I worked with a contractor looking to improve his bottom line, which was suffering mostly because it was costing him too much to produce the volume of work he was doing. As soon as I suggested he needed to bump up his markup, he declared, "I can't raise my prices if I want to stay competitive!"
Don't Compete ...
When I hear the word "competition" in a business context, I think of the old gasoline wars of the 1950s, with two filling stations offering precisely the same products and services squaring off on opposite street corners and slashing their prices. Or I imagine car dealers and chain stores offering to match the competition's prices on identical products. But if you can't make what you need by staying within the flock of same product/same service companies, then you have to find a way to be seen as something unique — and uniquely valuable.
... Differentiate Yourself
A while back, a local subcontractor took out a half-page ad in a major periodical that said simply, "We return phone calls." They'd identified the one thing that drives homeowners and general contractors nuts around here — the failure to receive acknowledgment, much less service. Their stated policy — to call people back — lifted them out of the crowd. Once you've separated yourself from "the competition," you don't have to worry about staying "competitive."
The key to successfully charging more is to make sure you're delivering unique, superior services. The quality of your customer's experience will identify you as either a top-notch service provider worth every penny or a price-gouger who delivers run-of-the-mill products. In these times particularly, people place as high or higher value on their time as on their money. They will gratefully pay more for dependability, promptness, and follow-through. Be exceptional, and there will be no competition.
