For many business owners including Christmas light installers, setting prices is a sensitive topics. Many people feel that they have to set prices low to be competitive with other businesses. When you are trying to bring in new business, it can be tempting to use price as an incentive. But cutting your prices is invariably a mistake. Understand that there is always someone willing to do a job cheaper than you, but that doesn’t mean it makes good business sense long term.
In the seasonal Christmas industry you will never have a good and profitable business trying to build it on being the low cost provider. You are not Wal-Mart, the customer does not come to your warehouse, you do not have a platform to sell billions of products year round across the globe at low margin and do okay based on volume at the end of the day. You are a seasonal service based business, your most valuable asset is skilled hardworking installers, you do custom work, you go to your customer’s location, your window of opportunity is very small. No one is in this business working countless hours in the busy season does it out of the sheer love and spirit of Christmas. You do it because you want to get a paycheck! If you do it just for the fun of it, you are not operating a business you are operating a charity. Which is great if you have the time for that but most of us do this to provide for our families.
You do not want customers who like the low cost providers and have no loyalty. Long term the low cost providers never win and never stay in business. The low cost provider will lose all of his low end price conscious clients the second there is a downturn in the market. If the low cost provider has one client who does not pay it could kill the profit he did make on 6 to 8 of his other low margin jobs.
If someone is doing a job significantly cheaper they are probably cutting a corner somewhere.
Maybe the trees in their quote have fewer strands. Maybe they have the wrong count or forgot an item. Maybe they plan on giving the customer old used décor they have extra from another job. Maybe they are paying their employees under the table. Maybe the price does not include maintenance through the holiday season. Maybe the price does not include the storage of the product. Maybe the price did not include the needed lift rental to complete the job. Maybe they are cheaper because they don’t have insurance. Your customer needs to understand that if the holiday lighting and decorating experience does not go well it reflects on them and will become a problem for them if it does not look good or work properly.
Not sure how to bid a Christmas light installation job?
Our comprehensive webinar will give you the training and knowledge that is necessary for you to start this business. Our webinars are very thorough and detailed. We cover EVERYTHING that is covered in the (2) day training seminars including estimating jobs.