Top 10 Pest Control Pricing Strategies
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Elements of the pricing mix
What does it cost to deliver your service.
What does I cost to sell your service.
What will it cost to perform a one time service.
What will it cost to perform a preventive service.
What will a call back cost.
What does it cost to promote your service
Analize your marketing costs
Analyse your advertising costs
Analize your branding costs
In order to arrive a pricing strategy you have to know the following
Know your Costs
Cost of Goods Sold
Service Fleet Expenses
Travel & Entertainment Expense
Bank Service Charges
Licenses and Permits
Postage and Delivery
Advertising & Marketing
QuickBooks Payments Fees
Technical Trainning Expenses
Things to know for a pricing model
Know your Competition
Know your Objectives
Know your Positioning Strategy
Know your Target Market
Ten Pest Control Pricing Models
1. The Competitive Pricing Model Tthis is an apples to apples comparison and price matching, this is the easiest way to set up pricing but it usually stagnates prices and commoditized services.
2. The Penetration Pricing Model
You set a low price to increase sales and market share, once you have captured the market share then you increase your price. Do have the branding and deep pockets to wage a price war.
3. The Skimming Pricing Model
You set an initial high price and then slowly lower your price to make your service available to more customers. In order skim profits of the market layer by layer similar to the diffusion of innovation.
4. The Service Line Pricing Model
Is your good better best type of pricing strategy
Good is general pests ants and roaches
Better adds rodents
Best adds fleas, ticks and mosquitoes
5. The Bundle Pricing Model
All inclusive in bundles a group of products at a reduced price. You might bundle GHP, L&O and add mosquito control and save 15%.
6. The Premium Pricing Model
Is high set to indicate that the product is “exclusive” I.e Bentley, Rolex and Ben and Jerry’s Ice Cream.
7. The Psychological Pricing Model
The best example of this is wallmart with its .97 and .88 versus .99 or 1.00
8. The Option Pricing Model
This is similar to service line pricing, but very difficult to use in pest control, who wants a particular pest excluded. Now includes bed bug service.
9. The Cost Plus Pricing Model
Is simple you mark up you service based on simple costs like labor and materials, this is mor difficult than it appears for service, you can use this for straight products sales like a wall lamp that the customer can just plug in themselves. Typical mark up is 40% to 50%
10. The Value Based Pricing Model
Considers the value of the product to consumers based on the benefits rather than how much it cost to deliver it.
Great topic, on point and valuable information. I’m looking for the cost analysis sheet you mentioned. I can’t wait to run one on my company. Thanks
I just recently discovered your podcast and have been working my way thru the archive. I just listen to the Top 10 pricing strategies episode again. I feel this would be very beneficial to all in the business including the route techs. This podcast got me thinking about why/how the higher ups make certain decisions and how I can improve the value of my route.
I’ve been thinking about making the leap into self employment. I’m sure I’ll listen to this podcast many more times before I do. Thanks
your welcome more coming on monday