How to set your prices.

Thumbtack Writer PhilippaB
Thumbtack Writer
3 22 3,344

Prices.jpg

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.

22 responses
Moderator Meckell
Moderator

Very insightful! @ChefPaulStaley, what are some of your best pricing tips? 

lesmok
Level 6

Have you ever actually run a business and had to negotiate a competetive price with a potential customer?

ChefPaulStaley
Level 7

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.

Moderator Meckell
Moderator

Thank you @ChefPaulStaley!

twintroubleinc
Level 5

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.

MagnoliaPonds
Level 1

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.

emily
Level 5

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.

Valente2700
Level 4

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.. 

Dalecooper82
Level 5

Hard to keep your prices competitive when talking to a potential customer costs $30.00

JMcRae
Level 4

I don't think customers like that I've raised prices to cover the outrageous costs on thumbtack. 

TaSheen
Level 1

I am pretty much losing money on Thumbtack at the moment. I've paid for many contacts but when only one hires, it kinda defeats the entire purpose. I'd been better off using my budget for facebook ads to reach thousands of people. 

edgewilliam
Level 4

No my whole thing was you have to be able to set the price first I haven't been able to see my pricings in a long time and I've already called numerous times and spoke with people about getting it fixed the last 3 weeks my Thumbtack app and my PC has been more or less down because I haven't received nothing every time I call it says I'm going to get it fixed but I know how it is everybody's busy

Moderator Meckell
Moderator

I want to see what I can do to help @edgewilliam. Will you send me a private message with more info on what's been going on with your account? 

twintroubleinc
Level 5

I just wanted to update on pricing, I've learned a couple of things and have been able to do better with thumbtack. I've been bidding on the right jobs and I'm not paying that much out for leads and winning a lot more jobs. So for me it's been getting a little better. 

twintroubleinc
Level 5

but I have a question, what is the difference in levels, what does leve 5 mean for me?

Moderator Kameron
Moderator

@twintroubleinc great question! The level shown refers to the pros amount of activity here in the Pro Community. 

webguru
Level 4

Where do you set pricing? The info on the site doesn't match what I see, there are no options to set prices. Also my profile is being limited to 10 reviews despite having over 100 in fb, google, etc. It's not very clear on how to proceed here.

Moderator Meckell
Moderator

@webguru the services that you offer have more variables when it comes to pricing and it's tough just to give a price upfront without knowing any extra details. Because of that, there isn't the option to set prices for your services. Don't worry though, we're working hard to get this figured out! At this time, I'd recommend giving a rough outline of what you charge in your profile. That way, customers can know what to expect before they decide to reach out to you. 

 

We allow you to transfer up to 10 reviews from past customers who you didn't work for on Thumbtack. The rest of the reviews you'll receive will need to be from customers who you work with on Thumbtack. 

 

Let us know if you have any other questions!

Cjwilson89
Level 2

@PhilippaB wrote:

Prices.jpg

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.


 

ScottArcangel
Level 7

@PhilippaB @Meckell 

 

Is this still an active thread?

 

"Setting prices can be nuanced work. It all depends on different factors, from cost of materials to market demand."

 

I agree! That is the point I've been trying to make for months and months - that giving a simple rate per hour is a terrible way to set pricing, confusing for clients, and doesn't allow for the variety of factors you laid out in the article. I would love Music Entertainment category to have the pricing options that the DJ category has - as our gigs are so similar.

 

Thanks

DJStevie
Level 12

@ScottArcangel 

I find it difficult to charge by the hour as I have set packages. Trying to set hourly rates is tough, but tried it at the suggestion of a rep. I got burned twice when quotes were sent. One instance, a Job Poster saw a 4 hour quote and I had to adhere to it, even though my package was for 6 hour.

There has to be a better way for you, I and others within the entertainment categories to provide pricing, and not by the hour. Not every category charges by the hour, which is something that I feel Thumbtack never took into consideration when setting this system up.

DJ Stevie 5-23-2019

Moderator Kameron
Moderator

@ScottArcangel it is still an active thread. You've made a great point here about the need to be more specific with your prices and I'm glad that it's feedback that you've previously shared with our teams to look into. I've made sure to reiterate this feedback from my end as well.