How to be competetive in pricing?
How to be competetive in pricing?
(OP)
Just wondering if there are any strategies to determine if you are competitive in pricing in your market? Our company is a small, mostly residential, structural firm doing renos, customs, and spec homes. We would love to know what others in our area are charging to see if we are greatly below everyone else or on par.
Any tips?
Any tips?
RE: How to be competetive in pricing?
I find my proposal exploding as of late. My clients tend to be "shocked" by my numbers. I believe this has caused me to lose quite a few projects. However, for some reason, the projects I am working on tend to require way more of my attention then they should (ie, the time associated with projects is much larger than what it used to be/should be). I believe this is causing my proposal explosion.
RE: How to be competetive in pricing?
Problem solving project? You can really undersell yourself there. Sometimes our most valuable work occurs in the first 2 hours. See a solution that is $40k less than anyone else has come up with, what do you charge? Hourly rate x 2 hours = bad idea.
RE: How to be competetive in pricing?
RE: How to be competetive in pricing?
This more than anything. An engineer to crunch the number is a dime a dozen. An engineer that can put together a neat pile of work with excellent drawings and minimal errors is rare, but still just a commodity.
An engineer who can walk into a concept meeting, drive the design in a direction from the early stages that results in a smooth running project for all parties he affects, is the golden boy. If you wow a client/project team on that front, you can charge double the competition, even with average designs.
RE: How to be competetive in pricing?
RE: How to be competetive in pricing?
One way I'm experimenting with to help close the deals with shoe-string-budget clients is to divide the projects into "essential" and "nice-to-have" parts. The core of the quote has the essential stuff, and the options are quoted separately. The client can more easily swallow the cost of the essentials, making the deal more likely to close. I give them some time to later add in the options, but not too much, and certainly not after we've packed up to go home.
It takes a bit extra work to quote the nice-to-have stuff because the price for it stands out on its own.
Make sure you have a narrative for each part of the project, especially the core, so that you can clearly discuss how you view the essentials as not sub-divisible.
Not when bidding for guvvermint contracts.
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RE: How to be competetive in pricing?