Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
12 Aug 2025 · 3 min
0:00
In this episode of the Double Your Profit series, the host explains how businesses can leverage scarcity and dynamic pricing to raise prices without losing customers. He argues that many businesses underprice and that matching or exceeding competitor rates is a quick way to increase profit. The core strategy is to adjust prices based on daily capacity: when fully booked, eliminate discounts, keep trip and diagnostic fees, and even add premiums for faster service; when underbooked, offer discounts to fill gaps. He shares his own practice of dropping discount offers during a hot streak of high demand, maintaining full service fees, and only providing discounts when the schedule is empty. The episode emphasizes using limited crew availability as a lever to set prices, encouraging listeners to comment on their recent price changes and to continue raising prices strategically.
Chapters
Welcome back to the Double Your Profit series. Today we're talking about using scarcity to raise prices. Raising prices is one of the most powerful things that you can do to drive your business forward. Probably 50% of businesses are underpricing. I know I totally made that statistic up, and it's probably even higher than that. If you call around to some of the competitors that you're dealing with, you are very likely pricing under market. If this guy over here is getting 30% more than you, that's not because he's ripping people off. It's because he's charging 30% more than you, and you should probably probably just match his pricing. He's getting it from somewhere. You should just rise up and meet it. That is the fastest way to increase your profits. Literally just raise your price. I only have so much capacity every single day to take on new jobs, and pricing can be dynamic up and it can be dynamic down in order to maximize the day. Now, plenty of businesses use discounts to sell, but you can also use price raises to do the opposite. If you're overloaded with calls, should you be waiving your trip charge because a customer gives you pushback. No, there's absolutely no reason to. You should be charging for every diagnostic charge you go on because you're booked out for 2 weeks. There is zero benefit to you losing that $90 per trip if you're completely empty. Let's talk about dropping that chip charge today. So raising your pricing and making your pricing dynamic is a powerful profit-gaining tool that you can use every single day to maximize each day. Now, very specifically for us, the way that we tactically use this is Our discounts go away, and sometimes we charge slight increases when we are at very limited capacity. Right now is a great example. When I'm filming this, we are in our first hot streak, and it is super hot out. It is really uncomfortable, and we are drowning in no AC calls, which is awesome. But typically, we're offering discounts on dispatch fees to continue to drive booked calls into our call center. We're happy to do it. We like the dynamic aspect that we get, but now we're driving Full service fees on every single one. Now, if we sell a system, we're not giving any discounts. Why would we? We are booked out for three days. That's a very full schedule. So if we're giving discounts, but we're not doing it for four days, I'm basically giving away money for zero sense of urgency. That doesn't make any sense. If I'm giving away a discount, I want it to happen on my time for my reason. If I'm empty tomorrow, I'll give a discount to fill it. But if I'm full for three days, maybe you even charge a premium if they want it sooner. You only have so many crews, and you only have so much capacity. So you have to make pricing. Dynamics so that you can maximize every day, whether it's up or down. So that's how you use scarcity to raise your prices. Comment below the last time you raised your prices, and you should just go do it again now.
