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Are You Charging Enough?

by | Oct 6, 2023 | Doing Work, Growing the Business, Management Skills, Workflow & Getting Paid

Pricing strategy is hugely important for gas businesses, but not always so easy.

As seen in Issue 174 (September 2023) of Registered Gas Engineer. 

Gas Engineer Software shares its insights to help you shape your pricing strategy.

Pricing isn’t perhaps the most thrilling of subjects but its importance is undeniable. Customers are more discerning than ever as they analyse prices and make highly considered purchases.

It’s important to get your pricing strategy right because it affects the amount of profit you make, the number of customers, and the overall success of your business.

What should you charge?

We’ve broken down the average price of common gas engineering jobs. For comparison, we’ve shown the average pricing figures from June 2023 and five years ago.

Region Median Labour Cost Median Gas Safety Cost Median Call Out Cost
June 2018 June 2023 June 2018 June 2023 June 2018 June 2023
Yorkshire and the Humber £38.00 £56.00 £56.00 £63.00 £55.00 £76.00
West Midlands £43.00 £53.00 £47.00 £54.00 £61.00 £72.00
South West £35.00 £40.00 £57.00 £73.00 £58.00 £71.00
South East £50.00 £60.00 £69.00 £74.00 £75.00 £70.00
London £75.00 £64.00 £65.00 £66.00 £76.00 £81.00
North West £41.00 £52.00 £51.00 £58.00 £56.00 £76.00
North East £32.00 £47.00 £53.00 £57.00 £60.00 £90.00
East England £52.00 £60.00 £52.00 £69.00 £62.00 £85.00
East Midlands £33.00 £43.00 £59.00 £59.00 £62.00 £68.00
Scotland £34.00 £49.00 £49.00 £50.00 £63.00 £64.00

The June 2023 figures show the average of where your competitors price themselves in your region. If you charge less than the average but are constantly filling up your calendar, you may wish to consider increasing your prices.

By striking a balance, your revenue will either maintain its level with fewer hours or increase with the same number of hours – a win-win scenario.

Don’t under-price

Setting low prices can look appealing and you’ll probably attract more customers because of it. But beware: lower prices mean less profit per job, and raising prices while keeping your customers can be incredibly tough.

You also need to remember that slim margins mean that it only takes one or two jobs that go off track to wipe out your entire month’s profit.

This is all without stopping to consider that the customers attracted by low prices are often not those who remain loyal and return for repeat business.

Success through strategy

Ultimately, every business needs to think about what their short and long-term goals are. Do you want to:

  • Maintain a small-scale operation?
  • Drive growth and hire more employees?
  • Position yourself as a high- quality service provider?
  • Run a highly competitive and economical business?

Pricing strategies play an integral role in achieving any of these. And it’s up to you where you want to position your company in the market.

We’ve noticed two distinct characteristics that separate successful businesses from the rest:

    1.     –     The majority of those earning an above-average revenue perhead are charging more than the median for individual tasks. Meanwhile, those charging well below the median earn far less.

The fact that the companies that charge slightly more can still fill their calendars suggests that a significant portion of gas engineers under-price their services.

    2.     –      Running an organised company that does the basics well helps to provide real value to customers and sets you up to charge a premium.

 

Gas Engineer Software is an all-in-one software platform for heating and plumbing companies. Its easy-to-use job management software helps more than 5,000 heating and plumbing companies schedule jobs, build quotes, send invoices, issue certificates and get paid faster. www.gasengineersoftware.co.uk

Next steps:

If you’ve been thinking about implementing software into your workflow to save time, here’s what you can do next: