How to Increase Your Prices in the Construction Industry
As a result of Covid-19 restrictions, there has been a shortage of materials for the construction and manufacturing sectors due to ‘Lockdown’ which has increased the demand for supplies.
In addition there has been a shortage of skilled tradesmen due to an increase in work. Combine that with fewer supplies, and there you have it, a high demand from customers ready for their projects to get started. So in such an unusual economic climate, do not be surprised to see an increase in the price of supplies now or in the near future. Have you yet planned for this? If not, with an expected increase in wages and cost of goods, if you are not ready to put your prices up, your margins will be squeezed and you may be making less profit next year than you did this!
How to Increase Your Prices
Be open and honest with your price increases. Do not try and hide them because it is always worse when your customer finds out later and this may damage their trust in you. Every one knows there is a surge in the construction sector and that supplies are not in an abundance as pre lockdown. Let your customer know how long it has been since your last price increase. Your loyal customers will accept it and for new customers, why not offer your new prices as if they were always in place?
Certainly holding back from increasing your prices will reduce your profits. Failure to increase your prices will eventually impact the quality of service and time you can offer each customer.
You cannot please every customer and some will leave you, but ensure you keep in touch with them by marketing your services etc, because they are likely to come back to you. Why? Because they will have been exposed to that cheaper option that lacks the quality of service you provide. They will want to come back to you for your high quality service, quality materials, great staff and your price will be less important. So always hold firm with your price increase. Be confident of your value and remind them of the benefits they get from dealing with you. With consistent marketing of your services, your clients will be reassured and want to stay with you. Now you have just educated your customers to expect a price increases in January! Why not make this happen every year?
To summarise:
- Understand why you are putting your prices up
- Communicate the reasons to your customers
- Take advantage of an increase in demand for your services
- Ensure your Marketing reflects the features & benefits of why people should choose you over your competitors
- Be confident and hold your nerve
If you’d like some support or advice with increasing your prices and positively impacting your bottom line, get in touch with us today to set up a no-obligation chat: 01752 220 377 |
