EP #55 – How Cheap Pricing Is Ruining the Gas Industry w/ Dean Jones
📑 Table of Contents
TOC
📑 Table of Contents
Overview
Solicitors and dentists don’t discount their rates to win customers. So why are gas engineers constantly undercutting each other?
Dean Jones has built his business by refusing to race to the bottom, and in this episode he explains why lowering your prices doesn’t solve the problem, what it does to your reputation long-term, and how engineers end up busy but broke without ever realising why.
Highlights
Pricing influences what customers you want to work for
- (1:38) – Dean’s approach: price to do the best job, not the cheapest. There’s always someone who’ll do it cheaper, and that’s a race to the bottom.
- (2:18) – He’d rather have customers who want a good job done rather than cheapest.
- (3:42) – Why he tries not to focus on what others charge: different overheads, staff, and VAT registration mean cheaper isn’t always a bad job.
- (4:20) – Price for your standard of work, and don’t lower your prices. If you can discount, it probably means you were overcharging.
- Known as being “the cheapest” traps you as a busy fool.
How to actually price a job
- (6:10) – You need to know your costs for proper pricing. Each business has different overheads.
- (6:56) – His method: add up every cost the business incurs over a year (insurance, fuel, vans, tools, wages, training, pensions), divide by days worked, then add profit.
- (7:54) – Marking up materials is essential, not greedy — it covers sourcing, trade discounts, and going back when something’s faulty.
Justifying & raising prices
- (8:40) – Reviews justify your prices, and reflect whether you’ve priced right.
- (11:00) – What customers are really paying for: answering the phone, turning up when you say, warranties, protecting the house, and cleaning up afte
- (12:06) – Get your prices right, change them once a year or less, and don’t be worried. Happy customers understand.
- (16:47) – Why Jones the Gas doesn’t do discounts. Quote for the best price possible and protect your integrity.
Why the industry is racing to the bottom
- (18:06) – Corners being cut on cheaper jobs.
- (20:33) – Why gas engineers should charge like solicitors and dentists do, instead of undercutting each other.
- (23:06) – The £27-a-service contract example, and why the only way to make it pay is doing ten jobs a day and cutting corners.
How to know if you’re charging enough
- (24:38) – The simplest test: is there money left in the bank at the end of the month once the bills are paid?
- (25:09) – Using the Gas Engineer Software homepage income view to track earnings month to month and spot your seasonality.