What Is Your Strategy for Setting Prices?

The core strategy for setting prices involves establishing a daily earning goal per crew and maintaining prices at or above that target. By ensuring the price does not dip below this goal, and filling the calendar with jobs, income increases proportionally as more crews are deployed.

Full Explanation

Pricing decisions revolve around a clear financial objective: the amount you want to earn each day from each crew. This targeted daily earning acts as a baseline price threshold that must not be undercut. The logic is straightforward—if the set price meets this earning goal and demand remains strong enough to book jobs continuously, income will rise steadily. The more crews you have actively performing tasks booked at that rate, the higher your total earnings become. This strategy aligns price with profitability without compromising on the financial goals set for the team.

Step-by-Step Breakdown

Set a daily earning goal per crew: Define the specific amount you aim to make each day from every individual crew.
Establish the minimum price based on this goal: Ensure your pricing per job does not fall below the level required to meet the daily target.
Maintain or raise prices as needed: Stick to this pricing strategy to sustain profitability across jobs.
Fill your schedule with jobs: Focus on obtaining enough bookings to keep crews consistently working.
Expand crews to increase revenue: With more crews running, and schedules filled, total daily income increases accordingly.

Real Examples

While specific industries or scenarios were not mentioned, the central idea is that setting and maintaining a price floor based on daily earnings ensures that every booked job contributes to reaching financial goals. If, for instance, a crew is scheduled to complete several jobs each day at or above the target price, the cumulative daily revenue aligns with established financial objectives. As additional crews come online using the same pricing model, revenue growth occurs naturally through scaling operations.

Common Mistakes

Undercutting the price below the daily earning goal: Reducing prices below the set target can diminish profitability and disrupt earning consistency.
Failing to fill the schedule: Even with correct pricing, not booking enough jobs will prevent hitting the desired daily income.
Ignoring the scale of crews: Relying on a single crew limits income; expanding the number of crews correctly is essential for increasing revenue.

FAQs

What happens if customers won’t pay the set price?: If demand at or above the set price is insufficient, reevaluate marketing or job-filling efforts to ensure the calendar remains full without lowering prices.
Can the price be increased beyond the goal?: Yes, as long as it does not reduce bookings, higher pricing can improve income.
Why focus on daily goals rather than weekly or monthly?: Daily goals provide immediate targets and ensure consistent revenue flow from each crew.

Key Takeaways

Establish a clear daily earning target per crew as the foundation for pricing.
Set and maintain prices at or above this target to guarantee profitability.
Fill crew schedules with enough jobs to meet daily revenue goals.
Increase total earnings by running multiple crews simultaneously at the established prices.