1. Do your research.
Setting prices can be nuanced work. It all depends on different factors, from cost of materials to market demand. If the prices in your area are a mystery to you, Thumbtack’s pricing data might be helpful. You can check out average local and national prices in your industry.
“You need to be priced competitively. Often clients have a number in mind, so knowing that number and what your competition will charge is important for picking a reasonable rate,” says Top Pro resume writer Tiffany Cruz.
2. Raise your prices as you build your business.
Are you just getting started? Or has your company been in the game for awhile? The stage of your business matters. Even if you provide amazing service, customers won’t pay premium prices for a pro that has no reviews or established reputation.
“In the beginning I figured that offering a high-quality service meant charging top rate prices. Of course, we didn’t have any jobs under our belt so that wasn’t going to happen. I brought the price down to a reasonable rate to get my name out there and business has been growing ever since,” says Jonathan Johnson, whose photo booth company has been hired 200+ times since opening its doors on Thumbtack.
If you’re still building your reviews, charge at a lower rate, like Jonathan. As your company grows, raise your prices. You may worry about losing customers when you begin charging more, but remember that new prices can open you up to a whole pool of potential clients who will pay more for quality service.
3. Be transparent from the start.
Talking about money can be awkward. But the sooner you discuss prices with your customer, the easier the conversation becomes. Top Pro house cleaner Paige Rounds schedules an “onboarding call” every time she hears from a customer. The 10-minute chat covers timing, products and price.
“We make sure [everything] is clear to the customer before we schedule an appointment. We don’t want to show up expecting one number only to discover they expect something totally different,” says Paige.
Another way to be transparent about prices is to get it down in writing: a pdf of an estimate or a standard service agreement. Or an email, at the very least. As long as it’s something that a customer can refer back to in case there’s any confusion over price.
What are your best pricing tips? Tell us in the comments.
Pricing can be tricky. There are a lot of factors that go into setting the correct price for a client. Having accurate and extensive information on the job is essential. The first and most important step that we take is to set up an initial phone consultation to discuss the details of the job with the client. We can then answer any questions that they have, but more importantly find out the exact services that they will need from us, including their desired budget. I always try to get as close to their desired budget as possible and if I go over, I explain where the extra charges are coming from with a line-item invoice.
Key factors that I always consider when pricing are food costs (ie what is the menu that they want to have), and labor cost (ie full service vs simple drop off, do they need clean up, set up, tear down etc). Once I know these things, the pricing almost sets itself.
Other factors also come into play, such as seasonality, distance to the job, rental items, do I need to set-up a kitchen on site or is their one already there, etc. But I am always transparent with these charges and believe in a no-sticker-shock approach to daling with each client.
I also believe in fair trade of services, so even if I think I can over-price and try to get more out of a client (common practice in almost every industry sadly), my pricing formula always remains the same.
It takes a little while coming up with the correct pricing formula for each business, but it is important to remain consistent and honest. Nothing will turn off a client quicker than them thinking they are being taken advantage of or being price gouged.
The problem with pricing on thumbtack, is that we are competing with other pros, so we need to be mindfull that if we give a high estimate we will lose the job. I've bid for 3 jobs the last 2 days, all three contacted me, and I thought I won all three jobs, but it turns out that only one schedualed so so far I'm actually losing money. the job I scheduled was for $75 and the 3 leads cost me $60 so when you count time gas and money I'm losing a lot of money. that is why I'm turning to SEO and home I can start getting leads without paying.
You left out the main item... the one that most suits who write these articles leave out. You first mention "you must be competitively priced." You must FIRST AND FOREMOST be PROFITABLE. Without profit, you are on your way out of business. It is plain and simple. Many in my industry have left because they were competing on price and had cash flow but not enough to stay in business long term. The problem with most lead generation contractors is they do not have enough business and then to do it for less money than it takes to pay overhead, expenses, and have a reasonable profit is a death wish, a slow and painful death wish.
Can I set a range for my hourly rate? Currently, I can only set one number. But my rate varies depending on the complexity of the client.
I have been quite successful on Thumbtack the past 2 years or so and attribute much of the success of my business to them. That being said as far as setting prices and knowing what to charge, I am in the Finish Carpentry business and from my experience and trying different techniques I have learned that Most of the jobs I bid on do not include all of the details I need to provide an accurate price point. Most of the time and I say 95% of the time I do not provide pricing because of that. My goal given my confidence in my ability to speak with and interact with my potential clients is to have a one on one with them through an initial conversation that I mention in the initial quote, that I would like to discuss further details with them on there project.
Once I am able to speak with them I know I have my foot in the door and a much better chance to land the job then my competitors. During that initial conversation I set up a day and time to provide a free in home estimate even if I have all the details I need for the project to bid on. I do this because I know 90% of the time once I meet with them and showcase myself in person and my clients see how professional I am and how comfortable I can make them by choosing my services over others. I rarely lose out to other pros and being that I have reached top pro status this has further helped my business and I thank thumbtack for rewarding us pros for the hard work we do and the level of service we provide to our clients. Hopefully this helps. This isnt a must do for all pros but it's what has worked for me through trial and error. There has been some frustrating times early on but over time you begin to learn how and what works and what doesnt. Word to the wise is dont rely solely on Thumbtack for your business. Its a great platform and you can be very successful but you must branch out and try different techniques like networking or creative advertising or using Google my business so clients can find you. I know all of what ive said this far doesnt relate to pricing but I thought this tid bit of info can help you going forward. Thanks for reading..