When it comes to running a plumbing business, I don’t think there are many people who wouldn’t want to take more money home. 

The profit you take home is basically the extent to which your business has the ability to change yours and your family’s lives.

The 80/20 principle which applies to the plumbing industry shows that 20% of plumbers make around 80% of the money. This unfortunately means the average plumbing company is doing poor to average at best.

Where would you rather be? 

In the 80% who are worse off, or the 20% who are better off?

Most plumbers, when they first start a plumbing business, have to get a few things in place, such as:

  • Work van
  • Plumbing tools
  • A company name and branding
  • A decision on the kind of jobs they will undertake
  • A pricing strategy (a decision on what will be their hourly rate and how much they will charge for certain jobs) 

Plumbers who are just starting out will often make their decisions on what to charge, based on what other plumbers are charging. 

Then they might think to themselves, ‘I’ll do it a little bit cheaper because I haven’t been doing it as long as they have and I don’t have the overheads they have.

But, remember the 80/20 rule. Most plumbers are doing ‘average to poor’, so it’s most likely that you will have copied a pricing strategy that doesn’t serve you well or match your worth.

Often people don’t really ever change things as time goes on. They just stick with what they have in place. 

BUT… in the meantime, other things DO change. Supplier costs go up, marketing costs go up, petrol costs go up, van insurance costs go up, tools need replacing, etc, etc.

If you’re looking to make more profit, here are five ways that you can unlock higher pricing and ultimately make more money

1. Put your prices up

I don’t know what you were expecting, but this is the most effective way to make more money. 

The fact that you are reading a post like this tells me that you care about your business. Therefore, you most likely care about your customers too – after all, they are the ones keeping you in business. 

You are probably worth more to them than you think. While jobs might seem easy to you, the service you provide is a valuable one for those who aren’t in your industry.

Here’s a challenge. Do an experiment. Put your prices up by 5% and operate with those new prices for one month. 

At the end of that period, assess how many jobs you lost due to pricing and how much extra profit you made as a result.

The hardest part in this exercise is not convincing the customer, it’s convincing you. You must believe you deserve the price increase, or you’ll sabotage the whole activity.

As Seth Godin said: ‘If your customers only buy based on price, it’s because you’ve given them nothing else to value’.

Just be aware, there is a limit to how high your pricing can go, but most people are nowhere near that. (It’s that 80/20 rule again). 

Ultimately you need to find out (with evidence) where that limit is, not through guesswork, opinion or fear, but through properly assessing the value and importance of the work you do.

2. Move away from hourly pricing

Hourly pricing is one of those ‘industry norms’ that everyone seems to adhere to, but there are a few fundamental flaws with this model…

It promotes a time for money culture. The vast majority of people know their hourly rate, therefore if your rate as a plumber is £120 per hour and their rate in their job is £20 per hour, there’s the chance of a perceived ‘fairness imbalance’. 

They might think it’s criminal that you can make that kind of money.

They don’t think for a minute that that money has to cover your overgrowing laundry list of expenses, which is bleeding you dry.

Another reason to move away from hourly pricing is the fact that customers don’t like that model. 

It’s open-ended and scary! ‘What if the job takes many hours?

‘Surely you are incentivised by jobs dragging on longer than they should?’

These thoughts create anxiety and they will feel safer with a fixed price and the knowledge of what to expect.

I’m not saying you shouldn’t form your prices based on timing, but just don’t present it that way for the customer. 

3. Compare Apples to Oranges

Whether you like it or not, plumbing is a commodity product. A commodity is something that any supplier can do – and, when it’s a commodity, there’s no difference between each supplier.

Customers then, therefore, will buy based on price, so you want to do everything that you can to portray your business as different from everyone else. These intrinsic differences are the points with which customers will formulate their emotional perception of what your service is worth.

So, what do you do differently? Have you got, for example: 

  • Better reviews
  • Faster turnaround time
  • Have you won any awards? 
  • Are you specialists in a particular brand of boiler?
  • Can you offer long warranty periods
  • Do you pride yourself on a thorough post-job clean up?

The more you differentiate from the norm in a valuable way and the more negative stereotypes you break, the easier it will be for the customer to see your value.

4. Add premium pricing and upsells

One of the best ways to increase your customers’ overall spend is to offer them optional extras which may make their lives easier. Leave it to the customer to tell you what they value, don’t make assumptions based on your own values.

Add upsells. What could you also add in to increase the sale value? Could you, for example, offer fast, same-day turnaround, evening or weekend visits, guaranteed time slots, queue jumping?

Whenever you present a price to the customer, let there always be two options – a standard option which you would normally have done and a premium option. If your premium option makes sense, a typical uptake rate may be around 20%.

Example: 

You could offer a standard boiler service and a premium boiler service. For the premium service you might offer to replace the parts which wear out and commonly cause problems, even if they are not broken yet, just to avoid potential issues further down the line. 

They might also get an extended guarantee, or a free heating assessment to check all of their radiators. The choice is yours, be creative.

Some people will just choose the higher price option because that’s the kind of person they are. Just make sure what you are offering is genuinely valuable and not unnecessary.

5. Multiply jobs and customers

Another way to make more profit is to turn each job into more jobs and turn each customer into more customers. By doing this, you’ll generate more work with minimum outlay. Marketing to existing customers is a lot cheaper than finding new ones.

For example:

  • Ask the customer to see if they want other work completing
  • Keep in regular contact with them so when they need work, they think to come back to you
  • Create a referral system where you actually ask for introductions to family, friends and neighbours

When you make the most of the opportunities that are there and pay close attention to your pricing strategy,  you will give yourself every chance of making the levels of profit that you deserve. 

So, why not get started today? 

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But getting that website to consistently and predictably bring in new customers month after month isn’t so easy.

If you’ve ever given it a go yourself, you’ll no doubt have experienced the difficulty. Getting anything working takes investments of money and time to figure out what works and what doesn’t

Thankfully, you have the opportunity to take an incredible shortcut.

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Reviews take time to prepare for and host so we can only do a small number each month.