Rule 7: Don’t worry about the firm down the street – make them worry about you
As already observed rates for surveying services tend to be set at the rate perceived to be the “going rate” for the area. Sure, there will be small variations, but generally speaking, surveyors are very sensitive to what “the other guy is charging.”
The paradox here is that rates tend to ratchet one way or the other, depending on which firm in a given area is perceived as a leader. You need to be a leader, not a follower. There are followers and there are leaders, and leaders prosper while followers wallow. Someone once observed that there are people that make things happen, those that watch what happens, and those who wonder what happened. Those who make things happen in the surveying profession are the leaders to which every other firm in the area looks to set the fee standard. They may not have the courage to accept the standard, and often will intentionally price themselves below the standard – but they are definitely aware of the standard.
I was once told by another firm that if I charged a certain rate, there was no chance I would ever do business in our market area. Guess what? They were wrong. The price increase, if anything, increased business. We’ll get into that later on, but prices for professional services often have illogical affects.
Since prices tend to ratchet towards those of the leading firm in a given market, why not be that leader? You don’t have to be the biggest firm to be the leader. A small successful practice can often set the standards. Wouldn’t you rather have firms reacting to your pricing moves than have to react to theirs?
Be a leader, the pack will follow.
Premium Pricing: How Setting Your Own Standards Elevates Your Business
Basing your service cost off of surrounding firms could be detrimental to your firm’s success and future work opportunities. You might think: “If I undercut the market value and going rate, clients will flock to cheaper services.” While this might work for some industries, such as fast food and retail technology, it does not always work in professional services.
Beardslee references this by saying that “…prices for professional services often have illogical effects.” These illogical effects involve a rise in cost leading to an increased demand and a drop in cost leading to a decreased demand. This phenomenon can be described through the term ”premium pricing.”
Premium pricing involves convincing customers that your services cost a premium because they are superior, offering above-market quality and unique features. Undercutting competitors, however, can have the opposite effect. While a slight drop in service price can increase affordability and stimulate demand, a larger price drop might leave your customers questioning the quality of your work. If a company like Apple were to drop their prices to undercut competitors like Google or Samsung, it would be detrimental to them too. They would be reducing profits, lowering premium demand, and leaving their customers questioning their quality.
In surveying however, it’s not enough to just deliver high-quality work. To charge premium prices, you will need to deliver exceptional customer service. Find out what is important to your clients and give it to them. At a minimum, this will involve:
- Effective Communication: Maintain regular, transparent communication throughout the project, keeping clients informed about progress and challenges.
- Building Trust and Transparency: Be honest about project timelines, potential issues, and costs. Address problems swiftly with a focus on solutions.
- Timeliness: Consistently meet project deadlines to uphold your firm’s reliability and professionalism.
- Personalized Experience: Understand the client’s industry to provide relevant services and adapt communication to their preferences.
- Proactive Engagement: Anticipate client needs and offer innovative solutions to add value to their projects.
Reputation and Branding
Becoming a credible and well-respected company is important in any business. By becoming a market leader in your surveying region, you portray your company and brand as well-established, reliable, and high quality. Clients are more likely to trust a company that its competitors follow and undercut.
Clients will flock to industry leaders just because of their status. Building a brand reputation by becoming the market leader will cause your company to acquire more contracts and projects than your competitors.
Time management and technological advancement
The most important aspect of being the leader is the ability to control the going rate and have other firms adjust to your standard. Trying to chase the market price and constantly adjust to it can feel like a never-ending rollercoaster and distracts you from working on what actually matters. Leading makes it so you can focus on client service and the quality of your work, which will speak for itself and attest to your premium prices.
Being a leader lets you utilize new technology ahead of your competitors. This can lead to an uptick in your business’ productivity and efficiency, positioning your company as an industry innovator.
Be a leader, not a follower. Once you do not have to worry about constantly price-matching your competitors, you will have a lot more time to better your own business. The great thing about your company now is that you are already a market leader, you just don’t know it yet.
To understand where you can offer premium services and raise prices, you need to understand your job costs and your best kinds of jobs and clients. Cyanic Job Book is a project management app designed specifically for surveyors that gives you all the data you need to know where you should be focusing your business. Take advantage of modern surveying business software to become a market leader and to stay ahead of your competitors.