09:00 - 16:00 weekdays. Basic service £50, Service plus £75, Deluxe service £99
07:00 - 09:00 or 16:00 - 18:00 weekdays. Basic service £60, Service plus £85, Deluxe Service £109
Weds evening 18:00 - 21:00 or Sat AM 09:00 - 12:00 Basic service £90, Service Plus £110, Deluxe Service £130.

It doesn't matter what the actual prices are - the important thing is to get differentiation.

Sure, most will still go for the £50 option, but some will trade up. Some will trade up a long way.

If you only offer a cheap option, 100% of your customers will get the cheap option - even those who would have paid more. You have to give them the option to pay you more!

 

[Masood]

I was thinking about this today.

The problem with a gas boiler service, is that it has become a commodity. No one differentiates between a good service, and an ordinary service. Or a convenient service vs an inconvenient service. Believe it or not, but there are dozens of books on pricing strategies that help solve problems like this.

In reality, hammers will be half right, and half wrong. Sure, there will be people out there who are very price sensitive, but not all. Others will be sensitive to quality (so long as they understand what quality means in this context) or to convenience or to other things. We all know that some people are very sensitive to "reputation of service provider" - hence using BG.

I don't know enough about the job to define this exactly, but I am guessing that there is a difference between the bare legal minimum and what most responsible engineers would consider "best practice" ?

So create three products:

Basic Service (bare minimum)
Service Plus (best practice)
Deluxe service (best practice, plus some items that are not necessary, but might be useful, or put customers minds at rest)

Given the choice of 3 options, SO LONG AS THEY CAN SEE SOME VALUE DIFFERENCE, most people will take the middle option.

Then price in convenience:

09:00 - 16:00 weekdays. Basic service £50, Service plus £75, Deluxe service £99
07:00 - 09:00 or 16:00 - 18:00 weekdays. Basic service £60, Service plus £85, Deluxe Service £109
Weds evening 18:00 - 21:00 or Sat AM 09:00 - 12:00 Basic service £90, Service Plus £110, Deluxe Service £130.

It doesn't matter what the actual prices are - the important thing is to get differentiation.

Sure, most will still go for the £50 option, but some will trade up. Some will trade up a long way.

If you only offer a cheap option, 100% of your customers will get the cheap option - even those who would have paid more. You have to give them the option to pay you more!

That's a very interesting persepective Ray. It does hold true in so many areas - people will turn their nose up at supermarket own-brand goods and pay a premium for branded goods that are made in the same factory, to the same recipe and process.

I'm going to adopt this tiered pricing strategy. I will report back!

 

[Masood]

I don't diiferentiate. My rates are:

Mon-Fri:
8:00 - 18:00 £65/hr
18:00 - 08:00 £97.50/hr

Weekends and bank holidays:
08:00 - 18:00 £97.50/hr
18:00 - 08:00 - £130/hr

Boiler service (not back boiler) is £75 + parts
Landlord cert is £75 for boiler and hob / freestanding cooker. Fires additional £25 each.

 

[jtsplumbing]

A lot depends on your location & the amount of completion that you have, makes no difference what you charge someone will always undercut you.