Originally Posted By: jmichalski
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Daniel,
I have taken several business classes. I will not try to convince you that there are price shoppers in the service industry, nor that a discount pricing strategy as part of a comprehensive marketing strategy can be effective.
To say that service companies should "never compete on price" is to ignore an important potential marketing strategy, in my opinion.
Internet service providers compete on price. Telecoms compete on price. When service companies should not compete on price is where there is a corporate giant who can use discount pricing to crush the competeition by sustaining losses over a period of time until most or all of the smaller competition is eradicated. I do not find that this case parallells our industry.
I also compete on quality of service - that's how I maintain relationships with the Realtors who consistently refer me. They like the quality of service and report I provide.
It's also how I get referrals from previous clients. They are thrilled with the inspection they got and - thanks to rewards marketing - are eager to refer their friends.
Price does not equal quality, and I find that this misnomer is no longer as prevelant in consumer's attitudes. For those who are status shoppers, there are higher priced inspectors who will benefit from their pricing strategy as the most expensive. As I indicated before, I want to be busy and I am seeking constant volume, as that enhances the power of my other components of my marketing strategy. My pricing is helping me towards that objective.
Of course, there is no way to know how many more or fewer inspections I would have at your prices, but I would suspect that it would be less (since you have the benefit of longevity, and I am seeking a market share as a relative newcomer.) I have set my prices to cover my costs and turn a profit at the number of inspections I project to reasonably perfrom each month. As long as my prices meet these financial needs, they are appropriate. That is not to say they will not ever go up, but such increases will reflect carefully considered market impact and financial needs.
As for the other "Sherlock Homes" - there are several. All I can do is register my ficticious name and incorporate with the state. I registered legally as a corporation with the state and would not have been able to do so if anyone else held the rights to the same entity name I am using. I am sure there is some technical difference (an "Inc" or "Inspections" vs. "Inspection Service" or something like that.)
As I have had no Realtor tell me about that one, I can only assume we are travelling in very different circles. The one I most commonly get confused with is in NE PA, and even that is a rare occurrence.