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How Home Service Providers Can Compete On Value Rather Than Price

Matt is the Founder of Lead Generation Experts, which creates hand-crafted digital marketing campaigns for building material companies.

You might be tempted to lower your prices to try to generate more business.

However, my agency has seen how this can be a bad strategy for home service providers. Here’s why you should compete on value instead.

The Dangers Of Competing On Price

There are a number of reasons you should avoid competing on price. Trying to outprice your competition will likely:

• Attract bargain shoppers and hagglers. Being known as the cheapest home service provider in your area will attract bargain shoppers and hagglers. These types of consumers usually only care about getting the cheapest possible deal and might not be your ideal customer.

• Make it difficult (or even impossible) to raise prices later on. At some point, it will become necessary for you to raise your prices for one reason or another. If you’ve lowered your pricing in an effort to make affordability your selling point, it’s going to be very difficult for you to raise your prices in the future.

• Drive profit margins down for everyone. Competing on price is a race straight to the bottom. Once you lower your prices, the competition will do the same. This will keep going on until you reach the point of having the lowest possible price while still making a profit.

Why You Should Compete On Value

Every home project is different, and it can be hard to determine precisely how long it’s going to take you to complete any particular project.

If you quote by project and aim to have the lowest possible price among your competition (as a lot of home service professionals do), you’ll often end up having to rush the project to make a profit. Trying to rush the entire process will almost inevitably result in you or your team making a few mistakes along the way.

Do you want to be known as a sloppy contractor? Probably not.

Having a reputation as someone who completes a project perfectly every time will help your business a lot more than being known as the cheapest service provider around.

This is why you should compete on value rather than price. Instead of trying to offer the cheapest solution, you can charge a price that enables you to do the job at a comfortable pace while avoiding making mistakes.

How To Compete On Value

Now that I’ve explained why competing on value is a lot better than competing on price, I’m going to show you what you need to do to start competing on value.

1. Identify your ideal customer.

Not everyone will be interested in the type of home services you provide, so it would be pointless to attempt to appeal to everyone.

You should focus on attracting your ideal customer, the type of person who would truly appreciate the level of service you provide. To be able to compete on value, you need to understand what your ideal customer cares about and what they value most.

What kind of customers are you trying to attract? What problems are they facing, and what kind of home services would they prefer?

Do you want to focus on commercial or residential services? If you’re focusing on commercial projects, is there an industry or type of business that would particularly benefit from the type of service you provide?

A great way to answer these questions is to look at some of your past customers. Which types of customers were the most satisfied with your service? Consider contacting these customers to ask what they liked about your service. 

This will give you an idea of the biggest benefits that your service provides to your target audience and help you develop a better understanding of what your ideal customer is looking for in a service contractor.

You’ll be able to use this information to attract your ideal customers and generate more business.

2. Research your competition.

The next step involves researching your competition to understand the types of services they offer. Is there something they’re doing that you’re not? Or are you doing something they aren’t?

Think about what kind of additional value you could provide to your customers to differentiate yourself from the competition.

Check out your competitors’ social media and Yelp pages, and see what their customers are saying about them. Are they praising certain aspects of your competitors’ service? Do you notice any recurring complaints?

Look them over and consider if you can implement any positive aspects of the services that your competition provides. Similarly, see if there’s a way to address the complaints that your competitors’ customers have or position your service as one that provides more value compared to the competition.

3. Focus on the benefits of your service.

Most of your potential customers don’t care about the types of materials or tools you use. They care about the benefits of your service.

You might think that most customers would be able to deduce the benefits of doing business with you just by hearing about the type of projects you’ve completed. However, you need to remember that most of your potential customers aren’t experts or contractors. You need to spell out all the benefits of your service for them.

When talking to potential customers, make sure to accentuate the biggest benefits of your service and provide examples of how your past customers benefited from using your services.

Start Competing On Value

Competing on price is dangerous for a number of reasons: It attracts bargain shoppers and hagglers, makes it difficult for you to raise prices in the future and drives profit margins down for everyone.

Competing on value is a better strategy for your business and your reputation. It helps you to differentiate yourself from the competition, enables you to do good work every time and allows you to pay your employees well.

You will need to focus on portraying the benefits of your service rather than its features. This will help potential customers have a clear understanding of the value of your service.


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