Because of the COVID-19 pandemic, your team likely services units, sinks, and hand sanitizer stations more frequently. Your suppliers have probably increased prices while your portable restroom business blows through its stock of hand sanitizer at rates you’ve never seen before. Yet, even as your workload increases, customers are still asking for discounts or flexible payment options, aren’t they?
PROs face diverse challenges when it comes to staying in business and making a profit. Your pandemic response impacts customer experience, retention, and your reputation. Explore ways to satisfy your clients without underpricing your services.
Q. Should I raise prices on my portable sanitation products?
A. The short answer is yes. Few PROs can afford to eat a price increase and risk making zero profit on the sale of sanitation products. However, it’s vital to look at your pricing on a per-product basis. For instance, doubling your hand sanitizer price during a pandemic doesn’t reflect well on your company regardless of what you’re paying.
Q. Are extra service visits included in the regular rental price?
A. Many PROs have reacted to the COVID-19 pandemic by servicing units more often. Yet, we’re facing a crisis that may continue for months. It’s not sustainable to do double or triple the work for pre-pandemic prices. You may want to adjust your rental prices to include extra services. If you don’t feel this is possible, then consider:
Q. Will offering discounts during a pandemic increase my business?
A. Discounts are a risky marketing tool even during non-emergencies. Think about which customers ask for discounts and the reasons behind their request. Can you address their concerns by bundling your services differently or extending their payment terms? Consider making these decisions on a case-by-case basis instead of giving a deep discount to everyone.
Q. What is price gouging, and how does it affect my sales?
A. Every state uses different numbers for price gouging. The general idea is that you have the right to charge whatever it costs you plus a markup. Typically, when prices jump more than 15% over pre-pandemic pricing, it may be considered price gouging. Whenever you hike rates during an emergency, you risk blowback. Manage your reputation by adjusting prices and using your marketing to support your decision.
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When raising prices, it’s often not the amount of the increase, but how your clients perceive it. That’s why it’s essential to adjust your marketing, messaging, and possibly your contracts. Start by guiding the conversation:
This is also a good time to review existing contracts or reword new agreements. In some cases, you may need to renegotiate contractual terms to account for extra services. Or, consider adding a clause in long-term contracts that allow you to raise or lower certain costs or use different products during the pandemic.
There is no one right answer when it comes to pricing during a pandemic. Make data-based decisions that protect your profits while satisfying your clients. With the right messaging and a pandemic plan, you’ll find that you can build better relationships and help customers through this difficult time.
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